The energy efficiency of buildings sits at the intersection of climate, fiscal and social policy, as it is essential to decarbonisation, energy security and the affordability of housing. Achieving the scale of building renovation required to meet the EU’s climate targets will demand hundreds of billions of euros in investment, far more than stretched government budgets can accommodate. Therefore, policymakers will need to use public resources strategically to maximise their economic, environmental and social impact.
This report examines how public finance can mobilise private capital to improve the energy efficiency of Europe’s buildings. The authors explore the trade-offs between policy objectives that the EU and its member states must address, in line with their renewed focus on private capital mobilisation as part of the Savings and Investment Union.
Core insights
To provide stable and investable renovation frameworks, the EU and its member states could:
- Treat energy efficiency as an investment in macroeconomic resilience.
- Embed energy efficiency in the EU’s housing, competitiveness and investment agenda.
- Mobilise private capital through blended finance and the Savings and Investment Union.
- Invest in delivery capacity.
- Establish a European benchmarking framework for renovation programmes.
- Create stable renovation frameworks tailored to national housing markets.
- Prioritise more ambitious renovation strategies to address major structural vulnerabilities.
- Explore how to integrate energy efficiency into monetary and prudential frameworks.