Caroline Simpson

As discussions on the European Union’s Next Multiannual Financial Framework move forward, Renovate Europe is publishing its position paper on the MFF.

Shaping the EU budget for 2028–2034 is a critical opportunity to deliver on competitiveness, affordability, resilience and energy security, and buildings must be at the heart of this effort.

Why? Because energy renovation is one of the smartest investments Europe can make:

➢ Buildings account for ~40% of EU energy use and 36% of emissions

➢ Every €1 invested in energy efficiency can generate up to €12 in energy savings

➢ Renovation reduces energy bills, strengthens energy independence, and improves people’s quality of life

Yet the investment gap remains significant, and the next MFF must help bridge it.

In this context, Renovate Europe calls for:

➢ A dedicated building renovation priority in National and Regional Partnership Plans

➢ An EU Renovation Loan Facility under the European Competitiveness Fund/InvestEU architecture

➢ A performance and tracking methodology that captures real energy savings, social impact and delivery quality.

Beyond funding, the next EU budget must also support implementation on the ground, from technical assistance to local delivery capacity, to turn ambition into real projects.

Time is Running for the Implementation of the Revised EPBD

The deadline for implementing the revised Energy Performance of Buildings Directive (EPBD) is approaching. By 29 May 2026, EU Member States must transpose the directive into national law.

A central element of this process is the preparation and submission of National Building Renovation Plans (NBRPs), which will set out how each country intends to improve the energy performance of its building stock.

So far, eight Member States and the Walloon Region have submitted their plans. Most countries have yet to do so.

With the support of its National Partners, Renovate Europe is reaching out directly to the ministers responsible for NBRPs in Member States that have not yet submitted their plans. The message is clear: a strong and timely National Building Renovation Plan is not only a legal obligation, but also a significant economic opportunity.

Well-designed renovation strategies can:

• Support economic growth

• Create local employment

• Strengthen social stability

• Increase the availability of quality housing

• Improve investor confidence

Building renovation remains one of the most effective ways to deliver economic, social and environmental benefits simultaneously.

As the deadline approaches, coordinated action from both European and national decision-makers will be essential to translate EU legislation into ambitious, practical and country-specific national plans.

Read our letter on National Building Renovation Plans to learn more.

Dive into Renovate Europe’s 2025 Activity Report to discover highlights from our C4E Forum in Croatia, Renovate Europe Day in Denmark, our activities, publications, campaigns, and engagement with national and European stakeholders.

A big thank you to all our partners and everyone who contributed to the success of Renovate Europe!

Renovating Non-Residential Buildings: A Cornerstone for a Competitive, Affordable and Safer EU

Article contribution by Christina von Westernhagen, Vice President of Efficient Buildings Europe and Senior Director at Johnson Controls International, proud sponsor of Renovate Europe Day 2025

Lowering energy costs in the EU enhances the international competitiveness of European industry, by reducing operating expenses and helping firms compete with producers in countries that benefit from structurally lower energy prices. Reduced energy consumption also stabilises inflation, making the European economy more resilient. Energy is a key input in manufacturing and heating and cooling of buildings. When companies spend less on energy, their production costs drop. Lower costs reduce the need to raise selling prices which slows cost/push inflation. The European Central Bank notes that input cost pressures, especially from gas, have a delayed effect on consumer prices and as those costs moderate, inflation can be tamed.

One of the most overlooked levers for improving affordability of energy, enhancing energy security, and boosting European competitiveness lies in our built environment. Buildings consume about 40% of Europe’s energy. By reducing the energy required for heating, cooling, lighting and daily operations, energy-efficient buildings lower carbon emissions and resource use. This makes them a foundational part of any sustainability strategy. In particular, the renovation of non-residential buildings – offices, schools, hospitals, data centers, factories, and commercial spaces – offers a powerful opportunity to reduce operational costs, cut energy dependency, and unlock new business value. Renovation and efficiency of buildings can also boost high value manufacturing and skilled jobs in heat pumps, insultation materials, smart windows, sensors, controls and digital energy management, renewable integration in buildings, and construction and engineering services.

Energy Efficiency renovations can lead to compelling cost savings: The New Aalborg University Hospital in Denmark for instance saved 80% on electricity compared to it’s previous systems and 500- 700 tonnes of C02 by putting industrial scale heat pumps to work. Buildings in Europe currently account for 36% of greenhouse-gas (GHG) emissions. The hospitality complex ‘The Wings’ in Brussels, Belgium achieved significant energy optimization through upgrades in building automation controls and became the first building in Europe to be tripe-certified as BREEAM EXCELLENT, WELL GOLD and DGNB GOLD.

