Accelerating Building Efficiency: Why Adopting the IEA Proposal is Imperative
A comprehensive look at the IEA’s policy blueprint for radically improving building energy efficiency worldwide by 2030.
Buildings account for a major portion of the world’s energy demand and emissions, making them central to any strategy for combating climate change. The International Energy Agency (IEA) has put forward a policy framework designed to transform buildings from major polluters into a cornerstone of the clean energy transition. This article examines why this proposal is needed, the core elements of the IEA’s approach, and what it will take to move from recommendations to real-world action that delivers profound change.
The Urgent Context: Buildings and Their Global Impact
The built environment—residential, commercial, and public buildings—represents approximately 30% of global final energy consumption and more than half of all electricity usage worldwide. Without rapid improvements to building energy performance, the world will fall short of its climate and sustainable development goals. Fossil fuel use in building heating and cooling continues to lock in high emissions, while outdated infrastructure increases vulnerability to price shocks and extreme weather.
- Every year, the demand for energy in buildings steadily rises as urbanization and wealth grow.
- Existing buildings often perform poorly compared to the best available technology, creating a massive opportunity for improvement.
- According to the IEA, meeting net-zero targets requires deep retrofits and high efficiency for both new and existing buildings, alongside major electrification and the integration of renewables.
The IEA’s 2025 Energy Efficiency Policy Package for Buildings
In response, the IEA has developed a comprehensive policy ‘package’—a set of strategies that must be deployed simultaneously to transform building performance quickly and cost-effectively. The package is built on three core pillars:
- Regulation: Robust energy codes and performance standards for new and existing buildings.
- Incentives: Financial and market instruments to drive investment in efficiency measures and technologies.
- Information: Transparency tools and education that empower consumers and the building industry to make better choices.
This integrated approach is essential, as relying on one instrument alone has proven insufficient to drive the required pace and scale of change. Let’s examine each pillar in turn.
Regulation: Raising the Bar for Building Performance
Policy-driven regulations are the backbone of the IEA’s proposal. The cornerstone is the building energy code—a set of standards that dictate minimum requirements for energy efficiency in construction, renovation, and building operation.
- Why Energy Codes Matter: They ensure all new build and major renovations are constructed to high efficiency standards, and they can mandate upgrades for existing stock.
- Performance-based vs. Prescriptive: Codes can be performance-based (setting targets for overall building efficiency) or prescriptive (requiring specific technologies or insulation levels).
- Breadth of Coverage: Today, despite progress, only around 40% of new buildings globally are covered by meaningful codes. The IEA’s proposal aims to double this share by 2030 with regular updates and increasing stringency.
- Beyond Efficiency: The latest generation of codes include requirements for onsite renewables, embodied carbon limits, and smart-ready capabilities such as demand response.
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How Codes Are Developed and Implemented
Implementing effective building energy codes involves:
- Strategic assessment of the current building stock and local energy use patterns.
- Task force formation, bringing together government, industry, and experts to draft rules aligned with international best practices.
- Stakeholder consultation to ensure codes are workable and widely supported.
- Legislative adoption and establishment of clear compliance and enforcement mechanisms.
- Continuous updates as technology improves and climate targets tighten.
- Workforce training for architects, builders, and inspectors to ensure effective roll-out.
When done well, codes can rapidly shift the entire building sector toward best practices, unlocking huge energy and emissions savings while also improving occupant comfort and health.
Incentives: Making Efficiency Affordable and Attractive
To accelerate upgrades and adoption of cutting-edge technologies, the IEA stresses the need for a blend of targeted incentives:
- Retrofit Grants and Subsidies: Direct financial support to lower the upfront cost of deep renovations, new heating/cooling systems, or insulation.
- Green Mortgages and Preferential Loans: Banks and financiers offer favorable terms for projects that exceed minimum performance thresholds, unlocking private investment.
- Tax Rebates and Credits: Governments reduce the effective cost of efficient upgrades and certified building projects.
- Accelerated Permitting: Fast-tracked administrative procedures for high-performing new builds or ambitious retrofits.
- Awards and Recognition: Publicity and honors for standout projects help set examples and drive up ambitions across the sector.
These measures not only ease adoption but also help target support to low-income households and regions where market-driven action may lag without policy stimulus.
Information: Empowering Consumers and Professionals
Information and education tools form the third pillar, ensuring that all stakeholders—from homeowners to major developers—can understand, value, and act on energy performance data.
- Energy Performance Certificates (EPCs): Required at point of sale or rent, these labels provide clear, comparable information about a building’s efficiency and environmental footprint.
- Disclosure Programs: Mandating large buildings to report energy use, driving transparency and market competition.
- One-Stop-Shops and Renovation Passports: Integrated digital services provide homeowners and professionals with tailored advice, access to incentives, and step-by-step roadmaps to deep retrofit.
- Public Awareness Campaigns: Broad communication strategies encourage low-cost, everyday actions, such as adjusting thermostats or using smart devices to shift demand.
- Professional Training: Widespread education and upskilling for architects, builders, inspectors, and other actors in the building value chain.
Technology and Innovation: Smart, Interactive, and Flexible Buildings
Modern efficiency policy goes beyond insulation and LED lighting. The IEA emphasizes digital innovation and integration with the grid. Major opportunities include:
- Smart Interactive Technologies: These allow buildings to dynamically optimize energy use—responding to signals from utility grids, integrating renewables, and ramping down demand during supply shortages.
