Obligations for Owners to Climate-Proof Buildings in France

3.1 Principles

To date, in France, no planning law, either general or specific, has made it possible to impose the installation or replacement of equipment for energy purposes on the owners of existing buildings. Such constraints are only valid for new buildings or renovations (i.e., they have no retroactive effect).^[93]

This applies to town planning rules, which have to be set by the legislator, whether the legal rule is imposed directly on builders, created by regulatory power, or issued by certain administrations that are empowered by law to issue rules adapted to local circumstances. For instance, municipal authorities can issue urban plans that will generate administrative easements because the law empowers them to do so, for instance, through a ‘Plan Local d’Urbanisme’ (PLU),^[94] which sets out the rules for communal urban planning. Therefore, as a matter of principle, urban planning documents can only restrict the right of property to the extent that the Planning Code (Code de l’urbanisme) allows. The public body would be acting ultra vires if there were no legal basis for the restrictions they wish to impose on ownership. For example, they cannot require systematic counselling by an architect, or demand that people contract with a specific real estate professional for a given project, nor can they require prior public consultations not provided for by law, or ask for additional studies or documents.^[95] The PLU cannot directly regulate economic activity, 62either.^[96] It cannot, for example, require a sunlight study without legal empowerment.^[97]

As a result, town planning cannot compel owners to actively do something, nor can it create rules that immediately impact existing constructions. The purpose of town planning is to impose rules on future construction or development projects. It is concerned only with the aesthetic or architectural features of buildings, which may influence the installation of future equipment outside the building, in the event of renovations, but it cannot require that specific materials or brands of equipment be used, nor regulate the interior of buildings. In other words, urban planning can require the positioning of the roofs of future buildings facing the sun, but it cannot require the owner of an existing building to install solar panels.

3.2 Renovation of Buildings

When owners – out of their own free will – decide to install equipment intended to produce renewable energy, they must proceed with the installation or the necessary work in compliance with town planning rules, be they national or local. Thus, for example, the installation of a heat pump that would result in a change to the external appearance of the building must be notified to the local council beforehand. If the project requires the extension of the existing building, or the construction of a new building, depending on the importance of the work or the power produced, a building permit or a declaration prior to the work will be required.^[98]

It should be noted that the French Planning Code favours the installation of renewable energy equipment^[99] and provides for a lighter formalism than for other construction or installation projects.^[100] The PLU can also grant bonuses to construc63tion works on buildings that demonstrate energy exemplarity.^[101] Additionally, PLU regulations can define sectors in which they require any construction, work, installation or development to comply with reinforced energy and environmental performance standards that they define. In this respect, the PLU can impose a minimum production of renewable energy, where appropriate, depending on the characteristics of the project and the energy consumption of the sites concerned.^[102]

3.3 Concluding Remarks on Planning Law

It can therefore be concluded that there is no way, under French Planning Law, to compel owners to renovate their building, for instance by replacing an old heating system burning fossil fuels. However, if the owner decides to perform such renovations because of the incentives created by law, he will have to comply with the technical specifications set out in the aid scheme, which are not planning law requirements but conditions for receiving said financial aid (for instance, to buy equipment that complies with high environmental or energy standards). Installing a new boiler may therefore be required by a specific incentive.

Renovation also requires compliance with the Planning Code. Depending on the extent of the work, a building permit or a prior declaration may be required, depending on whether the external appearance of the building is to be modified or the surface area extended. Internal alterations are normally not subject to authorization, except in the case of a building located in an outstanding heritage site.

The city planning administration will either approve or refuse the project only with reference to the administrative servitudes^[103] provided for by the Planning Code. Nevertheless, if the PLU regulations have defined sectors in which they require projected constructions, works, installations and developments to comply with en64hanced energy and environmental performance standards (and impose a minimum production of renewable energy). In the event of non-compliance, the owner’s project may be refused, if it requires planning permission, before any work begins. However, in any case, the PLU only sets out general substantive rules. It will not impose the installation of, for instance, a boiler rather than a heat pump, nor will it impose a particular commercial brand.

We add that a law from March 2023 makes territorial planning of renewable energies a priority.^[104] Local bodies (municipalities) can now create ‘acceleration zones’^[105] where they would like to see renewable energy projects set up as a matter of priority. These zones can encompass all types of renewable energy, such as photovoltaic, solar, thermal, wind, biogas, and geothermal energy. ‘Acceleration zones’ are not exclusive zones for setting up renewable energy projects, but the Government will be introducing financial incentives for project developers setting up in these areas.

