Why the EU has initiated the “renovation wave bid” and how the EU is helping Ukrainians to modernize their old houses

On October 15, the European Union launched a “big renovation” — a wave of renovations of residential and social infrastructure buildings throughout the EU. Its aim is to make Europeans' homes even warmer, more efficient and more environment friendly. The start of these important transformations was announced on October 13 by the President of the European Commission Ursula von der Leyen. This publication is about why Europe has decided to renovate an already good property and how it fits into the EU's plans to make the continent completely climate-neutral by 2050.

Europe's buildings are unique and diverse. They reflect the culture of the continent. At the same time many of them are old, and inefficient. More than 220 million buildings were built before 2001 and the majority of them will be in operation in 2050. They represent approximately 85% of the EU housing stock. These buildings are responsible for about 40% of total energy consumption in the EU and 36% of greenhouse gas emissions. Their renovation, therefore, is crucial to tackling energy use and emissions, to meeting the EU's 2030 emission reduction target and to becoming climate neutral by 2050.

The European Commission states that current renovation reduces energy consumption of the buildings by only 1% per year. Comprehensive renovations, that improve the energy performance of a building by at least 60%, are carried out annually only in 0.2% of the housing stock and only in one fifth of the buildings energy efficiency is significantly improved.

The houses, which are going to be renovated in the coming years, will not only reduce energy costs, they’ll improve the comfort, well-being and health of Europeans. Addressing energy poverty is also at the core of this initiative. Renovation is an opportunity for the 34 million Europeans who are unable to afford keeping their home adequately warm. The Commission has therefore provided recommendations and guidance to Member States on tackling energy poverty, in particular on how to properly identify and monitor energy poverty and promote best practices in tackling it.

In addition to environmental benefits, buildings renovation will create new jobs and stimulate investment in the EU economy. The Commission estimates that an additional 160,000 green jobs in the construction sector will be created in the EU by 2030, thanks to major repairs.

How much will this “big renovation” cost and who will pay for it?

Renovation and energy modernization of buildings in the EU is one of the sectors facing the biggest investment challenges. Achieving the Green Deal climate targets by 2030 requires about € 275 billion in additional investment each year.

The different types of market barriers are best addressed through a series of dedicated initiatives under different financial instruments. For example:

•    The Recovery and Resilience Facility will provide funding for building renovations;
•    Public guarantees to mobilize private investment will be assured under InvestEU;
•    Assistance to regional and local authorities in designing and implementing their plans for building renovations is addressed in the cohesion policy funds under REACT-EU, or through ELENA (European Local Energy Assistance) for project development assistance;
•    Targeted support to the coal regions in transition for capacity building, upskilling and reskilling initiatives in the field of energy efficiency is foreseen under the Just Transition Mechanism;
•    Horizon Europe will support innovation and development of new technologies, including a dedicated partnership on Sustainable Built Environment (Built4people).
•    Removing market barriers for the uptake of technologies and new approaches to speed up renovation will be supported under the LIFE program;
•    The Commission is revising the General Block Exemption Regulation to simplify combining EU programs and instruments, national funds and private funds for renovation projects.

What kind of houses will be renovated?

First and foremost, public and private social infrastructure, public office buildings, social housing, cultural facilities, schools, hospitals and health care facilities will be reconstructed.

How is the EU helping Ukraine to modernize old houses?

In Ukraine, there is also an energy modernization program — “Energodim”, which runs under the support of the European Union and international partners since 2019. It allows co-owners of old apartment buildings associations make their homes warm and energy efficient. The program is funded by the Energy Efficiency Fund. This is a state institution established by the Government of Ukraine. The partners and donors of the Fund are the European Union and international partners. “Energodim” partially or nearly fully - depending on the chosen format - covers the costs of renovation and reconstruction of buildings.

Grant support for energy modernization projects covers more than 70% of renovation costs, including:

- conducting an energy audit;
- development of project documentation and its examination (including inspection of the object (building);
- the reconstruction, which includes the cost of works, equipment and materials;
- technical and author's supervision services;
- certification of energy efficiency of a house after the project implementation;
- inspection of engineering systems of the building where reconstruction was carried out.

Details about the program.

Information of the European Commission and Energy Efficiency Fund.