Introduction

Globally, the building sector was responsible for 34 % of energy demand and 37 % of energy and process-related CO2 emissions in 2022. Despite some progress made in the last two decades, the building sector is not currently on track to achieve net zero emissions by 2050. Meeting this target requires significantly more substantial actions. Global building energy intensity must decrease by approximately 37% compared to 2015 levels, reaching a milestone of 96 kWh/m² by 2030.However, in 2022, the energy intensity in buildings was 145.3 kWh/m², reflecting only a marginal 5.1% decrease compared to 2015. The shortfall can largely be attributed to the increasing number of new builds without energy performance requirements in many countries and the low rate of energy retrofits in many others (United Nations Environment Programme, 2024).

In many developing and emerging economies, building energy demand is expected to increase significantly due to the rapid expansion of new construction and the growing need for energy services. It is projected that around 80% of the expected growth in floor area by 2030 will occur in these economies (IEA, 2023), where many countries do not have adequate energy performance requirements (United Nations Environment Programme, 2024). Thus, the IPCC report underscores that, by 2050, the building sector in developing countries have the greatest mitigation potentials (Cabeza et al., 2022). In most developed countries, despite improved building energy performance since 1990, significant mitigation potential remains in the extensive existing building stock that requires renovation (IEA, 2021d). The global policy landscape for building decarbonisation is also diverse. While some nations lack substantial policies, others have made progress in implementing national policies to achieve net-zero buildings (United Nations Environment Programme, 2024).

Against this background, this paper captures the diversity of building decarbonization policies in three major economies encompassing developed and emerging countries: the European Union (EU), China, and India. In 2020, these economies collectively accounted for more than 40% of global CO2 emissions. Meanwhile, each of them has set long-term national net zero climate targets. The EU aims to be climate-neutral by 2050 and reduce its greenhouse gas (GHG) emissions to at least 55% compared to 1990 by 2030 (European Commission, 2023a). China has pledged to peak its CO2 emissions before 2030 and achieve carbon neutrality before 2060, while India aspires to reach net-zero emissions by 2070 (MOEFCC, 2022). Buildings significantly contribute to emissions in all three regions. Among different building types, existing literature demonstrates higher per capita CO2 emissions from residential buildings compared to commercial buildings worldwide, including these three regions (Camarasa et al., 2022). This underscores the crucial role of residential buildings in the endeavor of decarbonizing the building sector. Therefore, residential buildings will be the central focus of this paper.

In the EU, the residential sector plays a significant role, contributing to 27% of the total final energy consumption in 2021. Within this sector, space heating was the primary driver, representing a significant 64.4% of the final energy consumption. In contrast, energy consumption for space cooling remained negligible in most Member States (MSs). Natural gas dominated as the leading energy source at 33.5%, followed by electricity at 24.6%, renewables and waste at 21.2%, and oil and petroleum products at 9.5% (Eurostat, 2023).GHG emissions from the residential sector amount to approximately 315 million metric tons of CO2-equivalent, representing approximately 13% of total energy-related CO2 emission (Directorate-General for Climate Action (European Commission) et al., 2021). It is worth noting that between 75% to 95% of EU buildings existing today will still be in use in 2050, and nearly all of them will require energy renovations to support the EU meet its climate targets (BPIE, 2017). However, the annual energy renovation rate of residential buildings was less than 1% (Filippidou et al., 2023) and many of these renovations achieve low energy savings (European Commission., 2019).

China has an extensive residential building stock, exceeding 53 billion m² in 2021 (urban: 30.5 billion m2, rural: 22.6 billion m2). Driven by the continuous urbanization, which is projected to rise from 61% in 2020 to 80% in 2050 (Camarasa et al., 2022), building stock is expected to expand, estimated at around 40% growth between now and 2060, according to an IEA scenario (IEA, 2021a). Meanwhile, most of China’s residential building stock is relatively young and will remain in use for an extended period. Residential buildings have continued to account for a substantial portion of China’s energy consumption, totalling 16.4 million terajoules (TJ) and representing 70% of the total building energy consumption. In urban areas, residential energy consumption reached 8.9 million TJ, encompassing 657 billion kWh of electricity. Rural areas contributed 7.5 million TJ, including 2.6 million TJ from biomass and 375 billion kWh from electricity. CO2 emissions from residential buildings exceeded 1.3 billion tons, comprising nearly 60% of the total building emissions (including direct and indirect emissions) (THUBERC, 2023). The country has diverse climates, leading to varying heating and cooling demands. For instance, the northern region predominantly experiences cold and severely cold climates and relies on district heating systems, whereas the southern region primarily employs decentralized heating solutions. Furthermore, China's demand for space cooling has exhibited the fastest growth globally. Cooling, primarily using individual air conditioning units (AC), currently constitutes approximately 7% of the total final energy demand in buildings (IEA, 2021a).

In India, residential buildings covered a vast floor area of 15.3 billion m2 in 2017. In contrast to the EU and China, a significant portion of India's building stock in 2040 is yet to be constructed. Urbanization and replacement of informal settlements with new modern buildings will trigger a substantial increase of residential building stock surging from less than 20 billion m² today to over 50 billion m² within two decades (IEA, 2021c). Residential buildings, as the second-largest final energy consumer, account for approximately 25-27% of final energy consumption and contribute about 5-7% of total energy-related emissions (MoEFCC, 2023). India’s predominately tropical and sub- tropical climate leads to limited heating demand and high cooling demand. In the year 2020-2021, the residential sector accounted for approximately 32% of the total electricity consumption (Government of India et al., 2022). Climate conditions coupled with improved income and living standards are anticipated to drive a rapid growth in AC ownership, from currently 8% surging to 40% by 2037-38, leading to a corresponding increase in electricity consumption from less than 150 TWh in 2017 to a projected 400-600 TWh by 2037-38 (Ministry of Environment, Forest, & Climate Change, 2019). Furthermore, traditional biomass for cooking, in particular, in rural areas, currently accounts for 12% of the nation's overall final energy consumption (IEA, 2021c).

Considering the disparities in climate conditions, heating and cooling demands, and socio-economic drivers, it becomes evident that effective residential building decarbonization strategies differ across the three regionsFootnote 1.

In the EU, given the extensive existing building stock, deep energy renovation stands out as the primary strategy for achieving building decarbonization. If all EU residential buildings were renovated to achieve a minimum 20% energy savings in the building envelope, 777 TWh of energy could be saved (Fabbri et al., 2023). Another pillar of EU building decarbonization is the electrification of heating, closely linked to the rapid expansion of renewable energy sources in power generation. In 2022, heat pump sales in the EU experienced a significant surge, with a 40% increase (United Nations Environment Programme, 2024). According to the PRIMES BuiMo model, the electrification rate would reach 58%-66% of final energy consumption by 2050 (Filippidou et al., 2023).

