Europe’s building sector off track: social, economic and climate targets at risk

The third edition of the EU Buildings Climate Tracker published this week by the Buildings Performance Institute Europe (BPIE) confirms that the EU is missing opportunities to increase energy security and reduce heating costs. It is definitely not on track to achieve its climate targets. Progress on decarbonisation has stalled, with the gap more than doubling since 2016. This inaction jeopardises not only the EU’s 2030 and 2050 climate targets but also Europe’s energy security, public health, and economic competitiveness.

The slow pace of building upgrades not only undermines climate goals but exacerbates social inequalities and health risks. With 15.5% of EU residents living in inadequate housing, the health impacts—ranging from respiratory illnesses to mental health issues—impose growing costs on healthcare systems and communities. The insufficient reduction of energy consumption and the low investments in energy efficiency means that Europe continues to import much of its heating energy needs. This dependence undermines the EU’s energy security and weakens its resilience against negative geopolitical developments. It also undermines innovation incentives for Europe’s energy efficiency industry.

Key findings of the EU Buildings Climate Tracker:

• CO₂ emissions from building energy use have decreased by just 14.7% since 2015—far below the 27.9% reduction required by 2022.
• Final energy consumption in buildings has dropped by only 2.8% since 2015, less than half the required pace to meet climate targets.
• The share of renewable energy in buildings has only increased by 6.3 percentage points since 2015, significantly below the required 18 percentage point increase.
• Renovation investments reached only 60.6% of the required levels between 2015 and 2022.

BPIE calls for bold action from both EU institutions and national governments to reverse this trajectory, arguing that the revised Energy Performance of Buildings Directive (EPBD) provides a clear framework to accelerate progress, and governments must seize the moment.

“Slow decarbonisation of buildings isn’t just a climate problem, it’s a people problem,” said Oliver Rapf, Executive Director of BPIE. “Efficient, healthy buildings are vital to shielding people from skyrocketing energy bills while spurring innovation in the construction sector.”

“Increasing renovation rates and scaling up renewable heating systems represent a generational opportunity to reshape Europe’s economy, boost resilience, and provide safer, healthier homes for millions,” says Rapf. “This is Europe’s chance to replicate the success of landmark projects like the Single Market – turning today’s challenges into a foundation for lasting prosperity. We cannot afford to let this slip away.”

BPIE says that the European Commission’s next mandate must recognise building decarbonisation as a strategic pillar of Europe’s prosperity. Embedding this transformation within the EU’s overarching prosperity strategy, such as initiatives like the EU Clean Industrial Deal and the Affordable Housing Plan, is essential for achieving sustainable growth, enhancing social equity, and safeguarding energy sovereignty.

Truth is, Europe can do much better: progress is visible, but far too slow. There is no time to waste.