The study examines the real feasibility of converting a dense cluster of residential buildings in Tartu, Estonia, into a positive energy neighbourhood, in line with European climate neutrality objectives. Based on a life-cycle assessment applied to 22 housing blocks in a cold climate, the research compares four renovation scenarios, ranging from the current situation to a deep intervention oriented towards positive energy performance. The results show that improving energy efficiency significantly reduces operational consumption, particularly that associated with heating, which remains the main source of emissions in this context. However, achieving a net-zero or positive balance requires the integration of on-site renewables and compensation measures that entail high land consumption, which is difficult to reconcile with compact urban environments.

The analysis calls into question renovation policies that settle for intermediate standards, as these do not reduce total emissions over the buildings’ life cycle if they fail to incorporate renewable energy generation. It also warns that focusing decarbonisation solely on the net balance may conceal relevant impacts, such as the extensive use of land for biomass or nature-based compensation measures. Overall, the study underlines the need for integrated approaches that combine deep renovation, urban planning and territorial criteria in order to move towards genuinely climate-neutral neighbourhoods.