In China, considering the unprecedented urbanization and new construction trends, it is imperative for China's new buildings to strive for near-zero or zero-energy standards. On the other hand, the huge existing building stock makes energy retrofits a paramount strategy for building decarbonization in China (IEA, 2021a). As per Scenario by (Guo et al., 2022; You et al., 2023), by 2030, existing buildings should undergo retrofitting to significantly enhance their energy performance. By 2060, deep retrofitting should be completed for all existing buildings. Simultaneously, a critical element for building decarbonization in China is the transition to low-carbon heating, primarily through electrification and district heating systems. In northern urban areas characterized by historically high heating demand, the share of low carbon heating (heat pump and district heating) should exceed 70% by 2030 and surpass 90% by 2060. In other urban areas, the share of heat pumps should reach nearly 100% by 2060. Moreover, in rural areas, the reliance on traditional biomass sources is expected to rapidly decrease, falling below 10% by approximately 2040 (ibid.). Furthermore, the rapid AC growth also necessities the widespread adoption of highly energy-efficient AC units, in conjunction with improvements in building envelopes.

In India, in contrast to the EU and China, the expected growth of new building stock and increasing AC ownership makes enhancing new building energy efficiency for passive cooling and widespread of highly energy efficient ACs fundamental for India’s building decarbonization. Additionally, addressing the use of traditional biomass for cooking, which also carries significant health implications, is vital for India's building decarbonization (IEA, 2021b).

These divergent decarbonization strategies, shaped by distinct national contexts, have led to varying sets of policies in these three regions. This paper aims to systematically analyze existing residential building decarbonization policies in these three regions, pinpointing policy gaps. It also aims to highlight similarities and differences in these policies across the regions to facilitate mutual learning and offer valuable insights for global policymakers. While we are aware of the growing relevance of embodied energy and emissions in buildings, this paper confines its scope to the operational phase, encompassing energy usage for HVAC, domestic hot water, and lighting.

In the remainder of the paper, we first present our methodology for empirically analyzing building decarbonization policies. Following that, we will conduct a comprehensive analysis and comparison of the existing policies aimed at decarbonizing residential buildings in the three regions. This analysis will involve mapping the current policies and providing detailed assessments of selected policy instruments. Finally, we will conclude our study by summarizing our comparative findings and suggesting avenues for future research.

Methodology

It is increasingly acknowledged that policy mixes are required to address the multiple barriers to decarbonizing buildings (Hoefele & Thomas, 2011; Kern et al., 2017; Rosenow et al., 2016, 2017). Thus, firstly, a policy landscape analysis was conducted to map and compare the existing building decarbonization policies across the three regions. It involved a systematic categorization of policy instruments based on their potential to address specific barriers in the context of building decarbonization. The categorization encompasses the following key types of policy instruments: governance and planning, regulatory instruments, economic instruments, information instruments, policies supporting capacity building, and policies promoting energy services and business models (Table 1).

Table 1 Categories of policy instruments for building decarbonization
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Although identifying different policy instrument types provides insights into the overall policy landscape, the type alone is not decisive in explaining policy outcomes. Policy design is widely acknowledged as a critical determinant of policy effectiveness (Schmidt & Sewerin, 2019). Thus, identifying policy gaps for building decarbonization needs a more nuanced understanding of individual policies, going beyond merely mapping the existence of policy instruments. Accordingly, the second step of policy analysis captured the design features of three selected policy instruments that are generally considered to be highly effective (Ürge-Vorsatz et al., 2007) and common across the three regions: building energy code, building information disclosure, and financial incentives. For this purpose, we adapted the concept of policy intensity introduced by Schaffrin et al. (2015), which is defined as the "objectives" and "settings" of a policy instrument and the “organization and mobilization of resources” for the policy instrument. Higher policy intensity is associated with greater effectiveness. To operationalize the concept of policy intensity, Schaffrin et al. (2015) developed six categories of indicators: objectives, scope, integration, budget, implementation, and monitoring. Objectives assess the alignment of a specific policy target with overall policy goals. Scope defines the target objects or groups of specific policies, such as building types or income groups. Integration reflects if the policy is a part of a broader policy package. Budget pertains to the associated policy expenditure. Implementation outlines the procedure for policy implementation. Monitoring evaluates whether a monitoring process is in place for policy implementation (ibid.). These indicators reveal the policy ambitions, activities, and resources allocated to the specific policy under study. They formed the foundation for assessing the policy intensity in our study. We adapted the coding questions for specific indicators to align with the analysis of selected policies. However, due to data constraints, we only conducted in-depth assessments of Objectives, Scope, and Implementation for these policy instruments. Additionally, we employed a qualitative approach to assess the policy intensity, refraining from scoring or weighting the indicators to maintain objectivity and acknowledge the complexity and diversity of the policy instruments under examination.

The policy analysis was conducted based on a combination of literature review and data collected and reflection by national experts, who possess profound knowledge and expertise in building decarbonization within their respective countries Literatures include peer-reviewed papers, governmental documents (including assessment reports), and news articles. In addition, several semi-structured interviews were conducted with external experts: China-two academics (coded as I#1, I#2), two practitioners involved in clean heating pilots (I#3, I#4), one from industrial association (I#5); India-one academics(I#6); EU-one academics(I#7).

Policy mapping for residential building decarbonization in the EU, China, and India

In this section, we conduct a comparative analysis of the policy landscapes for residential building decarbonization across the three regions, considering their respective contexts.

Before discussing policies, we highlight the key barriers in building decarbonization across the three regions, encompassing political, economic, informational, and capacity dimensions to be addressed by policies. Figure 1 summarizes these barriers identified through literature review and expert opinions (AEEE, 2017; Braungardt et al., 2022; Das, 2022; European Commission, 2021a; Wang, 2020). Several barriers are common across all three regions, including subsidies for fossil fuel heating and cooking, high upfront costs, and capacity gaps within the building sector, encompassing both skilled workforces and the ability of responsible authorities to enforce building policies. However, some barriers are region-specific. For instance, Chinese regions supplied with district heating have low area-based residential heating prices, EU MSs with low home ownership rates experience split incentives, and India lacks a clear building decarbonization roadmap. These identified barriers are not exhaustive. Additional factors, rooted in structural dimensions like the rapid urbanization witnessed in India and China or social and cultural dimensions such as traditional cooking practices in China, also exert significant influence. Addressing these multifaceted challenges falls beyond the purview of building policies.

Fig. 1
figure 1

Major barriers for building decarbonization in the EU, China, and India

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As shown in Fig. 2, policymakers in the three regions have implemented a policy mix to address key political, economic, information, and capacity barriers to decarbonize the building sector. An exhaustive listing of these policies and their details can be found in Supplementary Information. The EU showcases the broadest range of policy instruments. An in-depth comparison of the policy landscape across the three regions is provided below.

Fig. 2
figure 2

Mapping of building decarbonization policies in the EU, China, and India

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Concerning governance and planning instruments:

  • Policy roadmap defines clear targets and strategies of building decarbonization, providing a reliable planning framework for market actors and reducing risk for investors and thus addressing the political barriers. Each of the three regions formulated policy roadmaps related to the building sector: The long-term renovation strategies of EU MSs stipulated by Energy Performance of Buildings Directive (EPBD), China’s Carbon Peak Action Plan (CPAP), and India Cooling Action Plan (ICAP). The policy roadmaps of EU MSs and China encompass strategies for the overall building sector, covering both new and existing residential buildings. The EU's roadmap particularly emphasizes building renovation, while China will further strengthen the stringency of new building MEPs and concurrently undertake renovations in its building stock. In addition, China also has a roadmap for cooling, including space cooling, and focuses on cooling appliances and equipment. Moreover, the timespans of the roadmaps are different: the EU's aligns with its 2050 climate target, whereas China's corresponds to its 2030 carbon peak objective. In contrast, India's roadmap specially addresses cooling, including space cooling within buildings. It solely recommends adoption and compliance with the building energy code. Despite suggesting a review and enhancement of stringency of the code, the Indian roadmap lacks specific targets and a defined timeline for achieving a net-zero building stock.

