Energy policies and regulations in the built environment; a policy perspective

The international policy landscape for building energy, sustainability and climate change has come a long way. The onset of the Industrial Revolution saw a transformation in how mankind related to and viewed energy sources. This era was a key determining factor in the energy landscape. Fast forward to the energy crisis of the 1970s, and an alteration to the energy policy realm began to be seen. Thirty decades after the crisis, the building energy policy landscape is still visibly fragmented by socio-political-institutional-technical realities. Intertwined in all this is the concept of sustainability. The United Nations (UN), through the Sustainable Development Goals (SDGs), calls for the integration of “measures to prevent climate change within development frameworks” and “more sustainable practices in using the earth’s natural resources” (United Nations, 2023). Thus, the UN outlines a clear pathway that advocates for measures to prevent climate change outside sectorial confines. Using this backdrop as part of the construct, this paper delves deeper into the issue of energy policies and regulations within the built environment.

Although policy timelines traditionally require at least 10 years for evaluation purposes, considering the fast-paced nature of the energy sector and market innovations, policies older than 5 years are outdated. Furthermore, the advent of the COVID pandemic in 2019 and the East European conflict, which closely followed, greatly shifted the dialogue within the building energy policy and regulations landscape. With several Global North nations facing vital changes to their energy supply lines, issues such as energy security and access have begun to be pushed forward as urgent national priorities. Therefore, 2018, the baseline year for this study was an important consideration that provided insights into how major externalities can and have affected BEP policies.

There have been arguments raised in the building energy performance (BEP) literature that opportunities for decisions that significantly impact building energy lifecycle performance are to be found at the design stage of a building (Zardol et al., 2019) or in the adoption of new technologies (Li, 2020; Wei et al., 2020). However, this paper argues that before any design process can begin, the most pivotal catalyst of BEP is the building energy policy landscape. Similarly, before new technologies can be introduced to the market, appropriate policies should be in place (Tinarwo et al., 2023). With this view in mind, this paper explores the literature to gain an understanding of the key recurrent topics within the BEP literature. Secondly, the study provides a synopsis of the policy landscape in the context of BEP over a six year period.

Four research questions (RQs) were adopted to guide the work in identifying trends and potential research gaps in the current debate on building energy policies and regulations. The RQs for this work are as follows:

This paper is divided into five sections outlined as follows. Section 2 covers the methodology; Section 3 presents the policy and research outlook; Section 4 is the discussion, and Section 5 covers conclusions and future work pathways.

A textual analysis of secondary sources spanning from 2018 to 2023 was conducted. The data analysed in this study were retrieved from the International Energy Agency (IEA) and the Scopus databases. The IEA database was selected because it is one of the leading energy policy databases, covering policy databases of countries worldwide and not just specific regions. The database is also continually being updated as new policies and/or policy plans are rolled out by different countries, making it a valuable and current source of energy policy information. The decision to make Scopus the main source of peer-reviewed literature was largely based on its reputation and extensive literature sources. Furthermore, it was postulated that through citation searching, other relevant literature sources that are not archived within Scopus would likely be picked up in the process.

A search strategy was adopted using some principles outlined in the PRISMA flowchart (Peters et al., 2020). The literature search consisted of three phases, namely, identification, which involved an initial search of the Scopus database to identify relevant keywords contained in the title, abstract and subject descriptors of relevant literature; screening, which involved categorisation and exclusion of ineligible records; and final literature compilation. Following the identification phase, BEP, sustainable policies and regulations, building energy efficiency, policy for buildings and energy efficiency and policy for energy performance of buildings were selected as the key search terms for this study.

The search of the Scopus database retrieved 20 journal articles, 10 conference papers, 6 review papers and 4 book sections, making a total of 40 documents. An additional 25 documents were retrieved through citation searches. A total of 384 policies from countries worldwide were retrieved from the IEA database. From this total, 17 policy typologies were generated using the key focal areas identified from the retrieved policies (this is presented in Section 3). Twenty of this total were excluded because they had ended by the time they had been retrieved from the IEA database for this work; refer to Figure 1. An additional 92 policies were excluded from the study because 39 were supply-side focused, 18 referred to mobility and/or fuelling alternatives and the remaining 35 focused on small domestic appliances (see Figure 1). Consequently, a total of 272 policies were considered in this study.

