Green buildings in the Czech Republic

What is meant by a green building and what are the legal frameworks?

A green building (sometimes also referred to as a sustainable building or a low-energy building) is not a legally uniform term with a single definition. Rather, it is a set of criteria that a building may meet on different levels:

Energy performance – the most important legal criterion. It is measured in kWh/m² per year and is regulated by Act No. 406/2000 Coll., on Energy Management, in connection with European Directive (EU) 2024/1275 (the so-called EPBD recast, the new wording of the Energy Performance of Buildings Directive).

Building life cycle – certification systems such as BREEAM, LEED, or the Czech (less widespread) system assess a building from its design through construction to operation and demolition. These systems are not mandatory, but without them it is harder to access green financing (green bonds, ESG mortgages, etc.).

Legal framework in the Czech Republic: The energy performance of buildings is governed primarily by Act No. 406/2000 Coll., on Energy Management, and the implementing Decree No. 264/2020 Coll., on the Energy Performance of Buildings. Directive (EU) 2024/1275 was to be transposed into Czech law by 29 May 2026. That did not happen. The Commission therefore opened infringement proceedings against all 27 Member States, including the Czech Republic, on 15 July 2026. According to available information, the draft amendment to the Energy Management Act is in the consultation procedure. Until it is adopted, the new obligations under the directive do not apply directly to investors in the Czech Republic; the existing Czech rules apply:

• Every new building must meet the requirements for a nearly zero energy building (NZEB – Nearly Zero Energy Building) under Decree No. 264/2020 Coll., as in force on the date on which the project permit becomes final; for all new buildings this has applied since 1 January 2020 at the latest. The directive envisages the stricter zero-emission building standard (ZEB – Zero-Emission Building), but in the Czech Republic it will apply only after transposition.
• Buildings undergoing a major renovation of an existing building (a change to more than 25% of the building envelope area, e.g., extensive insulation) must meet the energy performance requirements under the decree.
• Under the directive, new buildings owned by public bodies are to meet the ZEB standard from 1 January 2028; in the Czech Republic this will become binding only after transposition.

Our attorneys in Prague at ARROWS view this area as exceptionally high-risk – legislation is evolving very quickly and the interpretation of individual rules is not always consistent in practice. That is why you need a substantive advisor who will help you identify in time which obligations specifically apply to your project.

Obligations under EU and Czech law

If you are an investor or developer in the Czech Republic, you should be aware of the following obligations:

1. Energy Performance Certificate (PENB) and energy audit

Any building intended for sale or lease, as well as new buildings and buildings undergoing a major renovation, must have a valid Energy Performance Certificate (PENB). An energy audit is a deeper analysis aimed at identifying potential savings, and only selected enterprises with higher energy consumption and the public sector are required to have one carried out. Both the PENB and the audit must be prepared by an authorised person – an energy specialist – and the certificate includes specific technical parameters of the building, its energy class (A to G, where A is the best), and recommendations for improvement. Where these documents are being prepared alongside design-and-build obligations, it can help to coordinate responsibilities and contractual risk allocation under Development & Construction Law.

A common mistake: Many developers believe that an old certificate from before an energy refurbishment is sufficient. That is not true – the certificate is valid for 10 years, but no longer than until a major renovation of the existing building is carried out or until the method of heating, cooling or hot water preparation is changed. If you do not update it, the building may still be sold or leased, but the seller or landlord faces a fine of up to CZK 200,000. Whether the buyer or tenant also has private-law claims depends on the contract and the circumstances, so it is advisable to address this expressly in the contract. Similar allocation-of-risk issues can arise in transactions and leases, as discussed in Buying Property with a Tenant in Place: Key Lease Risks Under Czech Law.

2. New building = NZEB already now, ZEB in the foreseeable future

Czech legislation requires every new building to meet the nearly zero energy building (NZEB) standard. The builder demonstrates compliance by means of an energy performance certificate, at the latest with the application for the final approval (occupancy permit). Directive (EU) 2024/1275 introduces an even stricter zero-emission building (ZEB) standard. It will apply in the Czech Republic once it is adopted by the Czech amendment.

Under the directive (after its transposition):

• New buildings owned by public bodies must be zero-emission buildings from 1 January 2028.
• All other new buildings must be zero-emission buildings from 1 January 2030.
• The Czech transposing amendment may also set stricter national requirements for certain categories of buildings. At the same time, the directive allows the ZEB requirements not to apply to buildings for which the permit application was submitted before those dates. The final Czech wording is not yet known.