  • Carbon pricing makes investments in building energy efficiency and on-site renewable energies more attractive. The generated revenues can be further used to support climate mitigation, including building energy efficiency and renewable energy, particularly for low-income households living in worst-performing buildings who are negatively affected by carbon pricing (Lowes et al., 2022; Steckel et al., 2021).While some EU MSs already introduced carbon pricing for fuel use of buildings and the EU will also include it in its ETS from 2027, China and India have not yet embraced this approach. This divergence can be attributed to factors such as the EU's mature ETS versus China's nascent ETS that presently prioritizes major emitters, as well as India’s recent unveiling of plans for a carbon market. Moreover, India's low direct fossil fuel use (7%) within buildings, alongside its promotion of LPG for cooking, contributes to the absence of carbon pricing in this domain.

    Our analysis also highlights a distinct disparity in electricity pricing between the EU and China. In the EU, currently, the high electricity taxes and levies on electricity lead to higher operational cost for heat electrification compared to heating with fossil fuel gas (Rosenow et al., 2023). In China, the low residential electricity prices and promotion of 'time-of-use' tariffs have the potential to lower heat pump operational costs, thereby promoting heat electrification. In addition, within the EU, the pricing of electricity is determined by energy corporations, whereas in China, it is regulated by local government entities. Consequently, the EC proposed a reform of the Energy Taxation Directive that would ensure electricity to be always the least taxed energy carrier, reflecting that its environmental damage costs are soon expected to be lower than those of fossil fuels and biomass (European Commission, 2021b). In contrast, China's governance model enables governmental influence over electricity tariff formulation, covering both tariff levels and structures. On the other hand, a distinctive feature in China is the low area-based residential heating price in regions supplied with district heating, which acts as a significant disincentive for consumers to invest in energy efficiency.

  • Fossil fuel price-distorting subsidies persist in the residential sectors of the EU and China. Nevertheless, both regions have committed to ending ineffective subsidies. Conversely, in India, there is no evidence of subsidies distorting prices for residential fossil fuel consumption.

  • Evidence shows that well-designed Energy efficiency obligations (EEOs) can deliver cost-effective energy savings over a long period(Bertoldi et al., 2010), in particular, through the tradable savings. EEOs can also lower public budget burden, in comparison to subsidies paid from government budgets. Although all three regions implement EEOs, residential buildings are notably absent in Indian and Chinese schemes. This discrepancy can be attributed to the smaller scale of residential building projects relative to the industrial energy efficiency projects, identified as a major reason in China (underscored by I#1 and I#5). A similar constraint may apply in India, further exacerbated by the lack of emphasis on residential building renovation in policy agendas.

  • Successful experiences reveal the cost-effectiveness of an overarching energy efficiency funding program that includes a policy package, facilitated by synergies among various measures (Thomas & Jentgens, 2012). Notably, only MSs in the EU have such a program in place.

Regulatory instruments

All three regions have introduced residential Minimum Energy Performance Requirements (MEPR)s for new build and minimum energy performance standards (MEPS) for residential appliances and equipment. These regulatory frameworks establish an upper threshold for permissible energy consumption, thereby effectively excluding the least efficient options from the market. They are proven to be the most cost-effective for building decarbonization (Ürge-Vorsatz et al., 2007; Wang et al., 2019; (Ürge-Vorsatz et al., 2020b). In addition to new build, the EU also regulate building energy renovation by imposing MEPRs for building components during major renovations. Product-MEPS cover the following four building related appliances with the greatest saving potentials, i.e., space heating, spacing cooling, water heating, and lighting, in the EU and China. No MEPS are found for space heating in India. This could likely be attributed to the relatively constrained demand for heating in India.

Beyond the realm of MEPRs and MEPs, regulations can extend to the prohibition of fossil fuels and fossil fuel boilers, which becomes imperative in pursuit of decarbonizing heating. Both the EU and China have either partially banned or outlined plans to phase out fossil fuel boilers within agreed-upon timelines. However, it's noteworthy that in China, natural gas is still considered cleaner fuel options for heating. The partial phase-out of fossil boilers may potentially lead to "lock-in effects" of fossil-fuel heating.

Information instruments

Building energy labelling informs building owners and occupants regarding the energy use of the building. It could also create demand for energy efficiency measures by providing recommendations for the cost-effective improvement of energy performance. Only the EU has widely implemented such an instrument, namely through Energy Performance Certificates (EPCs). Although building energy labelling has been introduced in both China and India, their widespread implementation remains limited. The underlying causes for this restrained uptake are explored in Section 1. In contrast, in all three regions, energy efficiency labelling schemes for the mentioned appliances and equipment have been implemented alongside MEPS, together pull and push the market.

Financial incentives play a crucial role in overcoming the higher upfront costs associated with investments in high energy performance buildings, heat pumps, and super-efficient cooling systems. With these incentives, policymakers also send a signal of the potential development of the sector to suppliers, thus reducing their uncertainty (CAT, 2022). Both the EU and China have introduced financial incentives for energy retrofitting and low-carbon heating solutions, primarily through subsidies, as well as additional incentives such as tax credits and soft loans within the EU. However, incentives for new buildings are limited. In contrast, India notably lacks direct financial incentives for building energy efficiency, with subsidies largely allocated for clean cooking purposes.

Policy for promoting business models

The mitigation of economic barriers through business models of energy services providers, such as ESCOs, also holds significant promise. Such models facilitate the financing of upfront costs and subsequent recovery from energy cost savings (Bertoldi et al., 2021). The ESCO markets in both the EU and China are mature, supported by well-developed policy frameworks aimed at fostering their growth. Despite these efforts, ESCO projects remain relatively constrained for residential buildings. This limitation can be attributed to the small scale of residential projects and the elevated transaction costs stemming from the technical and, at times, financial risks that ESCOs undertake(mentioned by I#5, I#7).In China, the low area-based residential heat pricing exacerbates the discouragement of ESCO projects for residential buildings (Zhu, 2021). India's ESCO market remains largely underdeveloped, except for the state-owned Super ESCO. This underdevelopment can be attributed to the deficiency in the policy framework, the limited demand for energy efficiency measures within the residential sector's landscape, lack of capacity of small- and medium- ESCOs, and lack of trust between ESCOs and building owners (explained by I#6).

To decarbonize residential buildings, integrated business models have been promoted across all three nations, albeit to varying extents and forms. The EU promotes One-Stop-Shops (OSS) through its EPBD and Energy Efficiency Directive (EED). In India, a similar approach has been adopted with the establishment of Super ESCOs by the government, albeit with a focus on aggregating demand for energy-efficient appliances. In China, some local governments have adopted Engineering, Procurement, and Construction (EPC) procurement services to retrofit neighbourhoods.

