Published December 15, 2025
By NZero
The European Union’s climate and energy agenda places the building sector at its core. Buildings account for a significant share of final energy consumption and carbon emissions across the EU, largely due to aging structures, inefficient heating systems, and slow renovation rates. Against this backdrop, the Renovation Wave was launched as a strategic initiative under the European Green Deal to accelerate energy-efficient renovations, improve living conditions, and strengthen economic resilience. By focusing on existing buildings rather than new construction alone, the policy recognizes that decarbonization goals cannot be achieved without transforming the current building stock.
The Renovation Wave was formally introduced by the European Commission in 2020 as part of the European Green Deal framework. Its primary objective is to at least double the annual renovation rate of buildings by 2030 and to promote deeper renovations that deliver substantial energy savings. The initiative is closely linked to the revised Energy Performance of Buildings Directive, which sets minimum energy performance standards and requires member states to establish long-term renovation strategies through National Building Renovation Plans.
The policy framework reflects the scale of the challenge. Around 85 percent of EU buildings were constructed before 2000, and a large share were built before energy performance standards were in place. As a result, approximately 75 percent of the building stock is considered energy inefficient. The Renovation Wave aims to address this structural issue by prioritizing public buildings, residential housing, and the most inefficient segments of the stock. It also emphasizes regulatory simplification, improved access to information, and better coordination between EU-level objectives and national implementation.
Key policy elements include the alignment of renovation targets with the Fit for 55 package, the use of EU funding instruments such as the Recovery and Resilience Facility, and the integration of building renovation into broader energy system planning.
Together, these measures are designed to create a stable policy environment that encourages long-term investment while respecting the diverse conditions across member states.
Buildings represent roughly 40 percent of final energy consumption and about 36 percent of energy-related greenhouse gas emissions in the European Union. Space heating, cooling, and hot water account for the majority of this demand, much of it still reliant on fossil fuels. The Renovation Wave addresses these challenges by promoting a set of energy efficiency measures applied across the building envelope and energy systems.
Key renovation measures include:
A central concept within the initiative is the distinction between shallow and deep renovations. Shallow renovations typically deliver limited energy savings and often fail to align with long-term climate targets. Deep renovations, by contrast, can reduce energy demand by 60 percent or more, depending on building type and baseline performance. By encouraging comprehensive upgrades, the Renovation Wave seeks to lock in long-term emissions reductions while avoiding the need for repeated interventions.
From a climate perspective, widespread deep renovation is critical to achieving the EU’s 2030 emissions reduction target and its 2050 climate neutrality goal. Reduced energy demand also lowers pressure on energy supply systems, supports the integration of renewable energy, and enhances overall energy security. These impacts make building renovation a foundational element of the EU’s decarbonization strategy.
Beyond environmental outcomes, the Renovation Wave carries significant economic and social implications. The European Commission estimates that achieving renovation targets will require hundreds of billions of euros in annual investment throughout the decade. This scale of activity has the potential to stimulate economic growth, support local supply chains, and create employment in construction, engineering, and energy services.
Job creation is a particularly important dimension. Building renovation is labor intensive and largely local, which means investment tends to generate employment within regional economies. At the same time, skills shortages represent a growing challenge. The success of the Renovation Wave depends on training programs, certification schemes, and workforce development initiatives that ensure sufficient capacity to deliver high-quality renovations.
Social considerations are also central to the policy. Energy-inefficient housing contributes to energy poverty, higher household energy bills, and poor indoor comfort. By targeting the worst-performing buildings and supporting renovations for low-income households, the Renovation Wave aims to deliver a range of social and economic benefits.
The expected impacts of large-scale renovation include:
Despite its ambition, the Renovation Wave faces a number of implementation challenges. Financing remains a key barrier, particularly for private homeowners and small property owners who may lack access to upfront capital. While EU funding mechanisms play an important role, private investment must also be mobilized through innovative financial instruments, risk-sharing mechanisms, and clear regulatory signals.
Administrative complexity and regulatory fragmentation can further slow progress. Differences in building codes, permitting processes, and support schemes across member states create uneven implementation conditions. To address this, the Renovation Wave promotes one-stop-shop models that provide technical, financial, and administrative support to building owners throughout the renovation process.
Governance and monitoring are equally important. National Building Renovation Plans are intended to translate EU objectives into country-specific pathways, with clear milestones and progress tracking. Transparent data collection and performance measurement are essential to ensure accountability and to adjust policies as needed over time.
The Renovation Wave represents a long-term structural shift in how Europe approaches its building stock. By combining climate objectives with economic and social priorities, the initiative positions building renovation as a cornerstone of the EU’s energy transition. Its success will depend on effective policy alignment, sustained investment, workforce development, and strong coordination between European, national, and local actors. As the decade progresses, the Renovation Wave will serve as a critical test of whether large-scale renovation can deliver meaningful emissions reductions while improving the everyday lives of Europe’s citizens.
