A socially-just EU renovation wave

Key Takeaways

The EU’s transition to net-zero greenhouse gas emissions by 2050 has to be a socially-just transition that includes all segments of society if it is to receive the public support it needs to succeed. This means that measures to mitigate climate change need to be inclusive and produce benefits for households with the lowest incomes, who otherwise risk being left behind. One key place to start is Europe’s homes.

This study, based on a report series by the Institute for European Energy and Climate Policy, shows that the European Green Deal could deliver a fairer society, ensuring that the poorest and most vulnerable in our communities have access to clean, affordable heating and live in energy efficient homes.

The EU’s building sector is responsible for 36% of the EU’s energy-related greenhouse gas emissions and 40% of its energy consumption. To meet its climate goals, the EU will need to cut 60% of the building sector greenhouse emissions by 2030 and fully decarbonise it by 2050. Buildings — such as hospitals, schools, homes, offices — therefore have a central place in EU’s efforts to respond to the climate emergency.

At the same time, skyrocketing gas prices are straining households, pushing the most vulnerable ones (deeper) into energy poverty. Insulating homes and switching to clean heating will slash emissions from Europe’s buildings and structurally alleviate energy poverty that is a widespread and persistent problem in the ten countries that are the focus of this study, namely Bulgaria, Greece, Hungary, Romania, Czechia, Slovakia, Poland, Italy, Portugal and Spain.

Reducing energy consumption in homes and moving away from fossil fuels for heating would also reduce Europe’s dependence on Russian gas imports and help shield citizens from volatile fossil fuel prices. Energy renovation and clean heating, hence, can be crucial in improving Europe’s energy security.

The study finds that a mutually reinforcing combination of building regulations to increase energy renovation and the uptake of clean heating in homes, combined with a smart recycling of carbon pricing revenues, is beneficial for low-income households. If well-designed, the EU Renovation Wave can cut low-income households’ energy costs by a third, reduce energy waste from badly insulated homes and increase the disposable income of low-income households in the medium to long term.