Capacity building policies

Training and education are essential to provide workforce with the necessary knowledge and skills for building decarbonization. Certification of qualified actors is key to ensuring accurate, optimal, and safe services and to enhancing confidence of investors/users on the services delivered. All three regions have incorporated training and certification for building decarbonization professionals in their national policies to varying degrees. The EU mandates certification through energy-related legislations, China integrates it into occupational regulations and education, while India establishes a national certification program. The EU requires certification for a range of key services, while qualification requirements have been narrower in China and India. However, the recent recognition of "building energy efficiency and emission reduction consultants" in China has the potential to bolster capacity for net-zero building transitions. On the other hand, China and India have paid attention on ensuring workforce’s skill in the field of cooling, attributing to the huge cooling market in both countries. In addition to national policies, both the EU and China have seen the involvement of recognized entities, such as industry associations and energy agencies, in offering training and certification for building decarbonization. However, such measures are currently lacking in India. Since the public system may be slow in responding to the market demand, the involvement of such social partners to provide more flexible and short-term specialized training is essential (ILO, 2011).

In summary, while policymakers in the three regions have demonstrated awareness regarding the significance of a comprehensive policy package for the decarbonization of their building stock, notable variations exist in terms of the types of policy instruments utilized, the ambitions, and the extent of coverage for residential buildings. For instance, China and India have only delved to a limited degree in exploring the potential of various governance and planning instruments to address the political and economic barriers. While the EU has been proactive in implementing diverse governance and planning instruments, both the EU and China continue to grapple with fossil fuel price-distorting subsidies, which represent a significant political barrier to the adoption of low carbon heating solutions. Besides, both the EU and China have closely aligned their building targets with their respective climate objectives. The EU's targets stand out as the most ambitious, featuring a commitment to achieving zero-emission buildings for new construction by 2030. In contrast, the absence of a building roadmap in India may perpetuate market uncertainties regarding net-zero building transformation. Additionally, the implementation of ESCOs in both the EU and China has been challenging due to the small scale of residential buildings. However, integrated business models, such as the OSS promoted by the EU, could help address this issue. Finally, to address capacity barriers, training and certification for professionals are incorporated into national policies in all three regions. India, however, needs to expand its qualification requirements and involve more recognized entities.

Design of key policy instruments for residential building decarbonization in the EU, China, and India

In this section, the design of the following policy instruments that are commonly in place across all three regions were analyzed: building energy code, building information disclosure, and economic incentives. For each policy instrument, we first provide a descriptive overview of its design in the respective country. Subsequently, we assess and compare the policy intensity of these instruments using the analytical framework.

Building energy codes

To assess the policy intensity of building energy codes in the three regions, we analyzed four intensity measures (Table 2) First, the decarbonization potential of a MEPR depends on its stringency. The stringency of the codes needs to be continuously increased over time towards net zero buildings. Second, the potential of a MEPR for overall residential building decarbonization also depends on the scope it covers. We examined the scope of code applied in terms of building types, geographic coverage, and the on-site renewable share. Third, in terms of implementation, since the effectiveness of codes highly depends on the level of compliance, we first analyzed if the code compliance is mandatory or voluntary and the process to ensure compliance, including compliance check and penalties (in case of mandatory). Moreover, we also investigated if the code is prescriptive or performance-based. Prescriptive codes establish minimum specifications for individual components, while outcome-based codes stipulate a maximum energy consumption or intensity for the entire building.

Table 2 Policy intensity assessment of building energy codes in the EU, China, and India
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EU

The EPBD introduced in 2002 mandates all MSs to set national cost-optimal MEPRs for new buildings and large existing buildings undergoing major renovation. It was amended in 2010 with a strengthened requirement for all MSs and further updated in 2018 to align with the EU's new 2030 energy and climate targets. The 2010 recast of the EPBD stipulated that all new buildings must be Nearly-Zero Energy Buildings (NZEB) by 2020, defined as “a building that has a very high energy performance…The nearly zero or very low amount of energy required should be covered to a very significant extent by energy from renewable sources, including energy from renewable sources produced on-site or nearby” (Art.2(2) of the Directive 2010/31/EU on the Energy Performance of Buildings). While NZEBs are obligatory for new buildings, renovations of existing buildings can continue to apply an individual cost-optimal approach. According to the recent recast for the EPBD, MSs shall furthermore ensure that, from 1 January 2030, all new buildings are zero-emission buildings (European Commission, 2023b). A zero-emission building is defined as “a building with a very high energy performance, with the very low amount of energy still required fully covered by energy from renewable sources and without on-site carbon emissions from fossil fuels”. It additionally includes the calculation of the life-cycle Global Warming Potential (GWP) (Legislative Resolution of 12 March 2024 on the Proposal for a Directive of the European Parliament and of the Council on the Energy Performance of Buildings (Recast) (COM(2021)0802 – C9-0469/2021 – 2021/0426(COD)), 2024). Most MSs have adopted performance-based requirements for new buildings, limiting energy consumption of the overall building. Some MSs use prescriptive-based approach setting MEPs for each building components as an addition (Economidou, 2012). With regard to renewables, the EU’s Renewable Energy Directive (RED) requires MSs to set minimum levels of renewable sources in both new and existing buildings subject to major renovations (Directive (EU) 2023/2413 of the European Parliament and of the Council of 18 October 2023 Amending Directive (EU) 2018/2001, Regulation (EU) 2018/1999 and Directive 98/70/EC as Regards the Promotion of Energy from Renewable Sources, and Repealing Council Directive (EU) 2015/652, 2023)

According to a compliance study in 2015, the compliance rate of MEPRs in MSs for new buildings is high, exceeding 80% in most MSs. However, for major renovation of existing buildings, the reporting level was limited (11 MSs), and reported compliance rates range from 55% to 70%. Most MSs conduct compliance checks during the design phases and upon completion of new buildings. In more than 50% of MSs, the compliance check of MEPRs for new buildings is integrated within the framework of issuing building permits. In such instances, the implementation of formal penalty mechanisms for MEPR non-compliance is unnecessary. Warnings and fines are found in several other MSs as penalties. In contrast to new buildings, the procedures for ensuring compliance with MEPRs for building renovation and the replacement of building elements are less developed and not as seamlessly integrated into established practices.

China

The Chinese government introduced the residential building energy code in 1986, mandating a 30% energy saving for space heating compared to 1980s reference buildings. Over time, residential codes have evolved for five distinct climate zones (Hot Summer and Cold Winter (HSCW), Hot Summer and Warm Winter (HSWW), Cold(C), Severe Cold (SC), and moderate). They have undergone multiple revisions to achieve a higher energy performance: energy saving of 50% (C/SC in 1995, HSCW in 2001, and HSWW in 2003), 65% (HSCW and C/SC, 2010; moderate, 2019), and 75% (C/SC, 2018) (MoHURD, 2020). These codes are design standards and prescribe the required performance of individual building technologies and components (e.g., building envelope, HVAC), while not defining overall minimum building energy consumption. In 2021, new guidelines were issued by the national government, stipulating that new residential buildings in HSCW and HSWW must achieve 65% energy savings, while those in C/SC zones must reach 75% (MoHURD, 2021). The 2022 Carbon Peak Action Plan targets an 83% reduction in energy consumption of new residential buildings in SC/C zones and 75% reduction in other zones by 2030. All these Codes are mandatory only for new residential buildings in urban areas. Code compliance is enforced through regular inspections after design and random on-site inspections upon completion. Non-compliant projects cannot be sold or occupied until they pass inspection. Compliance efforts had been intensified since 2007 due to early low rates, with rigorous tests, approvals, and penalties (e.g., revocation of licenses and imposition of fines) introduced (Feng et al., 2015). Compliance rate during both the design and completion phases had markedly improved since then, reaching almost 100% by 2015 (Chongqing University et al., 2016). With regard to on-site renewable energies, all new buildings should install solar systems.

