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NEWS 7 maltatoday | WEDNESDAY • 25 JANUARY 2023 Construction watchdog looking to change energy performance certificate operations Planning Minister Stefan Zrinzo Azzopardi says the Building and Construction Authority is working on changes to the way energy performance certificates (EPCs) operate NICOLE MEILAK EFFORTS are underway at the Building and Construction Au- thority (BCA) to change the way energy performance certificates (EPCs) operate, Planning Minis- ter Stefan Zrinzo Azzopardi said on Tuesday. Speaking at a BOV Business Breakfast, the minister said that the BCA is working to make changes to the way the certifi- cate operates. Details on the ex- act changes weren't given. "This will surely be of assis- tance in the changes banks will have to undertake and will help in the discussion in how we change and up the game in the construction sector." EPCs serve as a rating of a building's energy efficiency. This certification is obligatory for all new builds, rentals and transfers, and has been around since 2012. Certificates are produced af- ter a professional assessment by a warranted architect or en- gineer. Even banks are bound not to issue sanction letters for property loans unless an EPC is presented. Tuesday's Business Breakfast focused on the climate chal- lenges and opportunities faced by Malta's real estate sector. Zrinzo Azzopardi, who was one of the keynote speakers at the event, emphasised the need to upgrade the energy efficien- cy levels of buildings. "The time to act is now," he said, admitting that this will be a significant change for govern- ment, the business community and the country as a whole. He added that this change requires a collective effort by all stakeholders in real estate, particularly builders and de- velopers. "Unfortunately, the Maltese consumer is hardly aware of the conditions they should be asking for," he said. "When purchasing something of mi- nor investment, like a washing machine, the consumer might question the energy efficiency of that particular appliance, but the same questions aren't made in the sale of property." He continued that while some developers are going the extra mile to make their properties more energy efficient, this atti- tude is not the general rule. "Quality has to be the name of the game in the real estate market. It's high time investors consider trends in the sale of property and other investment opportunities." The minister noted that banks finance the absolute ma- jority of property purchases. "It's pertinent that banks ex- plain clearly to the public their obligations in the financing of property so investors and property purchasers address the necessity of the changes." He added that banks need to present a way forward on how they plan to adhere to envi- ronmental regulations when financing property purchas- es vis-à-vis energy efficiency. EPCs will gain more impor- tance in this respect, he said. "We can't look at this matter as if it's the financing of just another business transaction. Property is a 'sui generis' sector with 'sui generis' objectives." The importance of EPCs was reiterated by Michael Stivala, President of the Malta Devel- opers Association. He noted that the EPC regulations were introduced in 2006, but there were no available assessors for several years. He recalled that when ener- gy bills skyrocketed because of the 2008 financial crisis, the relevant stakeholders reacted and some residential buildings were being built to an ener- gy-efficient standard. However, Stivala said that these developers lost money in the process because consumers did not understand the ben- efits of having an energy effi- cient unit. "Those developers were com- peting for the same consumer, and the consumer didn't know the difference," he said. It was only around 2012 or 2013, according to Stivala, that the EPC process came back to life and authorities started to ask for the certificate to cover previous years. Chris Meilak, a partner with Ernst & Young, explained that demand changes slowly and responds to various factors. "At the moment, demand for greener and efficient buildings isn't there." He argued that the end-con- sumer is not willing to pay ex- tra for energy efficiency, and that the revolution. In this area will start from larger compa- nies as they start to be subject to strict disclosure require- ments. "Certain brackets are not ap- preciating or willing to pay ex- tra for this. On the other side, there's already demand for cer- tain requirements that fit into what we heard today." Financial consultant Steve Ellul, who was recently ap- pointed CEO of Project Green, reiterated that the real estate industry is demand-driven, but this demand should be stimu- lated from the residential per- spective. He said construction com- panies need to be incentivised to invest harder in green con- struction, pointing out that 60% of existing investments on the local stock exchange is invested in the construction industry. "I believe the money is there. In my opinion, we need the fi- nancial plumbing to redirect the money to green construc- tion." BOV CEO Kenneth Farru- gia pointed out that there are more enablers beyond devel- opers and contractors that have an important role to play. These include engineers, archi- tects and national government. He said the biggest challenge will be to reconcile the short- term costs of the green tran- sition with the medium-term value creation. Ronald Mizzi, the permanent secretary within the Ministry for the Economy, pointed out that government is offering a list of schemes and initiatives to help in this. More so, ESG principles are being embedded into government's work pro- gramme, with many electoral pledges and budget measures intrincally linked to ESG. Planning Minister Stefan Zrinzo Azzopardi