Brussels, 9 April 2024
Thank you very much, ladies and gentlemen. Fantastic to have you here all around the table.
I see a number of familiar faces and I had the opportunity to at least briefly connect with most of the others. I wanted to thank you very much for being here and having the opportunity to have this dialogue with all of us.
Welcome and thank you very much for being here with us.
I’m also truly delighted not only to have this conversation but to have it as part of the Clean Transition Dialogue, today on construction. This initiative was launched by our president, by President Ursula von der Leyen, in 2023 and it is meant to support the decarbonisation of our industry.
And I feel today is an opportunity to exchange views and to hear your thoughts. Please feel completely at liberty to be critical, to mention what is on your mind, but what I continue to say whenever I meet friends from businesses: please don’t treat this as a one-off.
I do feel there is more that we need to do, both from the political side, but also from the business side to make sure we connect, we reconnect, and we have this dialogue in Europe. And knowing the world of business relatively well myself, there is more that we can do together to basically facilitate this.
The door of the Commission and also mine is always open.
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The next thing I would like to say is a bit preaching to the choir, but it is important to acknowledge is that construction is an economic powerhouse. It employs, directly and indirectly 25 million people and it contributes to 10% of the EU’s gross domestic product and that already is a very important reason to strengthen our dialogue.
If you then further go into the numbers, you will see that the built environment is omnipresent in the lives of all of us because we spend, and I found that an intimidating number, 90% of our time in buildings.
I would tend to think it is a good thing, but you might want to wish some people to be outside slightly more often than the remaining 10%.
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The industry has an enormous potential for contributing to Europe’s green transition towards net zero in 2050. And as I’m sure you are aware, that is something we diligently work towards.
Having said that, currently, there is a substantial gap that we need to bridge between our 2030 climate targets and our objective to reach climate neutrality, which is only 20 years later.
The construction sector is absolutely critical and a key partner in this transition.
We are very grateful for the efforts that have been made and for the shared goals that we have.
Because we see climate action not only as necessary, but also as an opportunity, as an investment that will create a ripple effect for business opportunities.
New partnerships, standards, certifications, and talent will help create a strong business case for what we feel should be a resilient, adaptive, and effective construction sector.
Our aim is and should continue to be to help you in achieving this.
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For that, it is also fair to acknowledge that the industry is not entirely, and that is an understatement, without environmental challenges.
The sector represents the biggest source of Europe’s waste. It is also very resource intensive.
And if current practices continue as usual, the renovation of buildings alone will have consumed almost 1.000 million tons of virgin materials from now until 2050.
Buildings are responsible for roughly 40% of Europe’s energy consumption.
And therefore, we are not yet on track to meet the 55% emission reduction target by 2030.
In order to get there, we should reduce buildings’ greenhouse gas emissions in the EU by 60%.
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There is work to do, and I’m sure we are all on the same page there. That is why we also have the Fit for 55 package. Because in our view, it helps define a clear path for reducing emissions of buildings during their life cycle.
The revised ETS Directive is a key element in this framework.
Together with CBAM, the Carbon Border Adjustment Mechanism, it will lead to a strong reduction of emissions for key construction products, such as steel and cement.
With the extension to new sectors, around 75% of EU emissions in 2027 will be subject to carbon pricing. This makes ETS in general a truly crucial element to achieve our 2030 target.
New buildings will also have to be much more energy efficient and halt their dependency on fossil fuels.
Currently, two-thirds of the energy used for heating and cooling of buildings still comes from fossil fuels. So, we do have a challenge there.
Therefore, and again that is then from 2030 onwards, renewable sources will have to be fully integrated into new building’s energy requirements as we stipulated under the Zero-emission Buildings Directive.
A lot is going on, but having said that, these initiatives will not be enough to reach net zero.
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We will also have to focus on construction strategies for carbon removal.
Promoting the use of sustainably sourced bio-based materials and employing advanced construction techniques is therefore crucial. It will help us create energy-efficient buildings that serve as carbon sinks throughout their lifecycle.
And throughout the EU Carbon Removal Certification Framework, building owners will also be able provide reliable and transparent evidence of their buildings’ carbon storage capacity.
That is absolutely key; that we make sure that they are part of the alliance as well and that the data are reliable. Because that is one of the key challenges for going forward.
This initiative holds the promise of promoting the adoption of climate-friendly materials, of circularity in construction practices.
And in our view, it should also provide economic opportunities. To society at large, but certainly also to your companies for monetising carbon storage in buildings through private and public support.
The New European Bauhaus offers an opportunity to empower the construction sector.
It encourages the application of advanced building techniques.
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And yet at the same time I think it is fair to be realistic: we must not only make buildings climate neutral, there is also this huge endeavour that we have embarked on and that is making stuff more climate resilient.
In Europe, the reality simply is such that extreme weather circumstances have already increased, the impact is accelerated, and it will get worse before it gets better. We will see more adverse effects in the years going forward.
2023 has been the hottest year on record, but it will not stop at that. Next to the task of making sure we do more in terms of mitigation, we need to do a lot more in terms of adaptation.
Many of you will have seen the European Climate Risk Assessment which was published recently by the European Environment Agency. That provides the latest analysis. And frankly speaking if you go through the numbers, if you go through the probabilities, it is intimidating material.
We simply will see more catastrophes going forward and we need to make sure we get our people out of harm’s way. And there as well the construction sector has in our view a pivotal role to play.
Just to make it even worse, let me give you one more number. A conservative estimate is that the worsening climate impacts could reduce the GDP of Europe by the end of this century by 7%. That sounds small. As a former finance minister, I know it is absolutely huge. Just to give you an idea: the COVID impact of the average European country in 2020 was roughly that number. It is absolutely huge what we would then lack in terms of resources, so more needs to be done.
Adaptation to climate change for the built environment therefore requires what we feel should truly be a systemic approach.
And therefore, the Commission in 2021 already published guidelines on climate-proofing infrastructures.
And in 2023, we published guidance with best practice examples on how to adapt buildings to future climate conditions and step-by-step explanations.
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Talking about future steps, we still need to do more to integrate the future climate into all standards that guide the planning, that guide the design and that guide the materials used in infrastructures and buildings.
Because after all, the building environment ensures that our society basically functions.
It also provides us with the space where we live.
And this is where I feel adaptation and resilience policies actually join forces with the New European Bauhaus.
We both want to ensure that we can thrive in a safe home, and that we do so in harmony with the environment.
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So, we are almost at the moment we have been waiting for. The moment where we start the discussions on the topics of decarbonisation, of circularity. Handing over to the keynote speakers. Of course, also discussing competitiveness, access to EU and national funding.
I’m very eager to listen to the speakers we have, leading us and guiding us through the conversation, but also to each and everyone around the table. So please speak up and make this an interactive dialogue. Once again, thank you very much for being here with us.
Source – EU Commission