Applying the data extraction tool developed by Tinarwo et al. (2023), the data retrieved were categorised. Eligible literature were organised chronologically from 2018 to 2023, and contribution and context were also specified. The data were later incorporated into a table showing a taxonomy of the literature discussed in the next section.

There have been several policy packages that have been established in many countries in recent years. While some policy packages follow trends guided by national priorities, some policy focus areas are more popular than others. Fiscal policy is one of the more prominent focus areas. These range from policies that aim to encourage building retrofits to fiscal packages that focus on tax incentives attained through improvements in the energy efficiency of buildings. Out of the different BEP policy typologies, most BEP policy processes follow one of two pathways. These approaches are either mandatory or voluntary policy pathways, the scope of which varies across countries. Voluntary approaches vary between countries, although a common approach is via incentive-driven structures (Berry et al., 2022; Bertoldi et al., 2020). There is, however, no set delineation on how BEP policy incentives are structured, as these differ from country to country. In regions with regional bodies with legislative authority, such as the European Union (EU), high-level policy goals and directives are established at the regional level, after which member states transpose them into national laws.

To gain a better understanding of the research literature, the findings from the data extraction tool were further expanded, and a taxonomy of the literature, which included a section for study themes, was developed (see Table 1). From the analysed data, it was discovered that the predominant research study theme is policy for BEP, with a total of 22 articles focusing their work on policy. Six studies out of the 22 assess policy tools and/or the effectiveness of changes made to national BEP policies within specific countries (refer to Table 1). A common thread from the studies discussing national BEP policy was that changes to policies are not yet yielding positive results (Giacomin et al., 2019; Gokarakonda et al., 2019; von Platten et al., 2021). Within the policy thematic group, other studies evaluate the flexibility of national building codes, net-zero energy building (NZEB) regulatory tools and some focus on technical energy regulations (Berry et al., 2019; Giama et al., 2020; Sulzer et al., 2020). As a collective, BEP policy-themed studies are yet relatively few and quite spread out in focus. Therefore, there remains room for more work on building energy policy to be undertaken.

Evidence in the data shows that retrofitting and decarbonisation strategies are popular options for BEP, especially in the Global North countries. This trend is seen within the strategies thematic group in which most studies focus on retrofit strategies and decarbonisation strategies. The research focus on building retrofit strategies and decarbonisation in some way aligns with the promotion and development of retrofitting and renovation policies in many Global North nations. As will be seen in the next section (see Table 3), policies that are designed for building retrofits are the third highest category across the world. If public sector building policies are also included, the retrofit policy category shares a second-place ranking with fiscal policies that are not geared towards retrofits.

Policy data retrieved from the IEA database were analysed, and 17 policy typologies were generated, as shown in Tables 2 and 3, respectively. The analysed data revealed that performance contracting and Minimum Energy Performance Standards (MEPS) for buildings did not have any representation in the form of policies or strategies during the selected timeframe. In following this data thread, a general search for these two typologies was carried out, and evidence was found that energy performance contracting policies had been incorporated in countries such as Russia, the UK and China (Russia, 2009; UK, 2015; Yuan et al., 2016). However, these policies predate 2018, and there was no evidence found that they had been updated in the last six years. Concerning the MEPS of buildings, evidence was found through a desktop study that the UK currently has a bill that is yet to be passed (UK, 2022). The EU’s updated 2018 directive advocates for a gradual introduction of MEPS, which covers non-residential buildings as a support system for renovating low-performing buildings. Even so, only a few have transposed it into law since 2018 (Georgia, 2020; Italy, 2020b; Moldova, 2023; Ukraine, 2018), and the majority have included action plans and strategies for the same since 2018 (Poland, 2018; Portugal, 2018). The latter finding is not peculiar to the EU only, as the evidence gathered points to a strong correlation between building energy policy ambitions and future action plans, strategies and roadmaps worldwide.

The policy data retrieved from the IEA database indicates that over the last six years, 31% of policy initiatives worldwide have been action plans and strategies. Out of the 84 action plans, 52 were instituted from 2021 onwards. Further analysis of the policy objectives within these action plans reveals three main themes: a stronger push for renewables, recovery and resilience. In sharp contrast, before 2021, the themes for action plans ranged from advice programs and cooling action plans to programs designed for public buildings. The abrupt change within the action plan objectives can be argued to have been instigated by emerging threats to energy security and access, sparked by the Ukrainian war (IEA, 2022; UNCTAD, 2022). Notably, the shifting of objectives within the action plans for nations is a pattern that can only be seen across the Global North nations. In terms of the Global South nations, the bulk of whom have until now been struggling with energy security and access issues, the study did not uncover any change in the focus of their action plan policies. Thus, although action plans and strategies constitute the vast majority of policy initiatives in recent years, this is the result of reactionary responses to external threats rather than an increase in ambitions towards improved BEP (Austria, 2021; Spain, 2022; UK, 2021; USA, 2022a, 2022b, 2022c). It is no wonder that policy failure to address the GHG emissions, BEP and climate change issues has come under a lot of criticism in recent times (GABC, 2018; Pathak et al., 2022).

