EBF RESPONSE

EBF submits recommendations to increase uptake of energy renovations of buildings

Brussels, 24 November 2025 – The European Banking Federation (EBF) has submitted its response to the European Commission’s consultation on how to increase lending for the energy renovation of buildings. While we welcome the initiative to develop a voluntary and non-binding portfolio framework to increase lending for energy renovations of buildings, it is also essential to focus on solving the demand and supply side issues that currently exist in the EU.

Key messages:

• Reorienting focus from pure financing to fixing market fundamentals: It is essential that EU-level initiatives focus on stimulating strong and sustained demand for renovation projects and address supply-side issues. Once these issues are adequately resolved, private financing will naturally increase, thereby satisfying the market demand. It is also crucial to strengthen the economic case for energy efficiency improvements in both residential and non-residential buildings.

• Address the awareness and complexity barrier:  Our observations suggest that one of the main barriers is the lack of perception or awareness among borrowers regarding the benefits of energy renovations. Therefore, it is important to develop well-coordinated EU and national campaigns to raise awareness of energy efficiency and the associated benefits, and public authorities should take a leading role in organizing and coordinating such awareness campaigns. We would also recommend simplifying the whole renovation journey by creating one-stop shops for property owners.

• Increase the risk-return profile: To improve the risk-return profile, it is essential to provide predictable subsidies, grants and public guarantees at the EU level, supported by a clear and stable regulatory framework. We would also recommend streamlining administrative procedures for accessing public financial support, particularly for SMEs and households.

• Specific solutions for the most vulnerable households living in the worst-performing buildings are needed: Targeting the worst-performing buildings is challenging for financial institutions due to the high credit risk associated with poor quality collateral and the fact that vulnerable households often live in such buildings. However, it is especially crucial to support these households to lower their energy costs and prevent energy poverty. Still, even with guarantees and grants in place, banks are expected to follow strict loan origination risk-based rules, which means that lending might still be impossible due to insufficient household repayment capacity. Therefore, we call for a deeper public-private partnership to address this issue.

• Supply-side policies: Increasing lending for energy renovations depends not only on demand-side incentives and financing but also on sufficient capacity to deliver the necessary work. If demand grows faster than supply, labour and material costs could rise, reducing the impact of public financial support. Therefore, it is essential that EU-level efforts stimulate both demand and supply in parallel to ensure long-term success.

For more information, please contact:

Jānis Priekulis, Policy Adviser – Sustainable Finance, j.priekulis@ebf.eu

Denisa Avermaete, Head of Sustainable Finance, D.Avermaete@ebf.eu

About the EBF:
The European Banking Federation is the voice of the European banking sector, bringing together national banking associations from across Europe. The EBF is committed to a thriving European economy that is underpinned by a stable, secure and inclusive financial ecosystem, and to a flourishing society where financing is available to fund the dreams of citizens, businesses and innovators everywhere.