The EU is making progress in reducing emissions, but the pace remains insufficient to meet its climate targets. The building stock continues to pose a challenge: modernisation is slow, electrification is lagging, and materials are driving up embedded emissions.
The latest ‘Climate Action Progress Report 2025’ confirms that the European Union continues to reduce its net emissions, but the current pace is not sufficient to meet the climate neutrality targets for 2050. The report highlights significant progress, such as the consolidation of the emissions trading system, the expansion of renewable energy, and the electrification of transport. However, it warns that investment in clean technologies remains below the required level and that sectors such as buildings and heavy industry continue to be critical points. According to the document, Europe’s competitiveness will depend on accelerating the transition, strengthening resilience, and ensuring that policies are implemented effectively.
The chapter dedicated to buildings reveals a complex reality. Operational emissions are not falling at the required rate, and the renovation of the building stock is progressing slowly. Barely one per cent of buildings are renovated each year, and deep retrofits represent only a minimal fraction. Added to this is insufficient electrification: although heat pumps grew significantly between 2016 and 2022, sales have declined over the past two years, slowing the replacement of fossil fuel systems. Residential heating demand has fallen slightly, but not enough to meet climate targets. In addition, the use of materials such as cement and brick has increased by around eighteen per cent in five years, which raises the embedded emissions in construction.
To reverse this trend, the European Union has strengthened the regulatory framework with the revision of the Energy Performance of Buildings Directive, which introduces minimum performance standards and stipulates that all new buildings must be zero-emission from 2030. The new emissions trading system (ETS2), scheduled for 2027, will create market incentives for renewable technologies in the sector, and part of the revenues will be allocated to protecting vulnerable households through the Social Climate Fund.
The report stresses the need to improve planning with national databases on energy efficiency and heating equipment, expand public financing, and reduce electricity costs to close the economic gap in renovations and electrification. It also emphasises the importance of local heating and cooling plans and the adoption of fossil-free standards for new constructions.
