The need to take measures to adapt infrastructure and housing to address the devastating effects of the climate crisis was emphasised by the president of the European Construction Industry Federation (FIEC), Piero Petrucco, in the interview he gave to the Athens-Macedonian News Agency (ANA-MPA). As he characteristically said: “ The time for action is now”.
The members of the European Construction Industry Federation (FIEC), as well as personalities from all over the world, were recently in Athens, as the Panhellenic Association of Engineers Contractors of Public Works (PEDMEDE) hosted the annual pan-European conference of the Federation, which, this year, had the theme “ Building Tomorrow: Solutions for Water Resilience and Blue Infrastructure”. The FIEC General Assembly was also held in Athens. Petrucco answered the question of whether infrastructure (existing and planned) will ultimately be able to cope with the (currently unknown) consequences and impacts of the climate crisis, but also whether national economies and the EU can ultimately cope with the ever-increasing costs they are called upon to pay for this purpose. He explained how the necessary modernisation of infrastructure can - and should - be carried out, in order to ensure both proper water management and protection from floods. And he referred to specific initiatives, solutions and proposals for addressing the housing crisis that is affecting the whole of Europe.

The full text of Piero Petrucco's interview with ANA-MPA journalist Elias Palialexis follows.

Q: Αt the FIEC Annual Conference it was highlighted that the European construction industry has the expertise to build solutions to provide essential services in tackling water challenges. Can you explain this to us?

A: What we discussed - together with our members, speakers and guests - at the FIEC Annual Conference on 16th May, at the SNFCC in Athens, is that the construction industry is essential to building real, lasting solutions to Europe’s growing water challenges. Floods, water scarcity and water pollution are issues that are already hitting our citizens and economies hard.
Our sector has the expertise to act. We are the ones who build and maintain the infrastructure that ensures water treatment, distribution, storage, and flood protection. With over 6.5 billion cubic meters of water lost every year in the EU - due to poorly maintained pipes and extreme weather - it is clear that resilient infrastructure is not optional, but an urgent matter. The time to act is now! As the EU prepares its Water Resilience Strategy and places water at the heart of its political agenda, it is clear that the construction sector will have an essential role in turning those ambitions into reality. So, when we say the construction industry “ builds the change”, we mean it literally. Without the involvement of our members, companies, services and contractors, no water resilience strategy can succeed.

Q: Many people argue that even the projects that are planned today -and will be built in the coming years- may not be able to cope with future demands, as it is difficult (if not impossible) for someone to predict the consequences of the climate crisis. How do you comment on this approach?

A: To build resilient water infrastructure that is fit-for-purpose, we must do our best to anticipate future demands. This is not an easy exercise, but overall data availability will help bringing predictions much closer to the reality of future scenarios about regional water demands. The European Construction Industry Federation is therefore calling for a better monitoring of the grid, using new technologies like smart metering, and to make information available in a digital form. In-depth knowledge about the grid is key to assessing priorities to secure a joint effort to achieve the effective and rapid maintenance and renewal of existing water distribution networks. A dedicated EU Water Fund must be part of the upcoming Multiannual Financial Framework to co-finance the monitoring and digitalisation of the grid, with the aim of making smart meters and sensors the standard.

Q: Many people also argue that adapting to the climate crisis may ultimately be very expensive. Αnd national economies, but also the EU, will not be able to cope. How do you comment on this?

A: It is true that adapting to the climate crisis comes with significant costs. But from our point of view, these costs are not just necessary but increasingly unavoidable. We are already seeing the impacts of more frequent extreme weather events like flooding, droughts, or coastal erosion. Those situations are placing unprecedented stress on existing hydraulic infrastructure, which has not been designed for the scenarios we are facing today or in the future. Upgrading and future-proofing this infrastructure is a matter of resilience and risk mitigation.
And the financial pressure is hitting public and private bodies equally. Insurance costs for buildings and infrastructure are rising because of climate risks, and service disruption is growing. In some regions, insurance is even becoming unavailable. That alone is a strong economic argument for investing in climate-resilient infrastructure now, like stormwater retention, flood defences, and smarter, more flexible water distribution networks.

Q: Mr. Petrucco, to another issue, now, which concerns construction, but of a smaller scale, housing and the cost of which has skyrocketed, throughout Europe. The housing crisis is now a fact and the EU is looking for solutions. What are the positions of the construction industry on the issue? How can the housing crisis problem be solved?

A: Across Europe, the cost of housing has indeed come to a breaking point. This is not a demand crisis, this is a supply crisis. We do not build (and renovate) enough housing units where citizens need them more.
We welcome that European Commission President, Ursula von der Leyen, set this housing crisis as a priority with the appointment, for the first time, of a dedicated commissioner for housing policies, this is a very positive step.
It is also highly encouraging that the recently approved reform of cohesion policy, led by Vice President Raffaele Fitto, places great emphasis on this issue, which represents one of the most urgent and complex social and economic challenges for all of Europe. For this reason we remain positive, as now, everybody understands the urgency of tackling this crisis.
Under the construction industry perspective, FIEC wants to address the multiple drivers of building costs. At all levels (global, European, national, local), we face regulatory burden, slow administrative procedures, industrial shortcomings, lack of skilled workers and land. Not to mention a difficult access to financing.
In terms of solutions, there is no silver bullet. In the first place, this is due to the fact that different local challenges will require different types of answers. Clearly, we can gain productivity in our sector, for example, through digitalisation, innovation, standardisation and circularity of raw materials. But this requires investments. We need increased support from EU funds and the EIB financial instruments. We also need an easier lending framework for housebuilding projects, through more flexibility from the European Central Bank and “ Basel” prudential rules, according to which housebuilding projects are high risk.
When it comes to the EU, it can take action where it has concrete responsibilities. We believe that the EU could simplify its laws which have an impact on building costs and procedures. In the same way, the EU could simplify EU legislation having an indirect impact on zoning and permitting procedures at national and local levels. In addition, whereas the EU cannot “ force” Member States to take action: at least, it can propose recommendations and guidelines, based on shared best practices.

Q: And a last question, since throughout Europe, houses are of older construction and their renovation (to “ green houses”) costs a lot. Do you believe that the subsidy policy (of materials and services for this purpose) can provide a solution? Or should we consider reaching a global (even pan-European agreement) to reduce the prices of materials? And how do you assess the EU’s approach to the issue so far?

A: I think that the various incentive policies - including through subsidies or fiscal advantages - which have been put in place in the various Member States have proven quite efficient. Indeed, the renovation process is costly and again, administrative procedures are quite lengthy.
I believe that subsidies must target an overall renovation target, rather than specific materials or services. This renovation target has been set at EU level, to at least 2% (the current annual rate is below 1%). About 70% of the EU building stock is energy inefficient, and the renovation rate must accelerate to meet the energy reduction goals for heating and cooling.
However, the key challenge with energy-efficient renovations is the high upfront cost of investment. Even when the energy savings are paying off after some years already, it is still the main factor for restraint by households. Innovative financing and risk-sharing models could therefore be part of a solution.