Renovation Wave Strategy

Scope

European Scope

Released by

European Commission

Link

https://energy.ec.europa.eu/topics/energy-efficiency/energy-efficient-buildings/renovation-wave_en

In 1 sentence

Initiative to enhance energy efficiency in buildings, reduce emissions, and create green jobs across Europe.

Published year

2020

The European Renovation Wave Strategy: Transforming Europe's Built Environment

The Renovation Wave Strategy represents one of Europe's most ambitious initiatives to transform its building sector, aiming to significantly reduce energy consumption and carbon emissions while improving citizens' quality of life. Launched in October 2020 by the European Commission, this strategic framework addresses the critical challenge of renovating Europe's aging and energy-inefficient building stock, which is essential for achieving the EU's climate neutrality goals by 2050.

Background and Context

Buildings are responsible for approximately 40% of the EU's energy consumption and 36% of its greenhouse gas emissions. Despite this significant impact, the current annual renovation rate across the EU stands at a mere 1%, with deep renovations (those achieving over 60% energy savings) occurring at just 0.2%. This pace is drastically insufficient to meet Europe's climate goals.

The building landscape in Europe presents both challenges and opportunities. Approximately 85-97% of the EU's building stock was constructed before 2001 and relies predominantly on fossil fuels for heating. With 90% of today's buildings expected to remain in use by 2050, comprehensive renovation strategies are not optional but essential for Europe's energy transition.

Furthermore, energy poverty affects an estimated 34-40 million Europeans who cannot adequately heat or cool their homes, highlighting the social dimension of building renovation beyond environmental considerations.

Core Objectives and Targets

The Renovation Wave Strategy sets several ambitious targets:

Doubling Renovation Rates

The strategy's cornerstone objective is to at least double the annual energy renovation rate from 1% to 2% by 2030. This acceleration is crucial for making meaningful progress toward a climate-neutral building stock by 2050.

Scale of Renovation

By 2030, the strategy aims to renovate 35 million building units across Europe, focusing on both public and private buildings. This massive undertaking would transform approximately 15-20% of Europe's existing building stock within a decade.

Emissions Reduction

To align with the EU's overall climate goals, the Renovation Wave seeks to reduce emissions from the building sector by 60% by 2030 compared to 2015 levels, making it a critical component of the broader European Green Deal.

Economic Stimulus

Beyond environmental benefits, the initiative is expected to create up to 160,000 additional green jobs in the construction sector, providing economic stimulus and supporting a just transition to a low-carbon economy.

Key Principles and Focus Areas

The Renovation Wave is guided by four fundamental principles:

Energy Efficiency First

This horizontal principle ensures that energy efficiency is prioritized before expanding energy production, focusing on reducing unnecessary energy consumption at the source.

Affordability and Accessibility

The strategy emphasizes making energy-efficient buildings accessible to all, particularly addressing the needs of lower-income households and vulnerable communities affected by energy poverty.

Decarbonization and Renewable Integration

Building renovations must facilitate the integration of renewable energy sources and promote broader use of waste heat, helping to decarbonize both the building sector and connected systems like transport, heating, and cooling.

Life-Cycle Thinking and Circularity

The strategy promotes resource efficiency and circularity in construction, minimizing buildings' environmental footprint throughout their entire life cycle.

Priority Areas for Action

The Renovation Wave identifies three priority areas requiring immediate attention:

Tackling Energy Poverty and Worst-Performing Buildings

By targeting the least efficient buildings first, the strategy addresses both emission reduction and social inequality, helping vulnerable households escape energy poverty through lower energy bills.

Renovating Public Buildings

Schools, hospitals, administrative buildings, and other public facilities serve as demonstration projects and catalysts for wider adoption of energy-efficient renovation techniques.

Decarbonizing Heating and Cooling

With heating and cooling representing a significant portion of buildings' energy consumption, the strategy emphasizes transitioning from fossil fuel systems to renewable alternatives.

Implementation Framework

The Renovation Wave's implementation relies on several interconnected mechanisms:

Regulatory Instruments

The strategy strengthens regulations through revised directives, particularly the Energy Performance of Buildings Directive (EPBD), which was recently updated in 2024. This includes introducing minimum energy performance standards for existing buildings and mandating improvements for the worst-performing segment of the building stock.

Financing Solutions

Recognizing that funding is a major barrier to renovation, the strategy mobilizes resources through:

The Recovery and Resilience Facility, where 37% of funds are allocated to climate-friendly investments
Private investment stimulation through innovative financial products
Technical assistance to help project developers navigate complex renovation processes

Technical Capacity Building

The initiative addresses skills gaps in the construction sector through training programs for workers in building renovation and heating system decarbonization, ensuring the workforce can meet increased demand for renovation services.

National Building Renovation Plans

Each EU member state must develop comprehensive National Building Renovation Plans by the end of 2026, outlining their roadmap to achieve a highly energy-efficient and decarbonized building stock by 2050.

Current Relevance and Recent Developments

The Renovation Wave has gained increased relevance in recent years due to several factors:

Energy Security Concerns

The geopolitical situation in Europe has highlighted the vulnerability of fossil fuel dependency, making building energy efficiency a matter of energy security and resilience.

Economic Recovery

Post-pandemic recovery efforts have embraced the Renovation Wave as a means to stimulate economic growth through green investments, with the construction sector identified as a key job creator.

Legislative Progress

The revised Energy Performance of Buildings Directive (EU/2024/1275), which entered into force on May 28, 2024, represents a significant step in implementing the Renovation Wave's vision. It introduces new concepts like zero-emission buildings (ZEB) and establishes clearer pathways for the energy transition of the building sector.

Social Dimension

With rising energy costs affecting households across Europe, the focus on energy poverty reduction has made the Renovation Wave increasingly relevant to citizens' immediate concerns about cost of living.

Challenges and Future Outlook

Despite its comprehensive approach, the Renovation Wave faces significant challenges:

Ambition Gap

Some experts argue that even doubling the renovation rate to 2% annually may be insufficient, suggesting that a 3% rate with 70% being deep renovations is necessary to meet climate targets.

Implementation Capacity

The construction sector needs substantial upskilling and expansion to handle the increased renovation volume, requiring coordinated efforts in education and training.

Financial Barriers

Current investment levels fall far short of what is needed-an estimated €243 billion annually compared to the current €56 billion spent on medium and deep renovations.

Coordination Across Policies

The rapid introduction of multiple policy instruments raises questions about coherence and timing, potentially creating complexity for stakeholders.

Nevertheless, the Renovation Wave represents Europe's most comprehensive approach to date for transforming its building stock. Its success will be crucial not only for climate goals but also for energy security, economic recovery, and social welfare across the continent. As implementation progresses, continuous evaluation and adjustment of strategies will be essential to ensure that the ambitious targets translate into tangible improvements in Europe's built environment.