Introduction

From agricultural origins and small social groups about ten thousand years ago, humans have developed a complex global socio-economic system sustained by ever-increasing energy and material flows (Figure 1). Since the Great Acceleration in the 1950s, economic growth has become unsustainable with unprecedented consumption of natural resources, immense waste generation and pollution. These trends now threaten Earth’s stability, with six of nine planetary boundaries already exceeded, leading to climate change, biodiversity loss and other global challenges [I]. Despite humanity consuming resources at a rate that would require 1.75 Earths to sustain our current lifestyle, basic human needs remain unmet for billions.

Figure 1. (a) Economic System is sustained by energy and material flows; (b) processes of natural resource consumption. II, III

Building renovation has emerged as one central strategy to address environmental and social challenges. Renovation of existing buildings — responsible for nearly 40% of EU energy use and 36% of carbon emissions — can significantly reduce emissions, conserve resources, and improve living conditions. In Estonia, Soviet-era apartment buildings are approaching the end of the designed service life and need urgent upgrading [IV]. Yet renovation practices are facing barriers and remain slow, inefficient, and costly [V] ,[VI] , delaying progress on national and EU climate goals (United Nations Environment Programme, 2024).

Digitalisation can offer a solution for streamlining renovation projects and processes. Digital strategies and tools support accelerating project timelines, minimising costly mistakes, and enabling collaboration between key stakeholders. From assessing a building’s renovation potential to planning phased upgrades for single-family homes, digital solutions streamline renovation decision-making processes [VII],. This article examines Estonia’s pioneering digital approaches, identifying key cultural, technical [VIII], and policy changes needed to harness these innovations.

European-level renovation digitalisation initiatives

The European Green Deal aims to achieve a climate-neutral EU economy by 2050. It facilitates numerous initiatives in the construction and building sectors to address the climate crisis, energy poverty, and energy security. Key renovation wave measure initiatives include the amendment of the Energy Performance of Buildings Directive (EPBD) and the Construction Products Regulation (CPR). These regulations address the energy and material flows consumed in the construction and building sectors (see Figure 2).

The revised EPBD focuses on comprehensive renovation planning, the adoption of sustainable building practices, and the integration of renewable energy systems. It introduces mandatory Minimum Energy Performance Requirements to achieve 60–90% energy savings through upgrading the 75% of existing, energy-inefficient buildings still expected to be in use by 2050. Tools such as energy performance certificates, renovation passports, smart readiness indicators, and independent control systems are being introduced to improve building performance, indoor environmental quality, and data management. Member states need to establish and continuously update decarbonisation trajectories, long-term renovation plans and establish digital building logbooks for energy performance certificates, ensuring compatibility with the European Construction Data Space [IX]. 

The revised CPR establishes a harmonised language and standards for construction products across the EU to enable their free movement. It promotes innovation and environmental stewardship by mandating safer, more sustainable materials and strengthens market surveillance to ensure compliance. The regulation introduces the Digital Product Passport (DPPs) tool, which offers machine-readable data on product performance, compliance, and environmental impact, enhancing transparency and traceability. A common EU-wide data dictionary will further standardise product information and promote interoperability. By reinforcing product safety, sustainability, and accountability, these measures contribute to the EU’s broader climate and resource-management objectives.

Figure 2. European policies and legislation addressing energy and material flows consumed in construction and building sectors.

Renovation barriers

Estonia’s building stock, mostly composed of Soviet-era apartment buildings, and approaching the end of their designed service life, needs deep renovation to improve energy performance, reduce environmental impact, and maintain building quality [IV]. The renovation rate in EU member states is still below the 3% target, needed to meet the European Green Deal’s ambitious climate goals. It is time for Great Renovation Acceleration, especially given the energy demand remains high and lagging improvements place Estonia’s long-term climate targets at risk [X].

The barriers to low renovation rates stem from the demand and supply side. On the supply side, current approaches and technologies remain tailored to individual buildings rather than building stocks and clusters, and renovations often face prebound (expected savings are not delivered) and rebound (savings are offset by increased consumption) effects due to environmental uncertainties, poor quality of work, and end-user behaviour [XI], [XII], [XIII].

On the demand side, owners lack the willingness, funds, information, or professional guidance to invest in renovations, perceiving limited benefits relative to costs and inconvenience [XIV]. The study in Estonia showed that these are further compounded by issues such as inconsistent project briefs, insufficient supporting tools, and unpredictable EU funding cycles [XV]. For example, decision-making in housing associations often remains slow, with projects taking years to launch; or mistakes in renovation planning, such as poor sequencing or ineffective solutions, can lead to costly or unsafe outcomes.

That is, one of the greatest challenges to successful renovation is the human factor. Digitalisation offers a complementary pathway to streamline renovations on the supply and demand side. Digitalisation can enable collaboration by enabling co-creation and information-sharing among professionals, apartment owners, and tenants, ultimately supporting more efficient and sustainable renovation outcomes. In the following, we focus on the demand side. For the demand side, knowledge-based expert systems, data-driven decision-support tools, and collaborative digital platforms could be developed to enable stakeholders, including non-professional building owners, technical consultants, and contractors, to easily plan and manage renovations. Such digital tools foster transparency, reduce inefficiencies, and encourage the adoption of sustainable and innovative renovation solutions.

Data-driven renovation capacity development and digitalisation in Estonia

Tallinn University of Technology has been recently engaged in multiple projects, focused on strategic capacity building, including LIFE IP Buildest, oPEN Lab, EBENTO and Data-Driven Governance Framework for Renovation Policy-Making, Decision-Making, and Management of Building Clusters. Most projects involve the development of digital solutions that improve sustainable building renovation processes and delivery.