In 2016, the Chinese government introduced the Energy Quota Standard of Civil Buildings (EQS) for residential and non-residential buildings in different climate zones, for the first time focusing on actual energy use intensity (MoHURD, 2016). Residential buildings have separate evaluations for heating, electricity, and gas use intensity. For buildings with district heating, district heating performance also needs to be evaluated. The EQS is independent of the above-mentioned building energy codes and is voluntary for both new and existing buildings. Data is collected over a year, but compliance measures and penalties are absent. The EQS had been tested only in some major cities and had not been widely implemented (stated by I#5).

In 2019, the national government released the Technical Standard for NZEBs, which defines three categories of highly efficient buildings: ultra-low energy buildings (ULEB), NZEB, and zero energy buildings. ULEBs are required to be 50% more efficient than standards issued by 2016, while NZEBs need to be 60-75% more efficient. Zero energy buildings integrate renewable energy on top of the NZEB energy consumption level (MoHURD, 2019). For residential buildings, the maximum final energy intensity of ULEB and NZEB is 65 kWh/m2 and 55 kWh/m2, respectively. The standard also prescribes energy requirements for individual building components. Compliance with this standard is voluntary, and checks are conducted during design, completion, and one year after completion.

India

In 2018, the national government introduced the Eco Niwas Samhita (ENS) building energy code (Bureau of Energy Efficiency, 2018). This code is applicable to new residential buildings or the residential component of mixed-use projects on plots of land measuring 500 m² or larger. Presently, compliance with the code remains voluntary for UTs/states (Bureau of Energy Efficiency, 2022). Some states, like Kerala and Punjab, are in the process of adopting the code (Rajwi, 2022) (Punjab Energy Development Agency, 2023) . However, the amendment to the Energy Conservation Act (ECA) proposed in 2022 will render the building energy code obligatory for residential buildings with a minimum connected load of 100 kW or a contract demand of 120 kVA. The code prescribes energy-related requirements for the building envelope, achievable either by meeting prescriptive criteria or attaining the minimum points within a points-based system. The latter approach awards the achievement of higher energy efficiency than the MEPS, as well as the inclusion of on-site renewable energy (Bureau of Energy Efficiency, 2021). Several resources, including calculation tools are provided by the national government to enhance code compliance. The method and stages of compliance checks are not uniform across regions.

The EU MSs and China have mandatory residential building energy codes and continuously increased the stringency over time and have Nearly Zero Energy Building (NZEB) standards. The EU’s MEPRs for new buildings are more ambitious. All new buildings in the EU are mandated to achieve NZEB standards by 2020 and prospectively to become zero-emission buildings by 2028 or 2030. China has reinforced mandatory codes across various climate zones, especially in colder regions with high heating demand, and subsequently introduced a voluntary NZEB code. However, the stringency targets announced in the roadmap for new residential buildings by 2030 still does not attain NZEB standards. In contrast to the EU and China, India’s first voluntary residential building energy code has yet been widely adopted, where the code is expected to be mandatory for residential buildings reaching specific loads.

The EU has mandatory MEPRs for existing residential buildings under major renovations, while China mandatory code and India’s voluntary code are applied to newly constructed urban residential buildings. Although MEPRs for existing buildings are more relevant for countries with low new construction, this can become increasingly important for those with high new construction (Cabeza et al., 2022), particularly in cases like China, where there is potential for a large existing building stock. Moreover, the absence of mandatory codes in rural areas can result in a lock-in of low energy performance, particularly considering the substantial building stock in rural China, which currently exceeds 23 billion m2 (over 43% of the total residential building stock) (China Association of Building Energy Efficiency, 2022). The EU's NZEB and zero-emission buildings under the EPBD, as well as China's NZEB, encompass the inclusion of on-site or nearby renewables in their definitions, although the codes lack specific requirements. The EU's RED also obliges MSs to set minimum renewable energy requirements, effectively complementing the NZEB standard. India's code promotes the use of solar systems. Remarkably, China's code mandates the installation of solar systems in new buildings, a requirement not present in the EU and India.

Regarding compliance, high compliance rates were observed for new buildings in the EU and China. In the EU, compliance checks for new buildings are well-established and integrated into existing building permission procedures. China has bolstered its compliance checks and imposes stringent penalties. Both regions conduct compliance checks during design and upon completion. However, compliance reporting for existing building renovations, mandated for MEPR in the EU, is lower due to less developed compliance check procedures. China’s two voluntary codes, ENS and NZEB, include post-occupancy checks, adding to compliance costs and potentially impeding wider adoption. In contrast, the compliance check procedure in India has not been established, along with the lack of qualified monitoring personnel. I#6 stressed that the code “is very complex to be implemented as it doesn’t take ground reality into account”, which also contributes to the low compliance.

The three regions exhibit variations in their approach, whether prescriptive or performance-based. The EU MSs predominantly employ a performance-based approach, whereas China's mandatory code and India's code are prescriptive. China introduced a voluntary performance-based code (EQS), but its complexity and lack of a compliance system led to limited implementation. China's recent voluntary NZEB code combines both approaches, similar to certain EU MSs. Unlike the constrained flexibility of prescriptive methods, the performance-based approach is holistic and permits trade-offs between components, potentially resulting in higher energy efficiency tailored to specific building features (Enker & Morrison, 2020). The combination of both approaches could ensure high performance components and equipment are used. In India, the building code incorporates an additional point-based prescriptive system, which rewards buildings with extra points for meeting specific component requirements. Despite its intention to encourage higher energy performance, incentive mechanisms are not currently in place.

Building information disclosure

To evaluate the policy intensity of energy performance labelling(Table 3), we analyzed the following measures. First, we examined the scope of building types, distinguishing between new or existing buildings, and what information is required for disclosure. Second, in terms of implementation, we determined whether the disclosure of energy performance information is mandatory or voluntary. We also investigated the integration of labelling with building energy codes, as this synergy can drive both market pull and regulatory push towards higher energy efficiency. Moreover, similar to the assessment of building energy codes, we investigated measures to enhance enforcement. Additionally, the qualification of the assessor is considered the most critical aspect affecting quality of the labelling (Li et al., 2019). Thus, we also investigated the assessor qualification system in each country, namely, if mandatory training and or compulsory examination are required.

Table 3 Policy intensity assessment of building information disclosure in the EU, China, and India
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EU: Energy Performance Certificates (EPCs) are mandatory for new and existing buildings, “when they have undergone a major renovation, when they are sold, when they are rented out to a new tenant, or for which a rental contract is renewed” (Legislative Resolution of 12 March 2024 on the Proposal for a Directive of the European Parliament and of the Council on the Energy Performance of Buildings (Recast) (COM(2021)0802 – C9-0469/2021 – 2021/0426(COD)), 2024). For residential buildings, EPCs display the heating, cooling, and water heating energy performance of a specific building or building unit (kWh/m2/y) and include recommended steps for energy performance improvements. The energy performance can be either calculated or based on measured energy consumption (Economidou et al., 2020). For most countries, EPCs use a scale, i.e., in many countries, A to G (from most to least energy efficient). In 11 MSs, EPCs already clearly indicate if the buildings meet NZEB requirements (Gokarakonda, Venjakob, Thomas, & Kostova, 2020b). The recently EPBD recast aims to make EPC more comparable across MSs by introducing a harmonized scale of energy performance classes: A represents zero emission buildings and G the very worst-performing buildings in the national building stockFootnote 2.

