Decarbonising the built environment is not only an environmental imperative—it is a critical strategic opportunity to boost innovation, improve living standards, and strengthen Europe’s energy security.

This white paper, prepared by Task Force 7 of the Implementation Working Group on Energy Efficiency in Buildings (IWG5), explores how industrialisation can accelerate the clean energy transition in buildings, focusing on six key thematic areas that are essential for unlocking widespread impact:

• Digitalisation and Industrial Efficiency
• Market Drivers and Financial Mechanisms
• Social Acceptance and Workforce Readiness
• Legislation, Standardisation, and Policy Alignment
• Renovation and the Circular Economy
• Systems Integration and Innovation

Major barriers are identified—including fragmented supply chains, low digital adoption, outdated regulations, and a shortage of skilled labour—and present actionable, targeted recommendations to overcome them. It proposes concrete strategies such as expanding digital construction hubs, integrating material tracking to improve circularity, and enabling new financial models. It calls for policies supporting modular prefabricated housing concepts and the integration of advanced digital tools, such as Building Information Modelling (BIM) and Artificial Intelligence (AI), among others.

The paper highlights the need to align policy instruments and funding mechanisms better. It also stresses the importance of cross-sector collaboration—with energy, manufacturing, and digital industries—to unlock synergies and scale innovation. By enabling a more standardised, digitalised, and integrated approach to building renovation, the EU can reduce costs, cut emissions, and stimulate sustainable economic growth.

The EU has at its disposal a range of policy and funding instruments that can accelerate the industrialisation of the built environment, such as under the next Multiannual Financial Framework and its recent Clean Industrial Deal Roadmap.

At the economic level, long-term, reliable funding mechanisms are vital for enabling widespread adoption of clean technologies and driving demand for industrialised renovation solutions. European public authorities, with procurement budgets exceeding €2 trillion annually, can play a major role in market transformation by adopting pre-commercial, encouraging ESCOs to deliver guaranteed performance outcomes and green procurement approaches.

The alignment of construction with energy, mobility, digital, and bioeconomy sectors offers opportunities to enhance supply chains, decarbonise heating and cooling systems, and ensure grid stability.

Lastly, the paper evaluates how industrialisation can reinforce the implementation of IWG5’s innovation targets.