This Law supports the creation of ‘agrivoltaic installations’ as well. This is an electricity production installation that uses the sun’s radiative energy, the modules of which are located on an agricultural plot. It must make a lasting contribution to the installation, maintenance or development of agricultural production.^[106]

4.1 Obligations on Buildings or Car Parks for Renewable Energy Production Process

Regarding obligations that are imposed with respect to the construction of new buildings or the renovation of old ones, for instance, Article L. 171–4 of the Construction and Housing Code (Code de la construction et de l’habitation) states that, in compliance with the general objectives for the energy and environmental performance of buildings, some buildings or parts of buildings must incorporate either:

1. a renewable energy production process; or

2. a greening system based on a method of cultivation that uses drinking water only to supplement recovered water, guarantees a high degree of thermal efficiency and insulation, and promotes the preservation and recovery of biodiversity; or

3. any other system that achieves the same result.

66These obligations apply:

1. to extensions and major renovations to buildings or parts of buildings, where these extensions or renovations have a footprint of more than 500 square metres;

2. to any associated parking areas on which major renovations are carried out; or

3. when a new public service concession, service provision or commercial lease contract is concluded or renewed.^[110]

Compliant structures are installed on the roofs of buildings or over-shaded areas (‘ombrières’) hanging over parking lots, on a minimum surface area at least equal to a proportion of the roof of the building that has been built or extensively renovated and of the shaded areas created, defined by order of the ministers responsible for construction and energy. This proportion is at least 30 % from 1 July 2023, then 40 % from 1 July 2026, and finally 50 % from 1 July 2027. In addition, other measures require the installation of shading systems on at least half the surface area of existing car parks of more than 1,500 square metres. This obligation will apply to existing car parks from July 2023 and to those for which planning permission applications have been submitted since the promulgation of this law. However, some derogations are also provided for.^[111]

Finally, it should be noted that, since 2010, it is required that any planning action or operation (‘opération’ or ‘action d’aménagement’) subject to an environmental assessment must undergo a feasibility study of the area’s renewable energy development potential, specifically on the appropriateness of creating or connecting to a heating or cooling network using renewable and recovered energy.^[112]

4.2 67District Heating Networks

As a result of the French interpretation of the constitutional protection of the right of property (see § 2), a public body can generally not compel any private individual or enterprise to connect their house or their shop’s building to a new district heating network using renewable energies. It cannot be expected from them to bear the connection costs either. Furthermore, even if a landlord wanted to revamp their house located in the development area of a (new) district heating system, a public body could not subject its renovation approval to a connection to a district heating network. That said, it can organize financial incentives to do so.

Under French law, however, the development and use of district heating systems are quite well promoted by a specific legal framework. After the second oil shock, the French legislative body adopted a first law promoting heating district system utilization.^[113] The promotion of heating district systems was all the more important because using heat that is locally produced increases national energy independence. This first statute introduced a procedure of ‘classification’ (‘classement’) of heating district networks.^[114] It authorizes a local public body to require private individuals and businesses to connect to the heating district system if they are located in the development area of a classified heating network.^[115] Since 1980, classification decisions have been made by the executive. At first, it required a decree of the Prime Minister upon consultative advice by the Council of State (Conseil d’État).^[116] Then, from 1996, it required a decision of the government’s representative in each administrative subdivision (préfet de département).^[117] Under this system, however, only one district heating system was classified (Municipality of Fresnes, in 2006).

In the context of the energy transition, the classification procedure has been revised twice. The Grenelle II Law (2010) transferred the classification procedure to French local authorities (collectivités territoriales and établissements publics de coopération intercommunale). It then clearly promoted the use of heating district systems in order to achieve the national renewable energy development goal (23 % of 68national final energy consumption by 2020).^[118] Article 85 subjected the classification of a heating district system to three conditions: 50 % of distributed heat has to come from renewable sources, the heating network has to include a counting system, and the project has to be financially balanced.^[119] To accelerate the development and use of heating (and cooling) district networks, the Energy and Climate Law adopted in 2019^[120] required all local authorities to classify the heating networks built before 2009 on their territory.^[121] This obligation entered into force on 1 January 2022.

