Energy Trap
Investigating the renovations failure
More and more European households are struggling with increasing energy bills. While war in Ukraine is the main trigger of such high energy costs, the underlying structural problem making Europe so vulnerable to energy prices is home grown: The European building stock is old and energy inefficient.
Renovating buildings could – theoretically – solve all these problems at once: Less people would live in damp or cold homes, the energy costs for heating would decrease, as would the climate impact of the building sector. At the same time, this would decrease the geopolitical vulnerability of Europe, as the war in Ukraine proved our dependency on energy from autocratic regimes. So far the theory.
In reality, especially the energy for tenants and poorer home owners are increasing drastically – and add up on top of the increasing rents. Renovations simply do not pay off enough for landlords. And if they are done, the costs are often paid by tenants having to pay for the renovations with much higher rents or else being subject to evictions.
Over the past six months, we have been working with media outlets in Germany, the Czech Republic, Italy, Belgium, Austria, Poland, France and Sweden to find out why renovations are not happening, and what the costs to tenants and the climate are.
Too hot to rent, too cold to heat
The latest findings on EU level from 2021 by ODYSSEE-MURE project show that around 50 million households in the EU (11% of total) are in energy poverty. The figures have most likely risen even more since then, due to the energy crisis.
The costs of housing in general have been increasing all over Europe. Since 2015 the consumer prices for housing have increased by 37 per cent across the EU. Yet, in some countries housing costs rose by 100 per cent. Since housing costs make up for around a quarter of an average household’s expenses, about the same proportion as food, the increases hit many families significantly.
Strikingly, in most EU countries, energy prices increased more steeply than rents – and far more than the overall inflation rate. Hence, even though the rents are still the major part of overall housing costs, the surging energy costs are increasingly adding significantly to the basic costs of living.
One way how to tackle the increasing energy bills, is to increase the energy efficiency of our flats. As the European building stock is old and energy inefficient.
Data collected by the private research centre Eurac as part of the European-funded project in 2020 reveals that most residential buildings in Europe were built between 1945-1969. This period “saw a surge in building construction due to post-war reconstruction and economic growth, aided by the Marshall Plan”, according to the study published by Eurac Research. These buildings are in urgent need of renovation. Especially because it is estimated that 85-95% of all existing buildings will still be standing in 2050. In capital cities, old buildings are often even more current.
The climate is another victim. According to European Environment Agency, more than 30 per cent of the EU’s carbon footprint comes from buildings, making it the sector with the highest environmental impact.
More than a half of the CO2 emissions come from the generation of the electricity and heat that buildings consume, as a quarter comes from direct CO2 emissions produced on-site. The impact of construction materials and processes, often referred to as “embodied carbon,” is also significant, as it is estimated to account for 5-12% of total EU GHG emissions. CO2 emissions of cement, the most CO2 emitting construction material, accounts for 4% in this balance sheet. Buildings are also responsible for around one third of all materials consumed annually in the EU.
The ageing building stock requires renovations, but the overall renovation rate in Europe is only around 1 percent annually based on estimates in 2016, as it is acknowledged in main EU legislation documents on the topic. Looking at the category of so-called “deep renovations”, which increase energy efficiency, one gets an even more dire picture: the rate is only 0,2 percent according to the EU’s Renovation Wave Strategy. Hence, the issue is not only the amount of renovated buildings, but also the quality of renovation itself.
Despite the high costs of poor living conditions and climate harm, there is still too little being spent on renovations. As the example of Germany shows, we are investing into renovations as little as we did ten years ago.
As the European Union bluntly summarizes in its main legislation on the topic of renovations, the “European Building Performance Directive” passed in 2024: “At the current pace, the decarbonisation of the building sector would require centuries.” Project Energy Trap explores why have renovations been failing so far and what is the impact on people and climate.
