EU BUILDINGS ARE SIGNIFICANTLY OFF TRACK TO CLIMATE NEUTRALITY

Heating and cooling of buildings is one of the largest sources of greenhouse gas emissions in Europe. As the EU and its Member States have established clear goals for reducing these emissions, progress requires close scrutiny. To evaluate whether the sector is on track to achieve carbon neutrality, BPIE has developed the European Buildings Climate Tracker (EU BCT), now in its third edition.

The latest index reveals that the EU buildings sector is significantly off track to meet its 2030 and 2050 climate goals. Overall, the four key indicators of the EU BCT – CO₂ emissions reduction, final energy consumption, renewable energy share and renovation investments – are over 40% away from the necessary decarbonisation pathway.

With 2022 marking the halfway point toward our 2030 climate milestone since the Paris Agreement, the starting point of our tracking, the stark reality is that progress at the current pace will not achieve the 2030 targets. Alarmingly, the decarbonisation gap in 2022 has more than doubled since 2016.

The Tracker is based on a 100-point scale, starting at zero in 2015 and reaching 100 for climate neutrality in 2050. In 2022, the difference between the tracker and the climate neutrality path exceeded 13 decarbonisation points, underscoring inadequate progress. This shortfall is primarily due to insufficient reductions in final energy consumption, a slow rollout of renewable heating and cooling, and unrealised renovation investments.

KEY FIGURES

• CO₂ emissions from building energy use have decreased by just 14.7% since 2015, far below the required 27.9% reduction by 2022. This shortfall has resulted in an additional 367 million tonnes of CO₂ being emitted into the atmosphere, equivalent to nearly a year’s worth of emissions from the entire EU building stock.
• Final energy consumption in buildings has dropped by only 2.8%, while the target was a 6.5% reduction. The reduction is happening at less than half of the required pace.
• Renewable energy share has increased by only 6.3%, far below the target of an 18% increase by 2022, primarily due to slow adoption of renewable heating and cooling systems. Renewables for heating and cooling need to quadruple.
• Investment in building renovation remains a major barrier, with investments reaching only 60.6% of the required target for 2015-2022. This underinvestment will make future renovations more challenging and likely more expensive.

SLOW TRANSFORMATION OF BUILDINGS IS NOT JUST A CLIMATE PROBLEM; IT’S A PEOPLE PROBLEM

Buildings that emit less CO₂ are better for people: they promote physical and mental health, enhance financial stability, support social equity, strengthen resilience in crises and improve energy security. Rising energy costs driven by post-COVID economic shifts and the energy crisis following Russia’s invasion of Ukraine have exacerbated energy poverty, now impacting 9.3% of the EU population. In 2022, households faced energy bills 24% higher than pre-2020 averages, leaving many in energy-inefficient homes vulnerable to volatile prices. Poor building conditions, which affect 15.5% of EU residents, are linked to respiratory health issues, higher healthcare costs and mental health concerns. Healthier, energy-efficient buildings can improve mental well-being at home, speed up recovery times for hospital patients, reduce employee turnover in healthcare and reduce overall medical costs. In workplaces and schools, enhanced indoor conditions can boost productivity and learning outcomes, adding substantial economic value across the EU.

Decarbonising buildings also presents a unique opportunity for job creation, with estimates suggesting 12 to 18 local jobs generated per million euros invested, and up to 160,000 additional green jobs in the construction sector could emerge by 2030. Investing in energy-efficient, renewable-powered buildings can drive innovation, bolster resilience and elevate quality of life – especially for those most affected by energy poverty and substandard living conditions.

CALL TO ACTION FOR MEMBER STATES: IMPLEMENT THE EPBD QUICKLY AND EFFECTIVELY

Recent legislative milestones, particularly the 2024 recast of the Energy Performance of Buildings Directive (EPBD) and key components of the Fit for 55 package, can lead the EU back on track to climate neutrality. These provide Member States with the necessary tools to significantly accelerate building decarbonisation, reduce emissions, enhance climate resilience and address societal challenges such as increasing energy prices and energy poverty.

The recast EPBD represents a powerful opportunity for Member States to lead decarbonisation at the scale and pace required for climate neutrality.

CALL TO ACTION FOR THE EUROPEAN COMMISSION: BOLD LEADERSHIP ON BUILDINGS NEEDED

With a new five-year EU policy cycle imminent, strong leadership from the EU Commission is critical to ensure that building decarbonisation becomes central to Europe’s strategic agenda.

As Europe navigates complex geopolitical, social and environmental challenges, the Commission must seize the opportunity to foster resilience and inclusivity, fully embedding this commitment in the 2024-2029 mandate. By making building decarbonisation a cornerstone of Europe’s prosperity strategy, the Commission will drive resilience and inclusivity, tackling energy poverty, boosting public health and creating jobs. These priorities resonate across the political spectrum, benefiting all Europeans.