Practical impact: You cannot build “commercially cheap” buildings with weaker insulation and deep-set windows. You must invest in high-quality energy performance already at the design stage, otherwise you will not be able to demonstrate compliance with the requirements by the certificate at final approval and you face a fine. If you do not clarify this with the designer and the site manager already at the tender stage, you may end up with a construction that cannot be legally completed and properly used.

3. Mandatory measures to reduce energy consumption during renovations

If you renovate an existing building and it qualifies as a so-called major renovation of an existing building, i.e. a change to more than 25% of the total area of the building envelope (typically extensive insulation or window replacement), you must meet the energy performance requirements under the decree. Requirements for the elements being changed (windows, insulation, heat source) also apply to smaller changes. The law defines what requirements such a renovated building must meet.

You cannot do without this if you want to maintain the building’s attractiveness and ensure its future financeability. In addition, Directive (EU) 2024/1275 requires Member States to introduce minimum energy performance standards (MEPS) for existing non-residential buildings, which are intended to lead gradually to the renovation of the worst-performing ones. Specific obligations for owners will be set only by the Czech transposing legislation.

4. Renewable energy elements

Directive (EU) 2024/1275 requires Member States to ensure the installation of solar systems where this is technically suitable and economically and functionally feasible. Under the directive, this is to apply:

• by 31 December 2026 for new public and new non-residential buildings with a useful floor area of more than 250 m²,
• for existing public buildings gradually: over 2,000 m² by 31 December 2027, over 750 m² by 31 December 2028 and over 250 m² by 31 December 2030,
• by 31 December 2027 for existing non-residential buildings over 500 m², if they undergo a major renovation or an alteration requiring a permit,
• by 31 December 2029 for all new residential buildings and new roofed car parks adjacent to buildings.

For an investor in the Czech Republic, these deadlines will become binding only once the Czech transposing legislation is adopted, and it may add exemptions and details. However, it makes sense to prepare new non-residential projects with final approval in 2027–2028 for photovoltaics now: retrofitting the roof, structural design or electrical installation tends to be significantly more expensive. In addition, banks often prefer projects with renewable energy sources.

Green building certifications and standards

Alongside legally binding obligations, there are a number of voluntary certification systems. Although they are not statutory, they have an enormous practical impact on financing and the commercial value of your building.

BREEAM (Building Research Establishment Environmental Assessment Method) – a UK standard with worldwide recognition. It assesses a building based on criteria including energy, water, health and indoor environmental quality, management, transport, materials, waste and innovation. The building receives a rating: Unclassified, Pass, Good, Very Good, Excellent or Outstanding.

LEED (Leadership in Energy and Environmental Design) – a US standard with certificates ranging from 40 to 110 points. It is more popular in the USA, but it is also expanding in Europe. Ratings: Certified, Silver, Gold, Platinum.

Although green building certification is not mandatory, banks may assess projects without it less favourably, and many financial institutions offer certified buildings more favourable terms.

If you have the building certified only after completion, it will achieve worse results and will be significantly more expensive than if you design it with certification in mind from the very beginning.

The attorneys at ARROWS are aware that certification processes are complex and require coordination with the designer, site manager, auditors and certification bodies. If you want to be sure the process is handled correctly, you should seek advice early—rather than only once problems arise.

Specific requirements for investors

Energy performance – what you must meet in practice

If you are building or renovating, here are the specific rules and deadlines you need to know:

Money and penalties

The builder demonstrates compliance with the NZEB requirements by means of an energy performance certificate submitted with the application for the final approval (occupancy permit), so non-compliance will become apparent at final approval at the latest. A builder, whether a company or an individual, faces a fine of up to CZK 5,000,000 under the Energy Management Act for failing to meet the energy performance requirements for a new building.

If you sell or lease a building or unit without presenting the certificate to the prospective buyer or tenant and handing it over when the contract is signed, you face a fine of up to CZK 200,000. This applies to both companies and individuals. You must also state the classification class in advertising.

Other regulatory obligations

EU Taxonomy – a set of criteria determining whether your building is “sustainable” under EU law (Regulation (EU) 2020/852).

