The European Environment Agency’s (EEA) 2025 climate review has reignited debate about how Europe plans to decarbonise its ageing building stock. While the review underscores the urgency of reducing emissions from Europe’s most energy-hungry sector, industry experts say it misses a critical opportunity: the rapid decarbonisation potential of artificial intelligence (AI).
Buildings still the EU’s biggest climate challenge
According to the EEA’s latest five-year climate review, buildings remain responsible for 42% of the EU’s total energy consumption and around 35% of CO₂ emissions. Despite policy efforts and significant funding for renovation programmes, 75% of the EU’s building stock remains energy inefficient. With 85% of the buildings that will exist in 2050 already standing today, the pace of physical renovation cannot meet the EU’s 2030 or 2050 climate targets without substantial digital intervention.
Yet the EEA’s recommendations remain largely unchanged from five years ago: increase physical renovations, improve insulation, and replace old heating systems. These measures are vital but slow, expensive, and disruptive. The review makes no mention of digital retrofits or AI-driven energy optimisation, technologies that can deliver measurable energy savings today, without demolition or downtime.
Experts call for “digital first” climate strategy
According to Donatas Karčiauskas, CEO of Exergio, an energy technology company specialising in AI for building energy efficiency, Europe’s climate strategy is lagging behind technological reality.
“The EEA report comes once every five years, but some parts of it feel stuck in the past,” said Karčiauskas. “AI has transformed how we manage transport, power grids, and healthcare. Yet when it comes to buildings, the largest source of energy waste,the EEA still talks only about insulation and boilers. The tools that could cut up to 30% of waste are invisible in this review.”
Independent studies have shown that AI in energy management systems can reduce building energy use by 8–40%, depending on the building type and systems in place. These “digital retrofits” use data analytics, machine learning, and automation to optimise HVAC, lighting, and heating in real time, without the need for costly physical upgrades.
AI retrofits already cutting emissions in commercial buildings
While missing from the EEA report, AI retrofits are already being deployed across Europe’s commercial real estate sector. Platforms like Exergio’s integrate with existing Building Management Systems (BMS) to continuously monitor and optimise operations. By analysing live data from sensors and control systems, AI platforms identify inefficiencies, such as overheating, unnecessary ventilation, or lighting left on in empty rooms, and correct them automatically.
“The report is right that buildings are Europe’s biggest climate problem,” added Karčiauskas. “But it fails to show how quickly we can act. Renovations are essential, but they are too slow to meet the 2030 climate goals. If AI isn’t mentioned in the continent’s flagship climate review, policymakers will continue to overlook the fastest lever we have.”
A smarter path to energy efficiency
AI-driven energy management offers both cost savings and carbon reduction, two objectives that traditional retrofits rarely deliver simultaneously. By dynamically adjusting energy use to occupancy patterns, weather conditions, and real-time grid signals, AI can ensure every kilowatt-hour is used efficiently.
In practice, this means heating and cooling systems scale back in unused areas, airflow is reduced when indoor air quality is optimal, and equipment such as boilers and chillers only operate when required. According to Exergio, this approach has already generated millions in savings for building owners, while significantly cutting CO₂ emissions.
Why policymakers must act now
The European Green Deal, Fit for 55, and the upcoming Energy Performance of Buildings Directive (EPBD) revision all aim to accelerate decarbonisation in the built environment. However, without integrating AI for building optimisation and data-driven energy efficiency, Europe will struggle to reach net-zero targets within the next decade.
Adopting AI-based systems across public, commercial, and industrial buildings could deliver near-term emissions reductions at scale, without the delays of physical retrofits. By combining AI retrofits with traditional renovation measures, the EU can take a balanced, future-proof approach, one that values both bricks and bytes in the race to decarbonise.
The risk of another lost decade
Exergio warns that Europe’s climate policy risks falling into another five-year cycle of missed opportunities. While deep renovation programmes remain crucial for long-term resilience, the lack of recognition for digital technologies in official reporting sends the wrong signal to policymakers and investors.
“If AI stays left out and forgotten from the agenda until the next review in 2030, Europe risks seeing the same numbers, the same gaps, and another five-year cycle lost,” Karčiauskas concluded.
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