Europe faces a growing need for investment to modernize its building stock in line with energy efficiency requirements. According to the European Environment Agency, around 75% of buildings in the European Union do not meet current energy performance standards. The real estate sector accounts for 36% of total energy consumption and about 40% of CO₂ emissions. 

A report by the European Investment Bank (EIB) estimates that achieving the EU’s carbon reduction and energy efficiency goals will require an annual increase in investment of €275 billion through 2030. The total investment need is assessed at €1.8 trillion over the decade. 

The publication highlights the expansion of the “green loan” market — loans aimed at financing building modernization projects. The total volume of such lending in 2024 reached €60 billion, an 18% increase compared with 2023. However, the lack of unified standards and classification criteria across the EU has resulted in differing national approaches to project qualification. 

The largest government programs supporting energy efficiency investment are concentrated in Germany, France, and the Netherlands, where much of the financing comes from subsidies and low-interest public loan programs. 

The transition to environmentally sustainable standards is viewed as a necessary condition for achieving the EU’s climate goals. Implementing these programs requires coordination between private investors and public institutions, as well as the development of stable, long-term financing mechanisms. 

Comment from M24 SunShine Investment Division:

The Financial Times data underscores the structural gap between the current condition of Europe’s building stock and the EU’s energy efficiency objectives. The sector’s investment need — €275 billion annually — highlights the systemic scale of the challenge. The lack of harmonized criteria for “green loans” creates regulatory inconsistencies between member states, complicating the alignment of private and public financing mechanisms. Addressing this issue will require stronger coordination between EU and national policies, as well as the expansion of sustainable finance instruments.