For new buildings, compliance with EPCs is assessed during building approval and upon completion. The EPBD mandates MSs to establish independent control systems for effective enforcement, ensuring EPC quality and compliance monitoring. Mandatory on-site inspections for EPC assessments are widespread across most MSs (Gokarakonda, Venjakob, & Thomas, 2020a). Additionally, many MSs offer either mandatory official software or certified private software for compliance checking.

In terms of qualification of EPC assessors, trainings are mandatory in 13 MSs and are voluntary in many other MSs. The mandatory training primarily covers obtaining input data, performing calculations, providing cost-effective recommendations, and EPC assessor obligations etc(ibid.).

China

BEEL informs buyers about annual heating and cooling demand, as well as energy savings (design and actual), and rates buildings on a scale from 1 to 3 stars, representing low to high performance. The energy savings indicator corresponds to the building energy codes; for instance, buildings achieving 65% or more energy savings in specific climate zones could attain a 3-star rating. The labels are applied to both new and existing buildings and voluntary for residential buildings.

To obtain the BEEL certification, building owners provide necessary data to a government-recognized third-party entity, which evaluates the building's energy performance utilizing governmental accredited software and, at times, supplementing with on-site inspections. As a result, a preliminary BEEL rating is issued, valid for a year post-occupancy. Following performance measurement and evaluation spanning over a year, an actual BEEL label is certified, with validity for five years, subject to performance outcomes (MoHURD, 2013). Only institutions recognized by the national government are authorized to issue 3-star BEEL certifications. Those endorsed by provincial governments possess the authority to confer 1- or 2-star BEEL certifications. These institutions are required to meet specific criteria pertaining to registered capital, assessment facilities, organizational structure, the number of technicians and engineers, as well as staff expertise, among other factors (mentioned by#1). According to (Yu et al., 2019), a relatively limited number of such institutions existed, particularly in underdeveloped regions. Moreover, a small number of experts are able to use the software due to the complexity of modelling (Feng et al., 2015). It wasn't until 2023 that the national association of building energy efficiency introduced a voluntary certification course for BEEL assessors, as an integral component of training for NZEB standards (mentioned by #I5). Furthermore, Yu et al. (2019) claimed that the assessment software should be enhanced to ensure its comprehensiveness and consistency.

India

The national Bureau of Energy Efficiency (BEE) introduced the voluntary residential building energy labelling program in 2019, for new and existing buildings (Bureau of Energy Efficiency, 2023a). The scheme is designed to facilitate the implementation of the building energy code, EcoNiwas Samhita. The label consists of 1-5 stars (from low to high) that are awarded based on the energy use intensity in four different climate zones. A 5-star rated building is 40% more energy efficient than a 1-star building. The BEE provides an online platform to facilitate the labelling program, including an online simulation tool to calculate energy consumption. Building owners can directly apply through the platform. New buildings receive an initial "Applied For" label valid for three years. Both new and existing buildings receive a final label, valid for five years, upon completion. The BEE conducts random/stratified sampling of the technical details and data submitted to BEE, along with random on-site inspections. The BEE may also appoint an independent third party to assist in the overall implementation of the program (Bureau of Energy Efficiency, 2023b).

Table 3 summarizes the policy intensity of building information disclosure in each region. Across all three regions, building energy labelling applies to both new and existing buildings, with a focus on energy use intensity. Notably, the EU label includes recommendations for energy renovation, aiming to provide building owners not only with information about energy performance but also guidance on necessary actions. However, if recommendations are limited to low-cost options, as frequently observed in the EU (Thomas et al., 2022), the potential of EPCs to drive deep renovations, crucial for achieving the EU's zero-emission target, could be hindered.

Among these three regions, only the EU mandates building energy labels for residential buildings in case of new build, sale, or lease. In the EU and China, building energy labeling is connected to their respective building codes to varying extents. The EU's EPC exhibits a strong linkage and synergies with the building energy code. In some EU MSs, EPC has been used as a metric and NZEB is indicated in the EPC. The upcoming EPBD is set to use EPC as a standardized metric for both MEPS for non-residential buildings and MEPR for residential buildings across the EU. In China, one of the indicators in labeling, namely the energy-saving indicator, employs the metric of its building code. In India, although the label aims to facilitate the implementation of its code, the exact connection remains unclear.

In all three regions, compliance checks are required both during the design approval and upon completion for new buildings. All three regions have government-accredited software for calculating building energy consumption and typically require on-site inspections. In China, an additional measurement and evaluation are mandated one year after occupancy. However, while on-site inspections and post-occupancy measurements could enhance compliance, the associated high costs might lead to low acceptance of the labelling.

The EU takes the lead in assessor qualification, with mandatory or voluntary training provided in most MSs. In China, the issuance of labeling is centralized in a small number of accredited institutions. The calculation of building energy consumption is complex, and there is a notable absence of certification and training programs for assessors. In India, the national agency BEE oversees compliance checks and may appoint independent assessors, with no specific qualification programs defined. To scale up the labeling program, the burden on BEE could become overwhelming as the major assessor.

Financial incentives

To assess the policy intensity of financial incentives (Table 4), we analysed the following measures. First, we examined the scope of the financial incentives regarding the types, supported interventions, and the target group. In terms of interventions, we also analyse if fossil-fuel heating and cooking are supported. Second, to incentivize actions beyond business-as-usual practices, financial incentives can be tied to the energy efficiency level of projects. Thus, to evaluate the objectives, we analysed if the financial incentives promote deep renovations or highly energy efficient new construction. Additionally, low-income households often face both a significant energy cost burden and financial constraints preventing them from undertaking energy retrofits and transitioning to low-carbon heating, cooling, and cooking technologies. Thus, targeted financial incentives for this group is essential for building decarbonisation. Third, to ensure long-term success, it is crucial for financial incentive programs to maintain continuity and stability, providing market actors motivations for sustained investment in building decarbonization initiatives. Thus, continuity of the funding program was assessed for implementation.

Table 4 Policy intensity assessment of financial incentives in the EU, China, and India
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EU

Our meta-analysis (Enerdata, n.d.; Braungardt et al., 2022; Economidou et al., 2019) reveals the EU has implemented subsidies, tax incentives, and soft loans for residential energy renovation (both single components and overall renovation) and low-carbon heating systems. Subsidies have been extensively adopted across all MSs. Besides, national tax incentives, including tax deduction from income, tax credit for investment costs, reduced sales taxes, play a pivotal role in decarbonizing residential buildings in 11 MSs. Moreover, soft loans and loans are available for residential buildings in 16 MSs. However, it is worth noting that there are still ten MSs providing fundings for fossil fuel boilers. As agreed upon in the EPBD recast, the MSs “should not provide, from 2025, financial incentives for the installation of stand-alone boilers powered by fossil fuels”Footnote 3

136 out of 142 national programs reviewed are tied to longer-term commitments of over five years. In nine MSs, incentives, mainly in the form of subsidies with a few cases of tax incentives and soft loans, have effectively stimulated deep renovations. Seven MSs have designed financial incentives that are linked to energy efficiency levels of renovation, i.e., the higher the energy efficiency, the higher the incentives.

