How should the European Affordable Housing Plan put energy-efficient renovation at the center of tackling the housing crisis, and what renovation-rate targets would meaningfully cut bills and future energy demand?
Dominique Bossan: Europe’s housing challenge is structural: high prices, rising demand and insufficient supply. While new affordable and energy-efficient construction is essential, it is not sufficient. Around 85% of Europe’s buildings were built before 2000, and approximately 75% perform poorly in energy terms. Between 85% and 95% of today’s buildings will still be standing in 2050. Structural affordability therefore depends on upgrading the existing stock, particularly the worst-performing buildings.
Increasing the renovation rate from below 1% today to closer to 3% annually would be transformative. Beyond improving living conditions and reducing energy bills, such acceleration could lower peak energy demand by up to 49%, easing pressure on the energy system and reducing overall system costs.
Isabelle Le Callennec: The European Union aims to achieve carbon neutrality by 2050 and reduce net greenhouse gas emissions by at least 55% by 2030 compared to 1990 through the Fit for 55 package. Housing accounts for around a quarter of emissions, mainly due to heating and construction. Heating alone represents 55% of the sector’s direct emissions, which makes thermal renovation essential.
In France, 4 to 5 million homes are “energy sieves”. The National Low-Carbon Strategy targets 370,000 yearly energy renovations until 2030, and up to 900,000 annually by 2050. These targets are currently not being met due to inflation, rising material costs, changing eligibility rules for renovation subsidies, and declining purchasing power.
Through the Renovation Wave strategy, the EU set a target of renovating 35 million buildings by 2030 and at least doubling the annual rate of energy renovations. The Energy Performance of Buildings Directive sets, for residential buildings, a pathway to reduce average primary energy consumption by 16% by 2030, focusing first on the least energy-efficient buildings.
What regulatory changes at EU and national level would unlock both faster new construction and deep renovations at scale, and which simplifications or productivity levers would make Europe’s construction sector more efficient and competitive?
DB: Europe already has a strong framework in place, notably through the Energy Efficiency Directive and the Energy Performance of Buildings Directive. The decisive factor now is consistent implementation across Member States to deliver renovation at scale. A stable, long-term regulatory framework is essential to give the sector the certainty needed to invest and expand capacity.
Productivity gains will also depend on enabling innovative building practices, such as modular construction and prefabrication. These approaches shorten construction timelines, reduce waste and are particularly well suited to affordable housing and large-scale projects. Integrating them into public procurement and supporting their uptake through targeted incentives can accelerate delivery and strengthen competitiveness.
Digital tools can save time, lower costs and raise competitiveness at every stage, design, permitting and execution
IC: Housing is a Member State competence, impacted by European rules. The European Affordable Housing Plan stresses the EU should act where it adds value : innovation, investment and simplification. In the Parliament, the EPP groupe advocates an “omnibus” approach to simplify existing rules and reduce administrative burdens.
Delays and cost overruns often come from an accumulation of procedures and contradictory requirements. We should identify rules that support construction and renovation, and remove those that obstruct them. The Commission highlights a future housing simplification package to speed up permits and reduce burdens, but building permits should remain a national competence. Best practices on land-use law should be shared.
In France, the Construction Code grew from under 300,000 words in 2000 to 800,000 in 2025. The Commission has announced a Construction Services Act with a consultation open until 20 April 2026. We should also revisit the Energy Performance of Buildings Directive, whose performance levels can be difficult to achieve.
Where can digital tools most quickly relieve supply bottlenecks and costs for affordable housing, and what barriers must policymakers remove for rapid adoption?
DB: Digital tools can most quickly relieve bottlenecks where they improve accuracy and targeting.
Energy performance meters can measure a building’s actual performance and replace theoretical calculations in energy performance certificates (EPCs), improving reliability. The revised Energy Performance of Buildings Directive already allows measured performance; policymakers should ensure that measured data is recognised in EPCs in practice.
With reliable performance data, renovations can be directed to the buildings that deliver the greatest savings. Public funding and financing incentives can also be linked to verified energy savings, improving cost-effectiveness and ensuring renovation quality.
Mainstreaming performance measurement would make investment more efficient and strengthen confidence in outcomes.
IC: Digital tools can save time, lower costs and raise competitiveness at every stage, design, permitting and execution. Digital building logbooks improve traceability and confidence. Building Information Modelling creates a 3D digital twin from design to maintenance. Digital submission of permits in France has saved processing time and sped decisions.
Public funds should help de-risk private lending, making renovation projects more attractive to banks and investors
The main obstacles are not technological, but fragmented practices, lack of interoperability, rigid procurement rules, and SMEs’ difficulty accessing tools, skills and financing. Europe should help remove these barriers and support skills development.
Which mix of financing instruments should be prioritised to mobilise private capital at scale and crowd in investment?
DB: Mobilising private capital at scale is essential to close Europe’s renovation investment gap. Public funding alone will not be enough — it must be used strategically to unlock private investment.
This means combining targeted fiscal incentives, such as reduced VAT for energy-efficiency renovations, with financial products that reward performance, including green or energy-efficient mortgages. Public funds should help de-risk private lending, making renovation projects more attractive to banks and investors.
Low-interest renovation loans, supported by European guarantees, can further expand access to finance. At the same time, one-stop shops are crucial to provide households and building owners with clear, practical guidance on available funding and how to navigate the process.
The objective is simple: use public money to crowd in private capital, accelerate renovation, and make energy-efficient homes financially accessible at scale.
IC: Action is needed on financing to build, renovate and bring vacant properties back on the market. We stressed the role of the European Investment Bank and the need to review the State aid framework. The EIB will increase housing financing to €6 billion in 2026, including HousingTechEU at €400 million. The EIB and Commission are setting an affordable housing investment platform within a broader €10 billion plan to renovate or build 1.5 million homes.
InvestEU can mobilise investment with an EU budget guarantee. The revised SGEI framework allows support not only for social housing but also “affordable” housing. For households, access to credit is central, with conditions including interest rates and support for down payments. Prudential rules should not restrict banks’ capacity to lend.
Ensuring robust EPBD implementation is crucial to meet affordable housing objectives, accelerate renovation and decarbonisation, and strengthen Member States’ energy security and resilience—keeping Europe on track for climate neutrality by 2050.
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