ClimateFair Monitor reviews building and transport transition in six CEE Member States before ETS2 begins in 2027, highlighting slow refurbishment rates, funding gaps, and the need for stronger governance and social safeguards to meet EU climate targets.
The ClimateFair Monitor project assesses progress in the decarbonisation of buildings and road transport in Bulgaria, Hungary, Latvia, Poland, Romania and Slovenia. The analysis comes ahead of the extension of the EU Emissions Trading System (ETS2) to buildings and road transport in 2027 and reviews national policies, funding instruments and social safeguards, with particular emphasis on energy efficiency in residential buildings.
Across the region, renovation rates remain below the levels required to meet 2030 and 2050 climate objectives. In Hungary, fewer than 5% of approximately 4 million homes meet energy efficiency class B or higher. At the current pace, the report estimates that full renovation of the building stock would take more than 250 years. The national Energy Efficiency Home Renovation Programme 2025 is expected to reach around 15,000 households annually, requiring at least a 30% reduction in primary energy consumption per dwelling.
In Latvia, around 26,600 multi-apartment buildings require renovation to align with long-term climate targets. However, the implementation of the Recovery and Resilience Facility and EU funds for 2021–2027 would achieve only around 7% of the required renovation target. A EUR 173 million programme launched for 2021–2027 attracted strong demand, yet it is expected to contribute only about 1.3% of the overall renovation need.
Slovenia has introduced targeted support for energy-poor households through 100% non-repayable grants of up to EUR 18,000 under the ZER scheme for insulation, window replacement and heating system upgrades. While the scheme includes advisory support and coordination, its overall volume is limited, and funds are rapidly allocated. Energy poverty remains structurally linked to income disparities, with 13.2% of households below the at-risk-of-poverty threshold in 2024 and higher exposure among tenants.
In several countries, fossil fuel price interventions and general subsidies continue to influence energy consumption patterns. Hungary’s residential tariff cap cost 1.8% of GDP in 2023, while partial price adjustments contributed to a 20% reduction in gas consumption between 2021 and 2023. At the same time, the report identifies continued reliance on biomass and ageing building stock across the region as factors affecting both emissions and social outcomes.
Institutional frameworks vary. Romania’s long-term strategy strategy ‘Neutral Romania 2050’, provides a macroeconomic pathway for emission reductions, although a national climate law has not yet been adopted. In Latvia and Slovenia, ministries dedicated to climate and energy have expanded governance structures, yet audit findings and policy reviews indicate that monitoring, coordination and financing mechanisms require further alignment with stated objectives.
The report concludes that while Central and Eastern European Member States have established renovation programmes, grant schemes and advisory services, the scale and speed of building energy efficiency improvements remain below what is required ahead of ETS2 implementation in 2027, indicating a need for increased investment, targeted social measures and strengthened governance to close the implementation gap.
