Almost half of EU residents live in multi‑family buildings, many of which were constructed before 2000 and rely on outdated heating systems. These buildings account for a significant share of energy use, with heating, cooling, and hot water representing most household consumption. Low renovation rates continue to limit progress towards climate objectives.

Recent EU legislation addresses this challenge. The revised Energy Performance of Buildings Directive (EPBD) sets renovation milestones for the worst‑performing residential stock and phases out fossil fuel boilers by 2040. Complementary provisions in the Energy Efficiency Directive (EED) introduce cost‑allocation rules for collective heating systems, while the EU Emissions Trading System for buildings (ETS2) will apply a carbon price to fossil heating from 2028.

A range of technical solutions is already in place. Options include district heating supported by large heat pumps, central or apartment‑level heat pumps, ambient loop systems, and direct electric heating in well‑insulated buildings. These approaches can replace fossil boilers and adapt to different building configurations. They also support improved air quality and enable demand‑side flexibility through thermal storage and dynamic electricity tariffs.

_{[Image without copyright (multi-family building stock, Stockholm, Sweden)]}