Household energy usage has surged worldwide as a result of continued COVID-19 restrictions across Europe, as we are all spending the more of our time at home. Heating and hot water production take up the largest share (80%) of a building’s total energy consumption, making old and energy inefficient heating systems installed in our homes an even bigger financial burden on European households.
The European Commission, in its Renovation Wave Strategy adopted in October last year, estimated that only 1% of buildings in the EU undergo energy efficiency renovation per year. According to a study by ecofys, this figure could actually be closer to 4%.
Our industry estimates that there are 66 million old and inefficient appliances installed in Europe. As the European Commission estimates that 85-95% of today’s buildings will still be in use in 2050, continuing at a renovation rate of 1% will put our 2030 and 2050 climate targets in jeopardy.
The Commission has stated that the annual rate of replacement of heating equipment would have to reach around 4% to stay on track for our emissions reductions targets. But those targets have recently become more ambitious: EU leaders agreed back in December 2020 to cut greenhouse gas emissions by 55% compared to 1990 levels by 2030. The previous target was 40% reduction.
Put simply, a target modernisation rate of 4% would be too slow. The EU needs to be aiming for no less than 5-6 6% modernization rate: including specifically the replacement of old and inefficient heating installations. Without an ambitious change of pace, the European heating stock will continue to be old and inefficient for decades to come– and the EU will fall behind on its pathway to a decarbonized building sector.
According to a study conducted by Ecofys on behalf of the European Heating Industry, an increase in the annual replacement rate to 5% would mean a 40% emissions reduction by 2030 (base year 1990). But today’s target is minus 55% by 2030, therefore Europe needs to up its ambition.
There are three key areas that will drive an increase in renovation rates across Europe:
The EU’s Renovation Wave Strategy is a major opportunity to reduce the overall carbon emissions of buildings, which account for 36% of EU CO2 emissions, and ultimately bring emissions down to net-zero.