Decarbonising the EU’s building stock

The European Climate Law sets a legally binding target of climate neutrality by 2050, with an interim goal of reducing greenhouse gas emissions by at least 55% by 2030. Given that buildings account for around 36% of EU emissions, decarbonising the building stock is a cornerstone of this transition. A successful approach requires a stable and coordinated policy framework.

EU Emissions Trading System (ETS & ETS2)

The EU Emissions Trading System (ETS) remains the backbone of the EU’s carbon pricing framework. In 2027, a dedicated system (ETS2) for buildings and road transport is planned to be fully operational. ETS2 will place a carbon price on heating fuels. Part of the revenues generated will help finance the Social Climate Fund. The success of ETS2 depends on robust national frameworks to avoid placing undue burdens on vulnerable households.

Social Climate Fund

To ensure a fair transition, the Social Climate Fund (planned for 2026–2032) will channel at least €86.7 billion to help households, micro-enterprises, and transport users cope with rising costs linked to ETS2. The Fund will co-finance investments in renovation, clean heating systems, and renewable integration, ensuring that decarbonisation is both socially inclusive and economically viable.

Energy Performance of Buildings Directive: Towards Zero-Emission Buildings

The revised EPBD places the EU on a clear path towards Zero-Emission Buildings (ZEB). From 2030, all new buildings will have to meet ZEB standards, while buildings owned by public bodies must comply from 2028. This means they must deliver very high energy performance, cover their low remaining demand with renewables, and emit no on-site carbon from fossil fuels.

Beyond operational emissions, the EPBD also introduces measures to address embodied carbon. Large new buildings will be required to disclose their life-cycle global warming potential from 2028, with the requirement extended to all new buildings by 2030.

Renewable Energy Directive

The RED contains sub-targets for the decarbonisation of buildings, requiring 49% of renewables in heating and cooling and in buildings. It also contains an indicative target regarding the share of renewables in the heating and cooling sector (1.3% increase per year).

Energy Efficiency Directive

The EED mandates the adoption of Heating and Cooling Plans by large and mid-size cities and defines efficient district heating and cooling.