For example, Data Management practices and pipelines, synthesising and streamlining information flows and improving data quality from existing national registries (mainly Estonian Building Registry and Estonian Landboard Registry), achieving data quality of 90%, beyond the original average of 40-50%, have been developed [XVI], [XVII]. See Figure 3 as an example of a data pipeline and workflow for studying solar exposure of buildings in a selected neighbourhood [XVIII]. 

Figure 3. An example of data workflow and pipeline for studying solar exposure of buildings in a selected neighbourhood (Iliste et al., 2024).

The RenoKratt information system, founded on these data pipelines, has been developed to support housing associations and consultants to assess renovation potential, estimate investment needs, and evaluate the impact of renovation on energy use and carbon emissions. Similarly, the Renovation Strategy Tool (RESTO) has been developed, but for regional and national planners in pinpointing renovation needs, costs, and potential energy and emissions savings at a strategic level. For single-family homes, new digital renovation passports are being created to guide phased renovations with step-by-step plans and budget estimates.

Furthermore, as part of the SOFTacademy project, Tallinn City is piloting a group renovation initiative (Figure 4). Four typical Soviet-era five-story apartment buildings will be renovated simultaneously. The pilot project aims to understand how group renovation action influences efficiency, cost-effectiveness, and quality. Digital tools are being used by TalTech researchers at the building association meetings to support and streamline renovation planning and decision-making at the renovation project inception phase. This paves the way for smoother, more effective renovation projects. Specifically, the focus has been on informing apartment owners regarding their monthly energy costs before and after renovation in both cold and warm seasons. 

Figure 4. The SOFTacademy project pilot area presented in three forms: top-left is aerial photo, bottom-left is segemented pointcloud, and right is 3D GIS view.

Last but not least, an automated indicative energy labelling system for buildings connected to a district heating network is currently being developed in Estonia. Building on the outcomes of TalTech's DigiAudit pilot project, this initiative integrates data from the national building logbook with information provided by utility operators. In Estonia’s urban areas, most apartment buildings, office spaces, and public buildings are connected to district heating networks, supported by advanced metering systems from utility providers. By combining this data with electricity and gas usage information from remotely readable meters, the system aims to enable automatic and accurate measurement of building energy consumption, streamlining energy performance assessments nationwide. The analysis will begin next year, with piloting the solution in selected municipalities. In addition, relevant legislation will be amended to have real-time energy consumption for most of Estonia's building stock by 2026.

Government and local municipalities’ role in streamlining renovation digitalisation

National governments and local municipalities play a crucial role in advancing renovation and digitalisation in the construction sector, not only by driving adoption but also by mainstreaming solutions that have proven successful in pilot projects. Public procurement policies, such as mandating the use of digital tools for major projects, can establish industry standards and accelerate the transition to digital practices. For example, the widespread adoption of Building Information Modelling (BIM) in Estonia was largely enabled by government-led initiatives that set a clear precedent for digital innovation.

Furthermore, governments can amplify the impact of successful pilot projects by incorporating their tools and methodologies into national frameworks. Streamlining processes for design permits, construction approvals, and usage certifications offers an opportunity to showcase the tangible benefits of digitalization to all stakeholders. By scaling proven solutions from pilot to policy, governments can create an ecosystem where digital tools are not only accessible but integral to improving efficiency, collaboration, and sustainability in the construction industry. This approach ensures that lessons learned and best practices from innovative projects are embedded into standard procedures, fostering a culture of continuous improvement and wider adoption of digitalisation.

A more fundamental system change is needed

Despite many policies, initiatives, and technological advancements, global carbon emissions continue to rise, and progress toward Sustainable Development Goals remains slow. Donella Meadows’ hierarchy of leverage points for complex system change highlights that an extensive transformation requires shifts at deeper, more systemic levels [XIX]. While current European renovation efforts tend to focus on material and design interventions, such as introducing digital tools and improved project management, these alone will not achieve the comprehensive decarbonisation and resilience needed. Additionally, adjusting economic and social rules, redefining system goals, and challenging deep-rooted cultural paradigms must accompany these practical improvements [XX]. Only looking beyond short-term targets and immediate outputs—toward the very nature of our socio-economic model—can we unlock the full potential of renovation efforts aligned with global sustainability objectives.

Doughnut economics, development economics, regenerative capitalism, and prosperity without growth offer alternatives to the prevailing paradigm of unlimited growth [XXI], [XXII], [XXIV]. Instead of measuring societal success solely in terms of GDP and consumption, these emphasise meeting core human needs within planetary boundaries. Applying these principles to Europe’s building renovation and energy challenges involves moving beyond merely efficiency gains and incremental improvements. It stresses viewing the built environment as part of a more general system where economic activity, social well-being, and ecological integrity support each other. By embracing such models, renovation policies can evolve from being a technical fix to catalysing systemic change, forging sustainable cities that balance human prosperity with the Earth’s finite resources.

Conclusion

The evolving building renovation efforts in Europe face systemic barriers that hinder the full realisation of climate-neutral and socially just goals. Digitalisation is seen to hold significant promise in making renovation processes more transparent, efficient, and data-driven, enabling targeted upgrades and better-informed decision-making. Estonia’s initiatives demonstrate how integrated digital solutions improve information flows, stakeholder collaboration, and planning at both building and policy levels. However, these technological advancements need to be accompanied by deeper systemic changes, including new economic models that prioritise human well-being within planetary boundaries rather than perpetual growth. By moving toward rethinking core societal values and governance frameworks, European renovation policies can be transformed into catalysts for truly sustainable urban development. Embracing such broader shifts ensures that building renovation contributes not only to reduced energy use and emissions, but also to inclusive, thriving, and resilient communities across the continent.

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