The COP29 climate summit in Azerbaijan recently brought renewed attention to global climate goals. The COP29 was highly relevant as it built on the global momentum to combat climate change under the framework of the Paris Agreement. The conference focused on accelerating efforts to limit global warming to 1.5°C by aligning national climate commitments (Nationally Determined Contributions, or NDCs) with the long-term goal of net-zero emissions by 2050. The COP29 was mainly aimed at securing more financial aid for developing countries, which does not directly contribute to the climate goals at the national level in the Netherlands. Therefore, it is essential to consider how these goals are implemented at the national level.
In the Netherlands, the Environmental and Planning Act (Omgevingswet, Ow) plays a critical role in transitioning to a more sustainable built physical living environment. It is even articulated as one of the societal objectives of the law. This is embedded in article 1.3 Ow:
"This law, with an eye toward sustainable development, habitability of the country, and the protection and improvement of the living environment, aims to achieve and maintain a safe and healthy physical living environment and good environmental quality in an integrated manner, also recognising the intrinsic value of nature; and to efficiently manage, use, and develop the physical living environment to meet societal needs."
The Ow is therefore rooted in the ambition to create a safe, healthy, and sustainable physical living environment. Article 1.3 Ow emphasizes that sustainability goals are central to the policy making by (local) authorities.
The key instrument for this is the environmental plan. The environmental plan allows municipalities to set sustainability requirements for the physical living environment. In short, it explicitly grants governing bodies the authority to steer toward sustainability.
For real estate developers and property owners, this implies a changing playing field. The expanded scope of the environmental plan presents opportunities, such as developing innovative and sustainable projects. At the same time, the associated requirements also require an even more active role from the developers and property owners.
At this moment the environmental plan (mainly) exists of the ‘old’ zoning plans that are, by operation of law, incorporated in the temporary part of the environmental plan. This entails that right now, no sustainability goals are included in the environmental plan. Although municipalities have until 2031 to transition the temporary section of the environmental plan into the new framework, it is important to anticipate the changes that will be embedded in the coming years.
Therefore, this article examines: (i) what changed on this matter pursuant to the Ow; (ii) recommendations for developers; (iii) the responsibility for compliance with these sustainability goals; and (iv) concludes with a summary of key findings.
Changes pursuant to the Ow
Several facets influence the sustainability requirements in the environmental plan. However, this article will only focus on two: the proportional allocation of functions to locations (in short (Dutch) ETFAL) and the inclusion of mandatory provisions.
The legal basis for sustainability requirements
First of all, ETFAL. Unlike the previous criterion of ‘good spatial planning’ under the Spatial Planning Act (Wet ruimtelijke ordening, Wro), ETFAL is broader and better suited for integrating sustainability goals. The key difference between ETFAL and the former ‘good spatial planning’ standard lies in their focus and flexibility. Good spatial planning primarily emphasized spatial functionality, coherence, and minimizing conflicts between land uses. It was a narrower concept, often limiting municipalities to ensure that developments were appropriate for their location without explicitly prioritizing sustainability. On the other hand, ETFAL allows municipalities to consider a broader range of factors, enabling them to align spatial planning with long-term societal challenges such as energy transition, climate resilience, and sustainable resource management. This also aligns with the societal goals of the Ow, as mentioned in the introduction.
Mandatory provisions: a new approach
Addressing the second aspect of the above question, the Wro was based on the principle of permissive planning, meaning that zoning plans prescribed which uses and construction activities were permitted on a specific plot. Only explicitly permitted activities were allowed, aiming to prevent undesirable uses and keep development within clear boundaries. However, this approach offered little room to address broader societal goals such as sustainability or climate adaptation.
With the Ow, there is a shift toward a broader and more integrated approach to spatial planning. The environmental plan can include not only permitted uses and construction options but also active obligations. These so-called mandatory provisions might, for instance, require achieving certain sustainability goals. Mandatory provisions enable municipalities to direct concrete outcomes in climate adaptation, biodiversity, energy efficiency, and health.
Municipalities can implement sustainability requirements in various ways within the environmental plan. This might include imposing obligations on new construction, such as achieving energy-neutral buildings or using circular materials. Additionally, area-based measures can be introduced, such as requiring gas-free neighbourhoods or the installation of green roofs in urban areas. Energy performance scoring systems might also be introduced, with permits only granted if a project meets specific thresholds. Other examples include mandating green roofs and facades (e.g. roofs and facades with moss and other plants), reducing heat stress through shaded green spaces, or promoting nature-inclusive construction, such as integrating birdhouses or biodiversity-enhancing elements in building designs.