The Grenelle II Law (2010) also clarified the obligation to connect a building to a heating system, resulting from its classification by a local authority. According to Art. L. 712-3 of the French Energy Code (Code de l’énergie), all new or old buildings ‘subject to subsequent renovation works’ and located on the area of a classified heating network must be connected by their owner. A building is considered to be subject to ‘subsequent renovation works’ when it uses collective heating or cooling systems, the capacity of which is superior to 30 kilowatts.^[122] Owners of such buildings can request a derogation from this obligation from the local authority, which can issue said derogation under four cumulative regulatory conditions: 1) the installation already uses a renewable energy technology for 50 % of its heating needs; 2) the heating or cooling needs cannot be technically fulfilled by the heating district system; 3) the building cannot be supplied within a timeframe corresponding to the needs of its owner or tenant; 4) the connection cannot be achieved under the economic and tariff conditions first announced by the operator. Compliance with this legal obligation is enforced by local authorities, administrative bodies, and the police, with a fixed fine of EUR 300,000.^[123]

Very few district heating systems have been classified to date, partly because the legal obligation to do so is very recent, but also because the investment it represents is expensive as well. The legal obligation to connect to a classified heating network has not yet been clarified by specific case law. However, the generalization of the classification of French heating networks imposed by the legislator in 2019 will surely generate a new wave of litigation. Local authorities and heating network operators are currently preparing for their massive development. To prevent conflicts between inhabitants and local authorities, they strongly recommend promot69ing the attractiveness of this technology as well as maintaining citizens consultation procedures.^[124]

4.3 Global Energy Performance Standards for instead of on Tertiary Sector Buildings

Under French law, a positive obligation to renovate only exists for buildings belonging to the ‘tertiary sector’. This legal obligation was first created in 2010 by the already mentioned, very important environmental statute Grenelle II Law.^[125] It was reaffirmed in 2019^[126] and finally rendered applicable by a widely anticipated decree adopted on 23July 2019^[127] (hereafter referred to as the ‘Tertiary Decree’), which was subsequently codified.^[128] This decree only applies to buildings belonging to the ‘tertiary sector’, i.e., buildings that are not used for habitation, industrial or agricultural activities, but for conducting any other private or public services. This category includes public buildings, meaning that this legal obligation also concerns public-law persons (the State and other public bodies). In addition, as detailed in the Tertiary Decree, the obligation to renovate only applies to tertiary buildings whose surface exceeds 1,000 square metres.^[129]

The Tertiary Decree requires from the owner of the building and their tenants that they reduce their final energy consumption by 40 % before 2030, by 50 % before 2040, and by 60 % before 2050.^[130] Since September 2022, owners of tertiary buildings are subjected to an obligation to report the annual energy consumption linked to their buildings.^[131] This declaration is verified by agents of a dedicated public plat70form.^[132] Owners of tertiary buildings are also required to submit an action plan detailing how they plan to meet the energy performance objectives. Possible actions include improving the energy performance of buildings, installing devices that allow for a better management of energy consumption, defining new modalities for energy usage and adapting the building in such a way as to reduce its energy needs.^[133] The Tertiary Decree also anticipates the need to balance the obligations it creates with the nature of existing buildings (for instance, structural risks and listed buildings), pre-existing third-party rights or administrative easements, or the disproportionate costs of climate-proofing obligations in regard to the expected results.^[134] This balancing is operated through a modification of climate-proofing obligations, i.e., whenever possible, the requirements will be reduced instead of being waived entirely.^[135]

Failure to disclose the required information or inconsistencies with the action plan can lead to the publication of any summons that has not been complied with, the requirement to submit an action plan that will have to be approved by the departmental administrative authority, along with fairly minimal financial administrative sanctions (EUR 1,500 for a natural person, and EUR 7,500 for a legal person).^[136]

Overall, this unilaterally imposed obligation to climate-proof buildings has a rather limited scope, as it only applies to large tertiary buildings, such as offices, and this obligation is backed by financial sanctions that seem relatively non-dissuasive.

5.1 71General Incentives

Instead of creating a general legal obligation to climate-proof buildings, the French legislator defined a national energy performance objective, which addresses all kinds of housing buildings. Article 22 of the Energy and Climate law established that ‘from 1 January 2028, the energy consumption of residential buildings cannot exceed a limit of 330 kwh/m² a year’.^[137] This objective seems particularly ambitious as it applies to all residential buildings, including old ones. But the legislator also decided to exempt many buildings from its application. This obligation does not apply, for instance, to buildings that cannot be renovated to achieve energy consumption below this threshold because of their technical, architectural or heritage constraints, nor to buildings for which the cost of the work required to meet this obligation is clearly disproportionate to the value of the property.