According to the data, fiscal instruments are the next highest-ranking policy focus for countries worldwide. Emerging patterns from the data show differences within fiscal policies; hence, they were split into two typologies, as can be seen in Table 3. Overall, the combined fiscal policies across the two typologies constitute 26.5% of the policy typologies, which is a mere 4.5% behind action plans and strategies. However, when analysed as standalone typologies, fiscal policies for building renovations and/or retrofits are 9.5% of the total. This figure is relatively low, especially from a global outlook, yet it is still 2.9% higher than MEPS for services. The second typology of fiscal policies covers other energy efficiency drives and constitutes 17% of the global total, creating a gap of 14% between the two highest-ranking typologies. Within this second fiscal typology, broader BEP issues are grouped, such as city and community-level policies (Australia, 2019; Brazil, 2018; USA, 2019), tax-related policies (Belgium, 2022; France, 2021; Italy, 2020a) and grants or incentives (Ireland, 2021; Netherlands, 2020; Switzerland, 2020). Notably, there was an obvious lack of fiscal policy representation in the Global South nations, except Brazil.

Taking a closer look at the “fiscal other” typology, the data shows that after 2020, there was a perceptible shift towards “social” funding for energy. Many countries set aside budgets to alleviate the effects of the price increases in energy goods and services, especially at the household level. Starting with the EU’s social climate fund and the European Local Energy Assistance instituted in 2021, many EU member states passed laws that were favourable for consumers’ energy bills (Belgium, 2022; EU, 2021a, 2021b; Luxembourg, 2022; Switzerland, 2022). This shift in fiscal trends can also be seen in the USA, Australia and Japan with the passing of the Inflation Reduction Act of 2022, supporting small and medium-sized businesses and investing in renewable sources to protect against “disasters” that could affect energy supply, respectively (Australia, 2022; Japan, 2021; USA, 2022a, 2022b, 2022c). Thus, between the two fiscal typologies, the 7.5% gap can be argued to have been influenced directly by world events, which shifted focus from direct BEP policy to the immediate crisis caused by the Ukrainian war, which came at the heels of the COVID pandemic. In this regard, the policy landscape reflects the socio-political trends that marked the beginning of the 2020 decade. How this will shape the future direction of BEP policy is at present debatable. Nonetheless, it is hardly a stretch of the imagination to say that an extension of activities promoting the push towards renewables is now even stronger. Countries such as Canada, Luxembourg, Poland, Japan and The Netherlands, to mention a few, have already started to pave the way for the new narrative and have created fiscal policies to back it up (Canada, 2021; Japan, 2021; Netherlands, 2022; Poland, 2022).

The fourth highest-ranking policy typology is the public buildings and government procurement group, representing 7.3% of the total. For European countries, a trend of recovery, resilience and renewable sources can be seen in policies from 2021 onwards. Unlike the trend seen in the action plans, however, there is no sudden increase in policy measures for public sector buildings after 2021. Even so, many of the policies for public sector buildings are found between 2020 and 2023, with only one in 2019 and three in 2018 worldwide. The public procurement typology generally consists of a mix of measures ranging from fiscal support (Denmark, 2021; Greece, 2020; Zealand, 2020) to programs and standards for public buildings (Brazil, 2021; Jamaica, 2018; Morocco, 2019).

Another emerging theme from the government procurement typology is a noticeable representation of Global South countries in contrast to the top three policy typologies. This seemingly irrelevant pattern points to embedded differences between the socio-institutional practices and priorities of the Global North and South. While the Global North may look to financial means to resolve the BEP and climate change concerns, the Global South may be looking inwards towards top-down structural changes to practices and previously accepted norms. Rather than pointing to weaknesses within systems in the Global South, this may also be considered a strength as it encompasses contextually viable pathways to achieving the same goals. BEP has long been embedded in the narrative of financial capacity, which has further polarised the Global North and the Global South. However, this should not be the guiding standard towards achieving sustainable policies and regulations. Societies worldwide should work within their capacities and environments to make positive changes towards improved BEP.