If you want access to green financing or EU funds, your building must meet these criteria. If you are unsure, at ARROWS we have Prague-based attorneys who can advise you on applying the taxonomy to your specific project.

Declaration of Performance – if you are constructing a building, it is necessary to ensure that all construction products meet the requirements of the EU rules on construction products (from 8 January 2026 the new Regulation (EU) 2024/3110, while the provisions of the existing Regulation (EU) No. 305/2011 on the declaration of performance continue to apply on a transitional basis) and have a Declaration of Performance (DoP) issued. This is essential to ensure the quality and safety of the building.

Water and waste – in addition to energy, green construction also assesses water consumption and waste management. Some certification systems have strict requirements for rainwater harvesting systems, recycling of construction materials, etc. Even without certification, there are legislative requirements for water and waste management.

Practical risks and the most common mistakes in projects

Risks that investors often underestimate

• Error in the energy audit / PENB
  An energy specialist measures or calculates the energy performance incorrectly. The building then fails to meet the required standards (e.g., NZEB), even though it was assumed it would. Consequence: The occupancy approval will be delayed, you face a fine, your mortgage will fall through, and the project becomes difficult to implement without major additional costs.
• Delayed green building certification
  Many developers think they will order certification (BREEAM, LEED) only after construction is completed. Mistake. The certifier then finds dozens of deficiencies that are very expensive to fix in a building that is already standing. Certification should be addressed in the project design and throughout its implementation, not ex post.
• Financing issues without certification

The bank may make your loan more expensive or refuse it because the building does not have a green building certification. This also complicates your tenant’s or buyer’s access to favourable financing. Reality: Without a recognised green building certification, it is now significantly more difficult to obtain advantageous “green” financing, and the property loses market value.

• Cross-border projects
  If you build for foreign clients, they rarely realise that legal requirements for green buildings differ from country to country. A building that meets Czech requirements may not meet German or Austrian requirements.If ARROWS, a Prague-based law firm with a cross-border dimension to the project, does not assist you, you risk legal disputes and having to refund money.

Financing green buildings – legal aspects

Legal framework for sustainable finance and the EU Taxonomy

The EU supports the financing of green projects through so-called sustainable finance (green bonds, green mortgages, ESG funds).

For your project to qualify for these products, it must generally meet the criteria of the EU Taxonomy (Regulation (EU) 2020/852). This means the lender will usually contractually reserve the right to audit your building and verify that all promised energy parameters are real. If you provide false information or the parameters are not met, you face repayment, penalty interest, and a legal dispute.

Contracts with the site manager and subcontractors

If you place emphasis on energy performance and sustainability in the project, this must be clearly defined in the scope of works and in the contract with the contractor. A common mistake: The contract is silent on the obligation of energy efficiency. The contractor then builds “normally”, regardless of green standards.

ARROWS attorneys in Prague are aware that construction contracts with energy-related obligations must be specifically tailored. We will help you prepare a contract that protects your interests and clearly defines the obligations of all parties.

Summary

Green buildings in the Czech Republic are not a luxury – they are legally mandatory standards that will become even stricter in the coming years. If you are an investor, developer or property owner and you do not meet energy obligations (NZEB for new buildings, energy performance certificates and, for selected enterprises, audits), you face financial penalties, blocked transactions, inability to obtain favourable financing, and legal disputes.

Seemingly simple steps (ordering an audit, collecting data for certification, preparing an energy performance certificate) conceal many procedural details, legal dependencies and risks. Common mistakes in this process cost projects hundreds of thousands to millions of Czech crowns and can cause delays, or even result in you not completing the construction or obtaining occupancy approval at all.

If you want to be sure that your project will meet all legal requirements for green buildings without surprises and fines, entrust the matter to the lawyers at ARROWS, a Prague-based law firm.

We will help you review your project’s energy obligations, coordinate with energy specialists and contractors, prepare certification documents, negotiate with banks on financing, and, if necessary, defend you in dealings with authorities. Contact us at consultation@arws.cz.

Read also:

• Managing Czech building permits: Avoid delays and protect your investment
• Integrated Permits in the Czech Republic: Process, BAT and IED 2.0 Changes
• When Smaller Czech Construction Projects Trigger Mandatory EIA
• Legal Support for Development Projects in the Czech Republic: Key Risks
• Liability for Poor Construction Briefs Under Czech Civil Code