Furthermore, a closer examination reveals that 14 MSs have implemented targeted national incentives, specifically aiming at supporting low-income households. These initiatives encompass a variety of strategies, including subsidies for the replacement or installation of inefficient heating systems, comprehensive renovation projects, the purchase or construction of energy-efficient housing, and the provision of energy advice.

China

The National Pilot Program of Clean Heating launched in 2017 subsidizes upfront energy retrofit costs, as well as expenses for clean heating and cooking equipment and fuel, supported by National Air Pollution Prevention and Control Fund. This Fund is renewed annually and allocated to specific pilot cities (Ministry of Finance P.R.China, 2023). Local governments are mandated to contribute matching funds. Between 2017 and 2021, over 60 pilot cities received more than RMB 62 billion (approx. USD 8.6 billion) (Environmental Planning Institute of MEE, 2022). However, in rural areas, a notable proportion of the subsidy had been directed towards substituting coal and traditional biomass with clean heating sources. Only 12.4% of the subsidies were allocated to building fabric energy retrofit, resulting in limited energy renovation progress (National Energy Information Platform, 2021). Additionally, due to the recognition of natural gas as a clean fuel, the purchase of natural gas boilers and associated usage have received partial subsidies (Beijing Sustainable Development Promotion Association & Zhongke Huayue ERI, 2021). Consequently, by 2022, around 52% of households in the northern plain region (approximately 25 million) have transitioned from coal to natural gas (Environmental Planning Institute of MEE, 2021). Furthermore, due to required local matching contributions, it is underscored that a considerable financial burden at the local level, with specific regions currently struggling to sustain these subsidies (stated by I#2, I#3, I#4)

Regarding new buildings, as presented earlier, the national government has not allocated specific funding. Instead, it has encouraged local governments to formulate their own financial incentives. As of 2020, seven provinces and 13 cities have released incentive programs. Data indicate that subsidies to developers have been implemented across all provinces. Another commonly used incentive instrument is the reduction of floor area ratio (FAR)Footnote 4, where higher FAR results in higher payments required from developers for land use. Four cities have preferential loan policies for purchasing residential ULEBs (i.e., increasing loan ratio) and one province and five cities have promoted low-interest green loans for developers. Tax incentives for buyers were found in one province and one city and target owners of non-residential buildings (CABR, 2020).

For energy efficient appliances and equipment (except heating), the national government stopped subsidies since 2013 (People, 2013). However, in an action plan for boosting domestic consumption released in 2019, the national government encouraged local governments to provide subsidies for highly energy-efficient appliances, with the ambitious target of selling 150 million such appliances by 2021 (Government of China, 2019). Accordingly, implementation plans were issued by 24 provincial governments. There is no comprehensive evaluation of provincial promotion publicly available.

India

The national government doesn't provide direct subsidies but mandates local authorities to encourage green building projects of over 3000 m2, rated by "Green Rating for Integrated Habitat Assessment" (GRIHA), by granting 1%-5% extra ground coverage and FAR based on the rating (GRIHA, 2023). For cooking, the "Pradhan Mantri Ujjwala Yojana" (PMUY) was launched in 2016 and remains active, which aimed to release 8 Crore LPG Connections to the deprived households by March 2020 (PMUY, 2023b). To support this initiative, the government also implemented direct benefit transfers for LPG (DBTL) as subsidies to assist households in purchasing cooking gas refills. Between 2016 and 2022, Rs 20227 crore (approx. USD 2.4 billion) and Rs 96044 crore (approx. USD 11 billion) have been provided to LPG connections for poor households and DBTL, respectively. As a result, the target of PMUY was achieved. The LPG coverage has increased from 62% in 2016 to almost 100% in 2023 (PMUY, 2023a).However, it is important to note that PMUY solely covers 50% of initial costs, with oil marketing companies extending loans to households for the remaining amount. Households repay these loans by paying the full market LPG price with DBT subsidy until the debt is cleared (CEEW, 2020).

Our findings reveal the distinct types of financial incentives deployed across the three regions. The EU MSs have demonstrated the most comprehensive use of economic instruments for promoting energy renovation and low-carbon heating solutions, with subsidies serving as the primary means, while soft loans and tax incentives are also implemented in a number of countries. In contrast, China heavily relies on subsidies as the main financial instrument for energy retrofits and clean heating in residential buildings at both the national and local levels and for purchasing highly energy-efficient appliances at the local level. Preferential loans have targeted new buildings, but to a very limited extent at the local level. India, on the other hand, has primarily subsidized the transition to clean cooking using LPG. Besides direct funding, a form of indirect subsidies through land use award are observed in China and India.

Subsidies appear to be the most common incentive type in all three countries, which can place a significant burden on public budgets, as observed in our China example of local budget depletion. Moreover, while they stimulate investments in building envelope improvements and clean heating and cooking at an early stage, their effectiveness in driving large-scale investment may be limited in practice (Bertoldi et al., 2021). Preferential loans for building decarbonization, capable of leveraging subsidies and facilitating large-scale investments, have gained popularity in the EU. However, their implementation remains limited or absent in the other two countries. In China, despite the government's recognition of the advantages of green loans, their widespread implementation in decarbonizing residential buildings faces constraints due to factors such as consumers' limited awareness of financing options and economic constraints, companies' uncertain sources of repayment and lack of collateral, financial institutions' limited knowledge of building decarbonization projects, as well as trust in small- and medium-sized enterprises operating within this domain(claimed by I#3, I#4, I#5).The implementation of tax incentives, which can reduce the costs of energy efficiency measures, is only observed in several EU MSs. The absence of such incentives in other EU MSs, China, and India can be attributed to complexity of assessment and capabilities of tax authorities.

Across all three regions, financial incentives are still found for installing fossil fuel heating or cooking. In China and India, households receive subsidies for fossil fuel running costs (natural gas and LPG) due to their perceived "clean" attribute compared to coal and traditional biomass. The presence of these financial incentives is not in line with net-zero emission pathways, as it perpetuates reliance on fossil fuels and hinders transition to low carbon heating and cooking. On top of that, China relies heavily on natural gas import and India on LPG. Financing fossil fuel use in buildings could further increase the dependence on import, which acts as a threat to energy security.

Moreover, measures to support low-income households are found in all three regions, primarily through subsidies, but these measures exhibit limitations in terms of scale and scope. For example, funding for improving building fabric has been very limited in rural China and is completely absent in India, potentially resulting in high energy consumption for heating and cooling. Addressing this issue should be a top priority to ensure the affordability of heating and cooling for these vulnerable households. Moreover, subsidies for fossil fuel-based heating and cooking systems could worsen energy poverty by tying households to high fossil fuel prices. In China, for instance, the surge in gas prices has resulted in a substantial rise in heating costs when transitioning from coal or traditional biomass to natural gas, even in the presence of gas usage subsidies (He & Li, 2021). In India, given the low income of PMUY households, the 50% upfront cost subsidy, coupled with inadequate DBTL for subsidizing LPG use, is argued to present affordability challenges (Gould et al., 2023).

