The Renovation Requirements in the EU Building Directive can do more than anything else to address energy poverty, but without specific policies to assist the most vulnerable individuals and households, they could suffer greatly, according to Euractiv.

Why is renovation necessary?

Over 100 million people - nearly a quarter of the EU population - are living in energy poverty, according to the EU-funded Odysee-Mure project.

Over three-quarters of the EU building stock is inefficient. And, predictably, people with lower incomes tend to live in the least efficient homes.

That is why renovation is a necessity - and why the Building Directive needs to meet the requirements for proper renovation.

Consider that only about one-third of the approximately €600 billion spent on energy subsidies in the past 18 months actually went to the poorest households.

Consider that most of this money was not intended to reduce energy demand but to provide emergency support, largely subsidizing fossil fuel consumption.

Consider also that these subsidies are coming to an end as governments run out of funds and that the poorest households will immediately return to where they started, while having to cope with new obligations and potential additional price increases.

This is how you get it wrong. And this is the kind of situation that can lead to and does lead to political instability, fuels populism, topples governments, and undermines integration in the EU.

An ambitious directive

But it is possible to get it right. The EU needs an ambitious building directive, undoubtedly - the status quo, with nearly a quarter of the EU population in energy poverty, is unacceptable.

But to ensure that the poorest and most vulnerable have a place in a just transition, renovation requirements must go hand in hand with dedicated and well-managed funding for Europe's poorest citizens.

Thanks to the recovery fund and other initiatives, there is much more money available for renovation than there was a few years ago.

But all too often, everyone has equal access to financial support, which, in practice, means that wealthier, better-informed people - those who need money the least - receive the lion's share, and the most vulnerable are left out. This is a sure way to undermine support for EU legislation.

The recently approved Social Climate Fund, intended to start operating in 2026, should cushion the blow for vulnerable households, but its impact on buildings is expected to be very limited, given that the Fund is also shared with the transport sector and direct income support.

A flawed design

Moreover, its design itself remains deeply flawed as it is anchored in the expansion of the Emissions Trading Scheme to buildings and transport, which will have a disproportionate impact on low-income groups.

That is why it is so important to allocate funds for the poorest households. This is not charity; it is financial and social common sense.

When you consider the reduced healthcare costs, improved performance at school and work, cleaner air, and increased disposable income, you see that the monetized benefits of upgrading among low to modest-income families can be up to 2.8 times greater compared to upgrading among higher-income families.

Of course, not all investments in building renovation have to come from the public budget - private financing can and will be attracted by the clear regulatory framework that renovation requirements will provide in the Building Directive. But this type of financing alone cannot reach low-income households.

And, of course, financing is only part of the solution - proactive advice is also key to helping people navigate the renovation process.

This is called technical assistance. The Commission and the EIB have much to offer, but they are not adequately promoted at the political level.

Ministries, regions, and cities often do not know they exist, do not know how to access them, or are not sufficiently motivated to put together applications for assistance.

A social component

This needs to change, and it needs to include a social component as well, providing assistance to ensure the inclusion of households whose homes are in most need of renovation.

A great deal of trust is at stake in the Building Directive. Repeating over and over again that no one will be left behind by the EU Green Deal will not diminish it - action is needed.

The Building Directive can do more than any other law to improve the well-being and living standards of millions of EU citizens.

But it will fail if it is not designed and implemented with the interests of the poorest in Europe at its core.