While the Ow gives municipalities significant flexibility to tailor requirements to local conditions, this freedom is not unlimited. Environmental plan regulations must not conflict with other laws, such as the Housing Act (Woningwet), which restricts requirements for existing buildings. Municipalities must also consider proportionality when drafting plans to ensure that measures do not place an unreasonable burden on property owners or developers. As an obligation in the environmental plan to, for instance have a green roof, would be a very heavy burden on property owners, as they would then have to reconstruct their whole roof. Furthermore, the right to undisturbed property enjoyment must be respected as much as possible.
These constraints make it particularly challenging to impose extensive mandatory provisions for existing buildings. For new construction, requirements are easier to implement. For renovations, the feasibility depends on the scope of the work. In cases of demolition and reconstruction, sustainability requirements are more justifiable than for conversions with minimal structural changes. Therefore, the recommendations, considerations and actions below will mainly be for developers, rather than property owners.
Recommendations, considerations, and actions
The Ow provides municipalities with significantly greater capabilities to implement policies on various issues, including sustainability objectives previously only addressed at the policy level. This not only allows municipalities to formulate these objectives but also grants them enforcement authority. Property owners or developers failing to meet the prescribed sustainability requirements may eventually face penalties, such as an order subject to a penalty or a fine. This creates both opportunities and challenges for real estate professionals. By proactively adapting to new requirements and collaborating with municipalities, they can play a pivotal role in transitioning to a more sustainable built environment.
Be vigilant (consideration)
The flexibility offered by the Ow will not disappear. Therefore, developers (and property owners) must stay informed about municipal developments. When changes are made to the environmental plan, it is crucial to closely monitor the consequences. If sustainability requirements jeopardize the feasibility of a business case, timely objections against these changes in the environmental plan are essential.
Collaborate (recommendation)
As the Ow is still relatively new, municipalities are likely to encounter initial challenges in its implementation. This creates opportunities for developers (and property owners) to contribute to its development. Collaborating with municipalities early can help develop practical, feasible solutions that meet environmental plan requirements while adding value to projects. Constructive dialogue is key to crafting regulations that are ambitious yet economically viable. Therefore, it is crucial to always be in good touch with the municipality so that both parties can learn from each other.
Invest in knowledge (action)
Meeting the requirements of the Ow calls for a strategic approach to real estate development and management. Developers (and property owners) who invest in sustainability knowledge and new technologies will gain a competitive edge. This might include expertise in circular construction, renewable energy solutions, and climate-adaptive designs. Utilizing digital tools, such as energy performance monitoring systems or materials banks, can help meet requirements and save costs simultaneously.
Green Leases (opportunity)
As previously outlined, the OW introduces new possibilities to embed sustainability requirements into the living environment, encouraging landlords and tenants to collaborate on sustainability initiatives. So called Green Leases are increasingly being used in real estate leases. These are sustainable rental agreements that establish terms related to energy conservation, CO₂ reduction, water management, and waste reduction. One way the Ow facilitates this collaboration is by providing a clear framework for sustainability obligations. This helps align Green Leases with the specific sustainability goals of municipalities and can result in clear agreements regarding cost responsibility and accountability for energy-saving measures and initiatives between landlords and tenants. Additionally, the Ow streamlines the permitting process, making it easier to implement sustainable upgrades such as solar panels or improved insulation.
Conclusion
The introduction of the Ow marks a significant step in the sustainable transformation of the built environment in the Netherlands. The environmental plan, as a central instrument of this law, allows municipalities to embed sustainability goals locally and impose obligations, such as achieving energy-neutral buildings or promoting circular construction. This shift from a restrictive to an active approach presents opportunities and challenges for property owners and developers.
By investing early in knowledge, collaborating with municipalities, and viewing sustainability as an opportunity, property owners and developers can not only meet the new requirements but also strengthen their competitive position in an increasingly sustainable real estate market. In conclusion, the Ow establishes not only obligations but also significant opportunities for stakeholders to assume a leadership role in driving the transition toward a more sustainable built environment.