These buildings represent over 25% of the EU’s total floor space and consume a disproportionately high share of energy, often relying on outdated systems. Renovating them is not just about sustainability, it’s smart economics. Recognizing this, the EU’s revised Energy Performance of Buildings Directive (EPBD) now requires renovating the worst-performing 26% of non-residential buildings by 2033, a milestone that can drive investment, innovation, and job creation across sectors.

Why Focus on Non-Residential Renovation?
These buildings underpin important services. Schools, hospitals, public offices, and transport hubs are the backbone of our daily lives. Making them more energy-efficient improves comfort, as well as financial efficiency. A public hospital, for example, that reduces its heating bill can reinvest those savings into care. An energy efficient school gains control over its long-term energy costs, freeing up budgets for education.

For private companies, building upgrades translate directly into competitive advantage. Energy-efficient commercial spaces lower operating expenses, improve employee productivity, and determine ESG ratings and taxonomy rates. They can also increase investor confidence, and tenant demand. With sustainability now linked to reputation and regulation alike, retrofitting is becoming a strategic imperative, not a discretionary spend.

The technologies needed to deliver this are already mature and available on the market today: heat pumps, mechanical ventilation, building automation and control systems, digital and AI-driven solutions, thermal insulation, lighting, motors, excess heat recovery systems, submetering, and more. Manufacturing and installation of these technologies is driving growth in the EU, with 6.5m jobs having been created to date throughout the building renovation supply chain.

Reversing the trend
Despite the clear business case, several barriers slow progress. From 2016 to 2020, 1 percent of EU buildings were renovated annually, with the rate for non-residential buildings at only 0.6 percent.[1]

Stop-and-go policies and a piecemeal approach to national legislation prevent the sector from scaling up. Financing remains a critical bottleneck, particularly for SMEs and public institutions with constrained budgets. On top of this, fragmented and administratively burdensome permitting systems as well as labour shortages of expert technicians and installers can lead to delays and cost overruns.

However, solutions do exist to translate European targets into tangible projects. Our industry has five key recommendations for the European Commission and Member States, to kick-start the Renovation Wave:

• Insist on the “Efficiency First” principle in public procurements to deliver state of the art public services while substantially cutting taxpayer costs and ensuring they are covered by the State Aid, Net Zero Industry Act and Innovation Fund.
• Delivering a stable, long-term policy framework e.g. focus on the timely and complete implementation of the Energy Performance of Buildings Directive, the Energy Efficiency Directive, starting with ambitious National Building Renovation Plans at the end of 2025.
• Removing unrelated taxes on electricity bills that inflate electricity costs and can represent half and more of the bill. Rebalancing energy taxation to favour energy efficiency and electrification, while protecting energy-intensive industries. This means delivering a strong Electrification Action Plan, implementing the ETS2 and finding a compromise on the Energy Taxation Directive recast.
• Simplifying access to European funding and attracting private financing. In practice, this means complementing the traditional grant-based approach with a combination of loan guarantees, subsidised interest rates, and capital rebates, as well as updating the EU Taxonomy. We also encourage leveraging private sector financing through leasing and performance contracting approaches that require no upfront cost and enable the operational efficiency savings to pay for the technology and upgrade.
• Addressing the skills gap and increasing the workforce e.g. mapping existing skills and anticipating future needs and shortages in the sector as well as ringfencing funds for skills and training.

A Unique Moment for Bold Action
Renovating non-residential buildings reduces vulnerability to shortage of energy supply, strengthens public infrastructure, and positions European businesses to thrive in a greener, more competitive global economy.

The EPBD recast offers the right legislative push, now we need delivery at scale and speed at national implementation level. Some countries are leading the way. France, the Netherlands and regions such as Flanders, have specific schemes setting energy performance standards for non-residential buildings.

This is Europe’s moment to lead by example – in driving a modern, efficient, and resilient economy from the ground up. Renovating the spaces where we work, learn, heal, and innovate is not just about cutting emissions – it’s about investing in our shared prosperity and long-term strength. It is key for Europe’s competitiveness in the long run.

[1] Energy Performance of Buildings Directive