Increasing actions and investment to accelerate building renovations will also lead to sustaining a green economic recovery from the coronavirus pandemic and improving living conditions for Europeans.

This paper answers the question how quickly the building sector can reduce its CO₂ emissions and what actions will be necessary to achieve this. Using the European Calculator (EUCalc) model, the paper presents two possible pathways of emission reductions in the building sector to 2030 and describes the respective measures to achieve them.  

The “Moderate Policy Scenario” foresees a moderate acceleration of actions compared to current trends and policies, including a doubling of the renovation rate. 

The “Responsible Policy Scenario” builds on these measures but increases the depth and speed of change in the sector, and further integrates decisions to switch to more climate-aware and environmentally responsible behaviour.  

Only the Responsible Policy Scenario achieves emissions reductions in the range of 60% compared to 2015, which is aligned with a 55% GHG emission cut in 2030 as supported by the European Commission and highlighted in the Renovation Wave. It requires a transformation in the sector which changes current construction and renovation practices and supports the combination of strong efficiency measures with a phasing out of fossil fuels and switch to renewable energy. The scenario delivers an energy saving of almost 25% by 2030 compared to 2015, equivalent to an average energy saving of 2.5% per year. 

The current deep renovation rate of 0.2%/a needs to grow by at least a factor 10 to 2% and should approach 3% as quickly as possible. The scenario describes how the share of fossil fuels in the energy mix in 2030 will decrease by 57% compared to 2015, while the renewable heat and electricity share will grow to 53% of the final energy demand.  

This transformation will be possible with effective policies and support instruments. The Renovation Wave is opening the way to measures that will transform the building sector, but the implementation of policies and support instruments must become faster and more ambitious. 

The Responsible Policy Scenario and its associated assumptions gives guidance for possible measures that could achieve a greater impact: 

• The average rate of renovation should be increased to at least 3% per year to ensure the renovation of the full building stock by mid-century.  
• Renovation practice needs to be scaled up to industrial levels. A focus on deep renovation will reduce energy demand in buildings and will replace existing heating systems with more efficient and renewables-based systems. 
• Member States should rigorously follow the NZEB principle for all new buildings.  As of 1 January 2021, all new buildings in the EU must be NZEBs, combining very high energy performance with significant renewable energy supply. No new fossil fuel heating system should be installed in new construction from 2021 onwards. Any new installation of fossil fuels-based heating systems locks in CO2 emissions for the next two decades. 
• A strategic effort to decarbonise heating and cooling energy supply and to invest in low temperature renewable heat supply infrastructure is needed. 
• The use of fossil fuels for heating and hot water in buildings should drastically decrease in the next decade. Considering that the average lifetime of heating equipment is in the range of 15-20 years, policies to discourage installation of new fossil-fuel based systems should be implemented. 
• To achieve faster and deep renovations, mandatory minimum energy performance requirements can be an effective policy, as indicated in the Renovation Wave. These should be tailored to specific segments of the building stock and ownership tenures and coupled with financing and targeted advice. 

The more the transformation is delayed, the higher the effort in increasing renovation rate and depth will have to be in the next decade. 

The expected revisions of the Energy Efficiency Directive, the Renewable Energy Directive and the Energy Performance of Buildings Directive in 2021 are crucial opportunities to enshrine the needed changes into legislation and the increased financial support provided by the Next Generation EU must be used to help this change materialize. EU Member States need to increase the speed and effectiveness of national policies and should launch effective action on the ground by involving citizens, local authorities, investors and the construction value chain.