The fifth-ranking policy typology is the MEPS for building services. Within this typology, most building services addressed within policies are concerned with the heating and cooling of buildings. There is a conspicuous lack of coverage for other building services, such as hot water, elevators and escalators, in the policies evaluated. Moreover, there is an overwhelming representation of MEPS for building services in the Global North countries. There are few countries that are not classified as high-income countries which also focus on heating and cooling policies. Aside from the assumption that local geographical and climate classifications play a role in the formulation of this policy typology, there may not be any other reason. However, most of these “outliers”, such as Rwanda, Morocco, Indonesia and Nigeria, are classified as developing countries and this may also indicate a shift in policy direction for Global South countries.

Looking at the summary of the 17 policy typologies, research and development (R&D), building energy audits and certification schemes are among the lowest-represented policy instruments across the world. In the greater scheme of things, this is a missed opportunity. Generally, these instruments support real-time data collection, which can be used in research initiatives to identify problems and seek workable solutions that can be introduced to building regulations. With an ongoing criticism of policy failure to address climate change and GHG emissions, it can be postulated that focusing on instruments such as R&D, audits and certification schemes may be a relevant response to inform policy and regulations. One other low-ranking policy typology is the Environment–Built Environment. This typology is represented in Rwanda (2019) through a policy that focuses, amongst other key issues, on improving the well-being of the people and enhancing the country’s natural ecosystems in urban and rural settlements. Although countries such as Austria (2019) and Portugal (2020) have climate action and environmental fund policies, these policies only consider onsite “environmental” building concerns, which is why they are not considered in the environment–built environment group in the typology classification.

The evidence in the literature suggests that there is yet a long way to go before building energy policies catch up with the fast-paced modern-day energy landscape. The data further reveals that immediate geopolitical priorities largely drive national energy policies. Furthermore, external events influence the development and implementation of energy and/or climate policies, resulting in a multiplicity of outcomes that directly affect the progression of climate goals at the country level. In the case of this paper, the identified external events that shifted national focus were the COVID-19 pandemic and the East European war. The resulting pattern closely follows that of the 1970s decade in which external shocks in oil products caused a tangible shift in policy focus across countries worldwide.

Even with all the geopolitical considerations, the data collected shows a disproportionately high occurrence of action plans and strategies versus enacted regulations, standards and building audit mechanisms. Likewise, the evidence reveals that sustainability as part of the BEP policy consideration has a conspicuous lack of representation within policy packages. The few numbers of countries that have an added sustainability component for BEP policies often and consistently pursue it within the context of existing buildings and new structures. Moreover, sustainability is considered within separate components of building systems, which may or may not be part of an overall building management system. By separating building structures from their socio-environmental context, the efficacy of “sustainable” policy solutions is, in effect, reduced.

The four RQs informed the eligibility and search criteria adopted for this study. An analysis framework was created by linking the RQs to the key findings and challenges; thus, gaps in the literature were identified. In answering RQ1 “What policies and regulations have been used for building energy performance in different countries worldwide over the last six years?”, 272 eligible policies were retrieved from the IEA policy database and 65 research studies from the Scopus database. After an analysis of the data, three thematic categories from the literature were identified, and 17 policy typologies were created; refer to Tables 1 and 3, respectively. The next step was to answer RQ2 “What scope and concerns do these policies and regulations address?”. The key findings from RQ2 were that most policies target renewable energy installations in buildings, heating and cooling of buildings, net-zero building ambitions, long-term national ambitions and fiscal instruments (refer to Table 3). However, the literature data shows a strong leaning towards BEP policy assessment, renewable energy and social effects of policies, as seen in Table 1.

In answering RQ3 “What common challenges can be identified across policies and processes for the built environment worldwide?”, the common challenges within the built environment energy policy focus were identified. These challenges provide a holistic outlook on key areas of policy commonality across different countries. These challenges include the lack of tangible evidence of sustainable considerations in policies and regulations and the fragmentation of policy goals across the BEP ecosystem, among others, as presented in Table 4. In addressing RQ4 “How can the data be used for research and in the society?” four actionable statements were made based on the analysed data, which address concerns related to fragmentation of policy goals across the BEP landscape, institutional influence in energy policy formulation and little consideration of socio-economic-environmental impacts within BEP policy packages. A summary of the findings and their relationship to the RQs is provided in Table 4.