- Thermal and Electrical Storage: Hot water tanks, batteries, and electric vehicles can be coordinated to flatten peaks and provide flexibility.
- Replacing Fossil Fuel Boilers with High-Efficiency Heat Pumps: This alone can cut energy use for heating by up to 75% versus traditional systems.
By leveraging existing assets and digital controls, buildings can become flexible loads, which help balance variable renewable energy and improve system-wide efficiency. The IEA calls for a tenfold increase in demand response capacity from buildings by 2030.
The Path Forward: Doubling Retrofit Rates and Policy Coverage by 2030
The IEA’s near-term targets are clear:
- Double the global annual retrofit rate by 2030. This means vastly increasing the number of existing buildings upgraded for efficiency each year.
- Double energy code coverage, so the majority of new builds globally are held to rigorous standards.
If all proposed measures are enforced at scale—including deep retrofits, creditable electrification, and integration of renewables—the IEA projects sector-wide CO2 emissions could shrink by more than 95% by 2050.
Benefits Beyond Carbon: Health, Comfort, & Resilience
Buildings that meet advanced efficiency standards do more than shrink carbon footprints:
- Better Indoor Air Quality and Health: Tight, well-ventilated buildings cut exposure to airborne pollutants and toxins.
- Improved Comfort and Productivity: Optimized insulation, daylighting, and smart controls mean fewer drafts, more stable temperatures, and less noise.
- Protection Against Price Shocks: Reducing demand for fossil fuels shrinks exposure to volatile energy markets.
- Resilience to Extreme Weather: Efficient, well-designed buildings better withstand heatwaves, cold snaps, and storms, safeguarding occupants during grid outages or emergencies.
Immediate Opportunities and Practical Steps
The tools for rapid progress are already available. Focus areas for immediate action include:
- Rapid uptake of high-efficiency heat pumps in place of fossil boilers.
- Widespread use of smart thermostats, ventilation, and lighting controls that enable dynamic adaptation to grid and occupant needs.
- Scaling up building energy codes and retrofitting strategies in all major markets, tailored to local climates and building types.
- Leveraging renovation moments—linking upgrades to times when buildings would be repaired or upgraded anyway.
- Integrating workforce and supply chain upskilling to ensure projects have qualified labor and quality delivery.
Challenges and Policy Gaps
Implementation is not without obstacles. Key barriers include:
- Split Incentives: In rental properties, tenants pay the bills but landlords must invest in upgrades, making motivation misaligned.
- Access to Capital: Many building owners lack ready financing for deep retrofits or new systems, especially in lower-income and emerging markets.
- Policy Fragmentation: Local until global alignment is often inconsistent, slowing down harmonized progress.
- Awareness and Trust: Building owners may lack knowledge of benefits, or mistrust payback projections from upgrades.
Clear government leadership and dedicated public-private collaboration are essential to navigate these gaps, supported by ongoing monitoring and revision of policy instruments.
Table: Key Elements of the IEA Buildings Policy Package
| Policy Pillar | Examples | Main Benefits |
|---|---|---|
| Regulation | Energy codes, demand response mandates, updating standards | Universal minimums, market transformation |
| Incentives | Retrofit grants, green loans, tax credits | Unlocks investment, targets hard-to-reach markets |
| Information | EPCs, disclosure, public campaigns, training | Empowers stakeholders, drives adoption and best practices |
Frequently Asked Questions (FAQs)
Q: What are building energy codes and why are they crucial?
A: Building energy codes are binding standards that set minimum requirements for energy efficiency in new and renovated buildings. They drive sector-wide improvements, slash energy waste, and help society achieve climate and economic goals.
Q: How much can emissions from the building sector be reduced with these policies?
A: The IEA estimates that with full implementation—including energy efficiency, electrification, and renewables—buildings could reduce emissions by over 95% by 2050.
Q: Which technologies are prioritized in the IEA roadmap?
A: High-efficiency heat pumps, advanced insulation, smart controls, and integration with onsite renewables are top priorities. Demand response capabilities and digital management tools will be essential for flexible, grid-interactive buildings.
Q: What can individuals do if their governments have not yet adopted the IEA proposals?
A: Individuals can seek out information on efficiency programs in their region, request energy performance certificates before purchasing homes, support businesses using best-in-class standards, and advocate for stronger local policies.
Q: Does the IEA proposal require new technology development?
A: No, most required solutions already exist and are commercially proven. The challenge is deploying them at scale across all regions and markets, which requires policy, finance, and education, not just innovation.
References
- https://iea.blob.core.windows.net/assets/1c9f0a29-e440-4cbc-839a-9b1916818267/IEAEnergyEfficiencyPolicyToolkit_2025_Online.pdf
- https://annex96.iea-ebc.org/about
- https://iea.blob.core.windows.net/assets/ddba54b4-f5af-47e4-8e92-d31a64e41b3f/Buildings-BuildingEnergyCodes-IEAEnergyEfficiencyPolicyToolkit2025.pdf
- https://www.cleanenergyministerial.org/content/uploads/2025/03/developingaglobalenergyefficiencyworkforceinthebuildingssector.pdf
- https://www.energy-transitions.org/wp-content/uploads/2025/01/ETC_Buildings-Decarbonisation-Report_DIGITALFINAL.pdf
- https://www.energyefficiencymovement.com/iea-conference-2025/
- https://energydigital.com/articles/iea-report-2025-clean-energy-investment-to-reach-us-2-2tn
- https://www.ren21.net/wp-content/uploads/2019/05/GSR_2025_Buildings_endnotes.pdf
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