In order to reach this general objective in the private housing sector, the French State first implemented several fiscal incentives and financial aid schemes. Contrary to the legal obligation to renovate tertiary buildings, the financial aid schemes concerning private households are not aimed directly at reaching a certain level of energy performance, but at encouraging improvement. They are based on individual or family income criteria. It is intended that, by financially supporting the renovation projects of households, this will lead to better energy performance. In 2015, the French government first put in place a tax credit system,^[138] before replacing it with direct financial aid in 2020, i.e., public funding provided ex-ante, before the works are performed.^[139] Within the framework of the national recovery plan, the income categories of households that can benefit from this financial aid have also been significantly extended.^[140] This aid is usually distributed by a specific national public body or by the regional administration.^[141] The Climate and Resilience Law confirmed that financial aid given to households to support them in their renovation projects is the preferred method to reach a general national energy performance objective, which is updated by the legislator for the buildings sector every five years.^[142]

5.2 72Insulation and Heating Systems incentives

There are no specific obligations to insulate buildings, install solar panels or heat pumps in France. However, the law indirectly encourages these measures by effectively putting at a disadvantage any building that does not meet the energy consumption objectives. In order to achieve this, the French State has therefore developed further tools to ensure that landlords renovate residential buildings in a more energy-efficient way.

The Climate and Resilience Law replaces the general energy performance threshold of 330 kWh/m² a year for residential buildings by a target energy performance standard of between A and E classes (with class E corresponding to the same minimum threshold). As a result, landlords should undertake all necessary renovation works needed to move from class F or G by 2028 (respectively, ‘not very efficient’ and ‘extremely inefficient’) to class E (at least), and then to class D by 2034 (this corresponds to an energy level of 250 kwh/m² a year).^[143]

Complying with those thresholds, however, does not constitute a legal obligation. The French legislator laid down an obligation for landlords to establish an energy performance diagnosis of their building, according to a classification from A to G (as determined by a ministerial ruling).^[144] Publicizing this information is mandatory for selling or renting the property. Failure to comply with these publicity obligations can be sanctioned with a EUR 3,000 fine for non-professional landlords, increased to EUR 15,000 for legal persons. The fine is imposed by the French national or departmental administration.^[145]

In addition, from January 2022, any owner who wants to sell or rent a building that is considered ‘indecent’ (i.e., not meeting the energetic efficiency threshold of 330 kWh/m² a year) will be required to expressly mention this lack of conformity with French energy performance requirements in all advertisements. From 2028, lack of conformity will also have to be mentioned explicitly in the sale or lease contract.^[146] Furthermore, starting in 2022, in order to sell a building that is classified between D and G, a specific audit will have to be performed by an independent third 73party. It will mention all suggested renovation works and their price.^[147] Last but not least, from 2023 onwards, it will be impossible to increase the rent of buildings that have an energy rating of F or G upon tacit renewal of the contract.^[148]

Without turning renovation into a strict legal obligation, the French legislator created strong incentives pushing landlords to undertake energy renovation works. Essentially, immovables that are not energy efficient will lose most of their market value and their profitability, as they can no longer be leased.

5.3 Specific Incentives

There are other indirect constraint mechanisms, such as the plan for the protection of the atmosphere (‘Plan de protection de l’atmosphère’, or PPA). It aims to preserve air quality in a given territory.^[149] This plan is adopted by the government’s representative in each administrative subdivision (préfet de département). Its implementation is accompanied by prescriptive and accompanying measures adopted by the préfet.^[150] For example, for the PPA of the Vallée de l’Arve (Haute-Savoie),a prefectural order requires compliance of wood-burning appliances with environmental rules whenever a property is sold. In each real estate transaction, the seller must prove that the installation is compliant or, if not, carry out the necessary work to bring it up to standard.^[151]

Other levels for action are financial aids such as loans, grants, and subsidies, and other forms of support^[152] or tax incentives (VAT reduction or tax credit^[153]) for the energy renovation of buildings, particularly housing for which there are State and 74local authority incentives. This financial aid is granted subject to the work being carried out in accordance with technical environmental standards. It comes in addition to all other renovation incentives, particularly the ones banning owners from letting inadequate housing premises (see § 5.2).

Last but not least, the French law on residential buildings divided in flats (copropriété des immeubles bâtis)^[154] has, until recently, been a hindrance to the renovation of residential buildings. Specifically, the law used to focus on building up funds for ordinary repairs but failed to address the need for large-scale improvements to existing buildings. This was due, in part, to the lack of a legal obligation to plan for such repairs and, therefore, anticipate their cost. New provisions have been inserted in to the law to that effect, requiring owners to draft a multi-year renovation plan and the associated costings, all of which are to be renewed every ten years, with specific reference to the reduction of energy consumption.^[155]