Energy renovation of homes: the EU directive and Spain

Spain's statistics office asked households last year about the energy efficiency of their homes, for the first time in a dedicated module of its Living Conditions Survey. The answers, published in March 2026, are the best starting point for this piece. Only 19.5% of households lived in a home that had had some efficiency work in the previous five years. Another 34.4% had done nothing, though they thought their home needed it. Among owners who had not acted, 76.2% gave the same reason: it is too expensive. Paperwork and the trouble of finding a builder barely registered, at 2.6% and 1.8%.

The need follows income and age. According to the INE, 41.0% of low-income households said their home needed work they had not done, against 25.3% of the highest-income ones. In homes built before 1960 the figure rises to 41.3%, and in those built after 2011 it falls to 16.7%.

That matters for this week's exercise, which asks how Spain could make housing 25% cheaper without displacing people or handing windfalls to landowners. Part one dealt with building more. Most people, though, will go on living in homes that already exist, and what they pay for them is the rent or the mortgage plus the bills. A cold, leaky flat is an expensive flat. Energy renovation is the part of the housing answer that works on the homes we already have.

What the directive asks

The EU rewrote its main law on building energy in 2024. The recast Energy Performance of Buildings Directive, (EU) 2024/1275, was published in May and entered into force on 28 May 2024. The general deadline for writing it into national law was 29 May 2026. The European Commission gives the reason for the effort: buildings use around 40% of the energy consumed in the EU, and around half of its gas.

For homes, the core obligation is a national trajectory. Each country must cut the average primary energy use of its residential stock by 16% by 2030 and by 20–22% by 2035, and at least 55% of that cut has to come from renovating the worst-performing buildings. Non-residential buildings get minimum energy performance standards that will force renovation of the worst 16% by 2030 and the worst 26% by 2033. Zero-emission buildings become the standard for new construction, solar becomes the norm on new buildings, and public subsidies for stand-alone fossil-fuel boilers had to end on 1 January 2025. Every country must also set up one-stop shops where owners can get technical help and advice, and write a national building renovation plan: a draft by 31 December 2025 and the final version by 31 December 2026.

The design leaves room. Brussels sets the average to hit and the share that must come from the worst homes, and each country picks its tools.

Where Spain stands

The Ministry of Housing sent Spain's draft National Building Renovation Plan to the Commission on 30 December 2025. It goes further than the directive: a 25% cut in residential energy use by 2030 and 33% by 2035, against the EU's 16% and 20%. The plan has seven policies and 57 measures, including one on energy poverty and one on regenerating whole neighbourhoods. It also claims a head start: according to the ministry, home energy use fell 10% between 2020 and 2023, with an average of 540,000 renovations a year.

The Green Building Council España went through the directive provision by provision in May 2026, a week before the deadline. It rated Spain's transposition 60% complete. The renovation plan and the revision of the Building Technical Code are the most advanced pieces, and Spain was among the few member states that filed its draft plan on time. The one-stop shops, the building database, the renovation passport, the rules on heating and cooling installations and the energy performance certificate all lag. On one-stop shops, the GBCE notes that the plan promises support but no law or system has been drafted, and the energy agency IDAE has only started consulting on a pilot. It also notes that the draft plan sets no minimum standards for homes. The GBCE says almost 85% of Spain's building stock is energy-inefficient, with renovation running at around 2% a year.

Money is shifting too. The Next Generation renovation programmes are winding down, and in February 2026 the housing minister, Isabel Rodríguez, said renovation had to continue as a permanent part of housing policy once the European funds end, with 30% of the €7 billion State Housing Plan for 2026–2030 going to residential renovation. Our piece on unspent Next Generation funds looks at the wider fund.

Making renovation pay, and making it fair

Europe has started to treat renovation as housing policy. The European Affordable Housing Plan counts renovating the existing stock as one of the forms housing supply can take, alongside new building and converting other buildings into homes. The Commission says cohesion policy already plans €10.4 billion for energy efficiency and social housing in the current budget, and that the Social Climate Fund will add money for renovation and clean heating.

That fund comes with a clock. The new carbon market for fuel used in buildings and road transport, ETS2, becomes fully operational in 2028, according to the Commission. From then on, the fuel used to heat homes carries a carbon price. The Social Climate Fund, paid for largely from ETS2 auctions, should mobilise at least €86.7 billion between 2026 and 2032 for vulnerable households and micro-enterprises, including for building efficiency. The sensible order is obvious: insulate the homes of the people least able to pay before the price arrives.

Our position combines three things. From the left, we take the priority: public grants go first to low-income households and the worst-performing homes, which is also what the directive's 55% rule points towards. From the market-liberal side, we take the discipline. A carbon price is an honest signal of what wasted heat costs, and most renovation can be repaid from the savings it creates, so the state should back long, cheap loans tied to the property and strip out the paperwork, leaving grants for those who cannot borrow.

The third idea belongs to neither camp. In a block of flats one owner cannot insulate the façade or replace the boiler alone, and the INE's numbers show cost stops owners who try to act on their own. So the unit of renovation should be the building, ideally the block, with one local office that handles the design, the permits, the grants and the loan for the whole community of owners in a single file. That is what the directive's one-stop shops could become if Spain builds them properly. For rented homes, any rent rise after the works should be capped at the energy saving the tenant actually gets, so the tenant's total cost stays flat or falls and renovation never becomes a route to pushing people out.

Done this way, renovation does its part in the 25% exercise. It cuts the bills that sit on top of housing costs, it can bring some of the empty homes in old buildings back into use, and it protects households from a carbon price that is already written into EU law.