The divergence is also reflected in the targeted energy efficiency levels of financial incentives across these regions. In the EU, a limited number of MSs have adopted financial incentives encouraging deep renovation efforts and aligning funding with energy efficiency levels of renovation. In China, financial incentives that directed towards highly energy-efficient new buildings are found in a few provinces, but with no corresponding incentives for deep renovations. India's approach centres on green buildings, with energy efficiency being just one aspect of the rating, indicating a dearth of dedicated support for achieving high energy performance. Thus, there is an insufficient or lack of attention given to energy efficiency levels in the financial incentives across all three regions, potentially leading to missed opportunities for higher energy savings. Additionally, this may contribute to higher running costs, posing affordability challenges for low-income households.

Last but not least, across all three regions, financial incentives have been mostly implemented continuously. However, in China, the depletion of local budgets for matching funding may jeopardize program continuity. This limitation could deter low-income households from adopting energy renovation and low carbon heating measures (told by I#3). In fact, due to the high running costs and limited subsidies in some regions, rural households have reverted to coal for heating (He & Li, 2021).

Conclusion

This paper conducted a systematic analysis of residential building decarbonization policies in three major economies: the EU, China, and India.

The focus of policies in these three regions varies due to their distinct socio-economic development, climate, building stock status, energy usage, and thus technology pathways. The EU concentrates on improving the existing building stock while imposing stringent requirements for new buildings. India's policies mainly target new buildings, whereas China's address both new and existing building stocks. Regarding energy usage, space heating is the primary focus of EU policies, while India emphasizes cooking and cooling, and China addresses both heating and cooling. The policy mapping exercise revealed that all three regions have implemented a mix of policies aimed at decarbonizing their residential building stocks. The EU and its MSs have a long history of implementing building energy efficiency measures, which began as a response to the 1973 oil embargo (Economidou et al., 2020). It boasts a diverse array of policy instruments, particularly in the realm of governance and planning, including EEOs, overarching cross-sectoral funding programs, and carbon pricing for fuels used in buildings. China, on the other hand, initiated its journey toward building decarbonization with the development of building energy codes for residential buildings in the 1980s. Over the years, it has expanded its policy toolkit to cover all climate zones, incorporating various policy instruments. In contrast, India has started developing building energy efficiency policies more recently. Its predominately tropical and sub- tropical climate has resulted in a limited need for heating. This in turn delayed the formulation of comprehensive building energy efficiency policies. The absence of a building decarbonization roadmap with ambitious targets and a defined timeline for achieving a net-zero building stock remain a significant political barrier in India. The development of such a roadmap will require robust data and quantitative modelling support, which are currently lacking. Despite the long-standing implementation of energy efficiency policies in the EU and China, both regions face a persistent challenge in the form of fossil fuel price-distorting subsidies in their residential sector. Additionally, China's low area-based residential heating prices present a notable barrier to energy efficiency investments. The policy packages in the EU, while extensive, seem to fall short in addressing these and other barriers. This is evident in the fact that rates and depth of energy renovations still fall considerably short of harnessing the cost-effective potential and achieving the necessary pace for decarbonization by 2050. China also has an extensive policy package in place. However, the heavy reliance on regulatory actions and subsidies across various policy domains, including buildings, together with the limited scope of building stocks targeted by these policies, renders the policy package insufficient to effectively decarbonize buildings and achieve the climate goals set for 2060.

As a next step, we conducted a detailed analysis of building energy codes, information disclosure, and financial incentive schemes in the three regions. We used the policy intensity analytical framework introduced by Schaffrin et al. (2015). This framework enables systematic analysis of policy design and allows for comparison across countries. While it has previously been utilized to evaluate climate policy innovation and renewable energy initiatives, our study marks its first application in the building sector. Our findings demonstrate that this framework is well-suited for analyzing individual policy instruments aimed at residential building decarbonization. We observed variations in ambition, scope, and implementation, even when similar policy instruments are employed. Building energy codes are fundamental for building decarbonization. The EU and China have made significant advancements, particularly in terms of code stringency and compliance checks. The EU stands out with its ambitious, mandatory code covering both new and – conditional on major renovation of existing buildings, and promoting higher energy efficiency through a performance-based approach. While China has continuously increased code stringency, its roadmap towards achieving net-zero goals remains less ambitious. To achieve a net-zero building sector in China, mandating building codes also for rural areas and existing buildings is essential. It is underscored by the fact that rural areas account for over 45% of residential building energy consumption and the rising importance of energy use in existing building stocks. Furthermore, employing a performance-based approach or a hybrid combination of performance and prescriptive methods is advisable, as it has the potential to yield higher energy efficiency. Both the EU and China exhibit high compliance rates for new buildings. In contrast, India's implementation of residential building energy codes progresses at a relatively slow pace, which stands as a significant obstacle to its journey towards net-zero. This limitation is not only due to design features (e.g., voluntary code, weak compliance check) but also associated with India's governance structure. Although formulated by the national government, the adoption process is decentralized, governed by the States/Union Territories. Implementation involves collaboration between central and designated agencies at the state level. Consequently, the deployment of the code hinges on adoption at the state level and inter-ministerial cooperation.

All three regions have introduced residential building energy labelling. The EU boasts the most advanced policy in this regard, although improvements are necessary for greater effectiveness in driving zero-emission buildings and deep renovations (Li et al., 2019). In China, challenges such as the voluntary labelling, costly procedures, calculation complexity, and lack of qualified assessors have hindered widespread implementation. In India, apart from issues related to voluntary labelling and assessor qualifications, low stakeholder awareness has proven to be a significant barrier.

While financial incentives for decarbonizing residential buildings exist in all three regions, they fall short of facilitating net-zero building transformation. These incentives are predominantly in the form of subsidies, potentially straining public budgets. Additionally, financial incentives specifically aimed at promoting net-zero new construction and deep renovation hold the potential to mitigate the higher initial costs associated with these projects and expedite the transformation of the market. However, our analysis across all three regions reveals a marked deficiency of such financial incentives.

While this paper has provided valuable insights into building decarbonization policies in three major economies, it is important to acknowledge certain limitations. Specifically, this study did not delve into the critical realm of embodied energy and embodied carbon in building materials, which gain increasing significance in building GHG emissions as building energy demand decreases. It accounted for approximately 50% of the overall carbon emissions in new buildings (Cabeza et al., 2022; World Business Council for Sustainable Development & ARUP, 2023). Furthermore, the scientific community has recognized the multifaceted role of buildings within the energy system, encompassing their roles as consumers, generators, and flexibility providers, extending from individual buildings to district-level systems (Economidou et al., 2020). Future research should systematically analyse policies that foster these dimensions, going beyond the conventional focus on energy efficiency during operational phase and single sector perspectives. In the context of the EU, it is crucial to acknowledge that building decarbonization efforts have been partly offset by the increasing demand for floor area (EEA, 2023). Addressing this challenge requires sufficiency measures, which involve “optimisation of the use of building, repurposing unused existing buildings, prioritising multi-family homes over single-family buildings, and adjusting the size of buildings” (Cabeza et al., 2022). Research on this mitigation strategy remains limited (Thomas et al., 2019). Besides, while sufficiency concerns may currently have a lesser impact in developing economies, their significance is likely to rise with rapid economic development. Therefore, exploring and evaluating sufficiency policies tailored to diverse countries will be a crucial avenue for future research in the field of building decarbonization.