Although the period considered in this study may have resulted in the omission of policies and regulations from earlier dates, it also suggests that in the last five-six-year period there have not been many updates to such instruments where they exist. Considering the fast-paced nature of the energy landscape, is it reasonable for countries to forge ahead with outdated regulations and policies? How justifiable is it that the building energy policy and regulation formulation landscape is still operating on traditional models that only get updated after at least a decade has passed? The energy sector, which is currently driven by technological interventions, is fast-paced, and certainly, policy and regulation formulation need to adjust to this new reality.

When assessing the question of sustainable policies in the built environment, the policy data gathered from the IEA database reveals low uptake and/or updates to BEP policies across the world. Considering the evidence from the policy data, sustainable strategies are not clearly defined and could be anything from fiscal policies supporting renovations and minimum energy performance standards (MEPS) for building services and appliances to regulations for NZEB and EE in buildings. The policy focus revolves around building energy consumption reduction, energy-efficient building services and making greater use of renewable sources. However, there is a policy silence on the lifecycle environmental and social impacts of building services and renewable energy sources and technologies. The high dependence of the EE solutions on critical mineral commodities and the unsustainable mining practices associated with their extraction is not factored in at the building energy policy level. Only the end product is rated, labelled and weighed against minimum energy performance standards, and the “beforelife” and “afterlife” of these technological solutions are simply negated. It can be argued that before these “technical loopholes” are addressed, the built environment is currently not at the stage to lay claim to sustainable policies and regulations, as we are truly meeting the needs of the present with no apparent regard to the “fallout” for future generations.

Since 2018, a comparatively high number of fiscal policies have been developed to tackle the climate change concern. However, this has not changed the outlook of BEP and its relation to SDG 7 and SDG 11, as they are both off track (United Nations, 2023). This status quo presents an opportunity for reflection to bring about a more integrative approach to sustainable policy formulation, thus making the current decade and the halfway mark of the SDG timeline a unique phase for holistic and evidence-based redressing of the existing situation. Far from excluding the life cycle impact issues surrounding EE solutions, and by moving away from simply considering MEPS of finished products, it is prudent for us to consider the short- and long-term impacts holistically.

The study aimed to provide an overall perspective on BEP policies over a six year period. The key implication and contribution of the study is the provision of an important point of reference for research regarding the current nuances in BEP policy packages. This research embraces the opportunity to bring BEP policy into the foreground and highlights the need for the research community and policymakers to evaluate the current policy paradigm. Discourse in the BEP literature has previously pointed to a disconnect between policy, academia, the built environment and technology (Zou and Alam, 2020). While changes within the energy sector consistently evolve at an increasingly fast pace, corresponding changes to the BEP policy are not evident. Thus, the implications for practice can be summarised as there being a need for the implementation of integrative and holistic policy solutions. Implications for further research include a focus on developing adaptive policy models with inbuilt flexibility to allow integration with the ever-shifting trends in the energy sector.

The need for sustainable, energy-efficient built environments is a universal concern for all, as it directly relates to the issue of GHG emissions and climate change. This paper touches on some inconvenient realities in the general discussion. If policies and regulations are to avoid “greenwashing”, more integrative and holistic approaches to policy formulation must be adopted. There is an urgent need to move away from reactionary policy formulation regarding energy policies. To this end, only then can truly corresponding building energy policies and regulations be established. Improved collaboration between academia, the private sector and policymakers to encourage accountability for the life-cycle energy performance of buildings and their services within policy frameworks is a pragmatic step forward towards this end.

The primary limitation of this work is that the chosen timeframe limits the number of policies investigated. Nevertheless, a few pre-dated policies that were updated were found in the data, and these updates fall within the selected timeframe. In this way, relevant conclusions were drawn from the data. Contrary to the generally accepted notion that policy formulation is a slow process that necessitates long periods, the evidence in the data collected showed that this may not be strictly the case. In the period after 2020, there was an immediate reactionary policy response to threats to national energy security and access, which shifted policy focus. Thus, it can be concluded that policy processes can be shortened and still be sufficient. Applying a six-year timeline brought to the forefront the untenable, slow nature of BEP policy formulation across the world. This possibly points to the value placed on national priorities over BEP policy drives. In light of this, this paper recommends that future research be directed to the underlying factors affecting the advancement of sustainable building energy policies and regulations.