The European Union's substantial investment of tens of billions of euros into making homes more energy-efficient is largely falling short of its intended impact, with much of the funding delivering only limited results. This stark assessment comes from a new report published on July 7 by the European Court of Auditors (ECA).
The funding primarily flows through the Recovery and Resilience Facility (RRF), a massive recovery plan rolled out since the Covid-19 crisis to support member states' economies. Under the RRF rules, at least 37 percent of the funding is earmarked for climate and energy objectives, with energy-efficient building renovations being a key component of this effort.
However, the ECA report indicates that RRF money is not being utilized in the most effective manner, particularly concerning building renovations. A primary issue identified is that member states predominantly fund simpler renovation projects, such as replacing windows, installing solar panels, or upgrading heating systems.
In contrast, comprehensive deep renovations—like fully insulating a building, which can slash energy consumption by over 60 percent—receive significantly less support.
A critical flaw highlighted by the auditors is that projects receiving EU recovery funding are almost never selected based on their actual expected energy savings. Auditors visiting several countries found no system in place to rank projects according to their potential energy savings.
Out of 111 renovation schemes examined by the Court, only three included a specific energy-saving target. Instead, governments typically measure the number of homes renovated or the square meters refurbished, with very few actually tracking the energy savings achieved.
The report also criticizes the high cost of some renovation programs. Italy's Superbonus scheme serves as a striking example, reimbursing not just 100 percent of costs, but 110 percent, thanks to additional Italian state support. This generous approach led to a surge in demand, but the European Court of Auditors deems it ultimately counterproductive.
The ECA argues that, first, because these small-scale renovations can actually make deeper renovations more difficult and more expensive a few years later. Furthermore, they are insufficient to achieve the long-term decarbonization of Europe's building stock.
These findings emerge at a crucial juncture, as the European Commission plans to continue funding energy-efficient building renovations in the EU's next long-term budget, covering the period from 2028 to 2034.
Residential buildings currently account for approximately a quarter of Europe's total energy consumption, yet nearly three-quarters of European buildings remain poorly insulated.
Without a massive wave of effective building renovations, the European Union faces significant challenges in meeting its climate targets. To succeed, the EU will need to target funding more effectively, rigorously measure the actual energy savings delivered by projects, and ensure every euro invested generates a tangible impact.
Production: By Europod, in co-production with Sphera Network.
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