A Guide to Decarbonizing Your Homes

Retrofitting refers to the process of upgrading and improving existing buildings to enhance their energy efficiency. Globally, our buildings are responsible for a substantial share of greenhouse gas emissions. By removing barriers to retrofitting, we can make significant progress in reducing emissions and meeting climate targets.

—

When we think about carbon emissions, the spaces we live, shop, eat and socialize in often do not come to mind, but they should. Buildings are responsible for 39% of global energy-related greenhouse gas emissions, according to the World Green Building Council.

The built environment refers to any building or infrastructure that enables modern human life. These constructions are often leaky and unable to effectively retain heat in the winter and naturally cool down in summer, forcing us to consume more energy to do so.

Why Retrofit?

According to the World Economic Forum, 80% of all housing stock that we will live in by 2050 has already been built. Rather than demolishing and replacing homes, retrofitting is the most sustainable way to reduce their greenhouse gas emissions.

Demolishing a building emits an average of 4.67 kilograms of carbon dioxide equivalent (CO2e) per square metre of a building area on average. The equivalent amount of carbon released for every 100 square metres demolished is the same as taking a round trip from London Heathrow to Nice, proof that it is more sustainable to adapt what we have than to knock down and start over.

What Is Retrofitting?

Retrofit refers to any upgrade on an existing building to improve its energy consumption and energy efficiency.

Retrofit measures can be broken down into three tiers.

Tier 1: Energy Conservation

The first tier focuses on reducing the amount of energy needed in the building. Measures include the installation of LED lightbulbs and draught excluders, proper maintenance of temperature systems, and using a smart meter to check energy consumption. As a first step of retrofitting, these actions can help save money and reduce energy consumption.

Tier 2: Energy Efficiency

While Tier 1 involves smaller interventions, Tier 2 requires structural upgrades to the fabric of the building. These are aimed at reducing heat loss, improving insulation and the building’s ability to cool down. These upgrades typically need upfront investment but offer long-term energy and financial savings.  Measures include loft insulation, cavity wall insulations, installing heat pumps and secondary glazing.

Tier 3: Energy Source and Management

The third tier focuses on energy source and wider energy management. This may include powering buildings with lower carbon sources, implementing a district heating and cooling system, and using software to manage energy demand for the building. Building management software can reduce energy demands of a building. It does so by regulating lighting, ventilation, heating and air conditioning. 

‘Economic Necessity’

The need for retrofit presents a significant challenge. 

Europe has the oldest housing stock in the world. A report by BRE found that a fifth (22.3%) of Europe’s housing stock was built before 1946 – this figure rises to 37.8% in the UK.

However, as stated by the World Economic Forum, retrofitting is not just a sustainability measure; it is an economic necessity. Retrofitting has the potential to reduce global energy demand by 12%. Whilst creating 3.2 million new jobs per year and improving employee productivity by up to US$7,500 per person per year.

Retrofitting can also lead to health benefits such as reduced pollutant-related mortality, heat-related mortality and circulatory diseases.

Barriers

Substantial barriers to retrofit have hindered progress. 

At a country level, these come in the form of insufficient policies and retrofit-aligned ambitions. Barriers for individual homeowners and tenants include high upfront costs, longer-term payback mechanisms, and a lack of affordable options.

There is also the wider issue of lack of skilled labour. Low-carbon construction materials, for example, are neither accessible nor cheap. Finally, many are unaware of the benefits of retrofitting to their finances and health. 

Retrofit Policy and Initiatives

In Asia, the challenge of retrofitting buildings has been recognized in several initiatives, such as in Malaysia’s National Energy Transition Roadmap (2023) and Singapore’s Green Mark Incentive Scheme for Existing Buildings 2.0 (2022). Meanwhile, Beijing implemented the Incentive Fund for Green Building Development in 2023, which looks at improving the energy conservation of both public and private buildings.     

75% of EU buildings have poor energy performance. The EU’s Revised Energy Performance of Buildings Directive (2024) aims to change this through increasing renovation of the worst-performing buildings in each country.  Implementation of this directive in 2026 into national law is estimated to reduce energy consumption by 11.7% across the bloc, while lowering energy bills and enabling healthier living conditions.         

Canada announced a CA$2 billion investment in large-scale building retrofits in 2020. This was supported by a Building Retrofit Initiative funded by the Canada Infrastructure Bank. In 2023, Colombia published its National Roadmap for Net Zero Carbon Buildings. This includes a goal for widespread use of energy audits by 2040 to lead a retrofit process.     

These global initiatives show how countries can tailor retrofit strategies to their own context.

Leading By Example

Currently, not a single country globally is meeting the retrofit rate of 2.5% of buildings each year to reach net zero by 2030.

In 2022, the Superbonus 110% scheme promoted by the Italian government offered tax credits of up to 110% on the cost of retrofitting and earthquake proofing of homes, making retrofit projects financially viable for many. The scheme saw over 122,000 applications approved and 21 billion euro spent as well as 410,000 new jobs in the construction industry.

In 2025, Tampines in Singapore became the first town centre to be retrofitted with a sustainable distributed district cooling system. Here, a closed system allows for cool water to be shared with individual buildings from a central plant via a network of pipes. Once the water is used, it is returned and chilled, before being redistributed.

These systems are often more energy efficient than individual building heating and cooling systems, more cost effective, and have other benefits such as improved air quality. Carbon emissions in Tampines are expected to be reduced by 1,000 tonnes as a result – the equivalent of taking 910 cars off the road. The energy savings are expected to equate to enough power supply for 710 flats a year.

Conclusion

The roadmap for retrofit is not without bumps. However, global interest has been building over the last five years. The greenhouse gas emissions from the built environment make it a sector that urgently needs to be addressed. 

As the global population rises, we will need to build more homes and buildings to support our lives. Retrofitting will help countries reduce emissions and provide improved living standards for citizens. It is more than an energy solution, it is a climate, economic, and public health imperative.