The EU is reshaping its energy sector towards a cleaner, electrified and more competitive future. Affordability, sustainability and energy independence are the driving principles of this change.
Well-performing buildings, with reduced and decarbonised energy consumption will play an important role in the process.
Revised EU rules on the energy performance of buildings aim to improve the energy standards of new buildings and accelerate the rate of energy renovations across Europe. They prioritise the worst performing buildings and integrating smart technologies and digital tools. Estimates indicate that three-quarters of buildings in the EU have poor energy performance, which exemplifies the scale of the challenge. At the same time, recognising the different realities across EU countries, the rules include flexibilities and exemptions where justified.
This article takes a look at the many benefits of improving the energy performance of buildings and highlights the work that is already under way across the EU.
Why does the energy performance of buildings matter?
Buildings are Europe’s single largest energy consumer, responsible for over 40% of the energy we use and one third of our greenhouse gas emissions.
Improving their energy performance therefore poses significant opportunities, both in terms of delivering the EU’s clean energy transition, accelerating electrification and strengthening our energy security at a time of global oil and gas market volatility.
Buildings with a higher energy standard consume less energy, making them
- easier and cheaper to keep at the desired temperature all year round – reducing your energy bill
- more sustainable – kinder on the climate and your local environment
- an important part of reducing Europe’s dependence on expensive fossil fuel imports
They’re also more comfortable to live, work and spend time in, and better for our health!
The gap in energy consumption between the best and worst performing buildings speaks for itself. A building in Class A consumes on average 10 times less energy than an equivalent building in the lowest class G.
Saving money and creating value for households and businesses
Building renovations can generate considerable yearly savings – a recent study estimated average savings of up to €900 per household. With 9.2% of Europeans unable to keep their homes warm enough in 2024, adequately supported energy renovations offer a concrete and durable solution to lift many of these people out of energy poverty.
These benefits extend to public authorities and buildings such as schools, hospitals offices or shops, reducing their energy consumption – and with it, their operational costs. In addition, building renovations generate local jobs in the construction sector and in the EU cleantech industries and services sector.
In many cases, individual measures like installing new windows, insulating the roof or walls or changing the boiler, have the potential to deliver substantial energy performance improvements – without the need for more extensive renovation works.
A matter of EU energy security
Our energy system is better off if it does not rely on imported fossil fuels. Buildings for their part are our biggest opportunity to reduce the import dependency risks.
35.8% of the EU’s natural gas imports are used for heating in buildings, with EU households consuming more than 75% of their energy for space heating and cooling and domestic hot water.
According to a recent study, renovating Europe’s residential and non-residential buildings can lower our gas demand and imports by up to 60 billion cubic meters of gas per year by 2040, a reduction of about 60% compared to the amount of natural gas used in buildings in 2024. It is thus one of the fastest and most secure way to boost Europe’s energy security and independence.
A more efficient energy system
Buildings that use more energy put a greater strain on the energy grid, and that costs money. Energy efficient buildings, on the other hand, create grid efficiency, reducing pressure on the grid and increasing stability, thereby lowering grid costs.
Insulating the EU’s residential buildings would result already in a 44% reduction of energy demand for heating in buildings. This would potentially save €44.2 billion in distribution grid investments and deliver a 75% decrease in transmission grid congestion. The integration of on-site renewable energy, storage and demand response in buildings also strengthens grid stability.
A more efficient grid, thanks to better performing buildings, therefore strengthens Europe’s global competitiveness, and by extension, our economy, industry and jobs.
A simple step with quick savings – and benefits for the grid – is a switch to smart metering and dynamic tariffs, which enables households to reap the benefits of programming their appliances like washing machines and dishwashers, as well as electric vehicle charging to operate when electricity is cheapest. This also helps make the most of solar panel generation, and thereby reduces pressure on the grid at peak consumption periods.
Energy renovations of existing buildings
EU countries are developing their own national building renovation plans to transform residential and non-residential buildings, both public and private, by 2050.
For non-residential buildings, such as offices, schools or hospitals, minimum energy performance standards will trigger the renovation of the 16% worst-performing buildings by 2030 and of the 26% worst-performing buildings by 2033.
For homes, EU countries will have to put in place measures ensuring that the average energy use of the residential building stock is reduced by 16% in 2030 in comparison to 2020, with higher targets for the following decades.
Under the Recovery and Resilience Facility – a temporary EU financing instrument available to EU countries to make their economies and societies more sustainable, resilient and prepared for the green and digital transitions – EU countries are renovating the equivalent of more than 420 million m2 of residential floorspace (or 4.7 million dwellings) and 76 million m2 of non-residential space, with a total of €66 billion in funding overall. For the residential sector alone, this is projected to lead to annual energy savings equivalent to the yearly primary energy consumption of more than 1.2 million households, avoiding almost 4 million tonnes of CO2-emissions per year.
Zero emission buildings
‘Zero-emission’ will become the standard for new buildings owned by public bodies from 2028 and for all new buildings from 2030. Although there is no requirement to renovate existing buildings to zero-emission level, it can be achieved through deep renovation, and will become the ‘gold standard’ for building renovation.
Zero-emission buildings have no on-site emissions from fossil fuels, need very little to no energy – thanks to good insulation, smart design and efficient systems and use clean energy sources from on-site or nearby renewable sources.
Thanks to EU rules, new buildings must be designed to optimise their potential for solar energy generation. For new building permit applications submitted from the beginning of 2030 onwards, solar installations will be required where they make sense. Although existing residential buildings can also benefit greatly from installing solar energy, there will be no requirement to do so. Meanwhile, solar installation will gradually be rolled out for certain existing non-residential buildings where solar makes sense.
Moving forward, the installation of new boilers powered by fossil fuels will gradually be phased out, with 1 January 2025 marking the end of financial incentives for stand-alone boilers powered by fossil fuels.
Want to learn more?
Our series of fact pages on energy efficiency and buildings explain the EU’s rules on the energy performance of buildings in a simple and easy to understand way. The collection so far covers
