Smart Retrofitting of the Building Stock in Germany in order to Achieve CO₂-Neutrality by 2045

Our society is under great pressure of change and has to create a more sustainable future for following generations. The rapid climate change, the fragile overall economic situation, current political events and the ongoing banking and financial crisis require more conscious use of resources and strengthening resilience in the raw materials and energy sectors. Smart Buildings and Smart Retrofitting are a key to the solution.

In order to achieve the goal of climate neutrality by 2045 declared in Germanys Intergenerational Contract, the planning, construction, operation, maintenance and demolition of buildings must be completely rethought and reassessed. There is an urgent need for action, particularly in the area of buildings, district and urban development, as the sector of real estate was responsible for 35,5 % of total energy consumption in Germany in 2022 [1]. The estimates and calculations of how many buildings in Germany will need to be renovated in terms of energy efficiency over the next 15 years are all in the order of 15 to 18 million residential buildings [2]. The Fraunhofer Institute for Building Physics has recently estimated that around 24 million residential buildings in Germany would need to be renovated to become energy efficien [3]. In addition to these residential buildings there are also several non-residential buildings such as daycare centres, educational institutions, hospitals, office and administrative buildings which are not energy efficient and also need to be upgraded. So, in total about 26 million of buildings in Germany are actually not working efficiently. Although non-residential buildings only account for a small proportion of around 15% of buildings, they are responsible for 37% of energy consumption in the building sector and cause about half of the greenhouse gas emissions caused by buildings [4]. In the EU, buildings are responsible for around 40% of CO2 emissions and therefore have great potential to achieve the climate protection targets in future [5].

With an actual renovation rate of 1.0 %/anno and new construction of 295,000 appartements and around 30,000 nonresidential buildings in 2023, it is clear that the climate targets can only be achieved if the real estate stock is taken into account and the renovation rate is increased up to 3.0 %/anno immediately [6]. The order of the day is smart retrofitting, i.e. gradually making the building stock future-proof across the board. What instruments and methods are available for this and what role will politics, business and science play in the future?

Literature Survey.

Political framework

The increasing pressure to act with regard to climate and the security of supply of raw materials and energy has prompted the European Union (EU) to issue guidelines based on the UN’s SDG requirements that focus on sustainability in the construction and use of buildings, in particular the European Directives with respect to Energy Efficiency and Energy Performance of Buildings (EPBD). Its upcoming amendment will also define stricter requirements for existing properties by 2030 through national renovation plans, the introduction of renovation passports and a uniform energy efficiency scale.

Since 2015, the legislator has also been breaking new ground in the area of digitalization in the construction industry and providing impetus to business and science. Not least due to the cost explosion in major public projects such as the Berlin Airport BER, Stuttgart21 or the Elbphilharmonie, the use of IT-supported processes in the planning, construction and operation of public buildings is now mandatory.

The implementation of EU requirements in German law is reflected in the current Building Energy Act (GEG) and the heat transition, as well as in financial incentives through the Federal Funding Act for Energy Efficient Buildings (BEG). In addition, life cycle assessments have become established as part of sustainability assessments, e.g. by the Quality Seal for Sustainable Buildings (QNG).

In the future, the assessment of a building will no longer be based only on energy requirements during the operating phase. Just by considering the entire life cycle can we show how a building’s contribution to the carbon footprint should be assessed. A new instrument is the addition of the “Digital Building Resource Pass” to the energy certificate. Its aim is to create transparency about the materials used, their greenhouse gas emissions and recyclability.

The task of the economy

It is now up to the construction and real estate industry and investors to implement the legal requirements across the board at reasonable economic costs. The key to climate-neutral and sustainable building stock is in the consistent use of digitalization in order to be able to fully exploit optimization potential throughout the entire life cycle of a building with the help of the information stored in digital building models in conjunction with the coupling of operating data, IoT, AI and ML.

The industry’s performance is demonstrated by the completion of numerous smart buildings such as “The Ship”, “The Edge”, “HammerBrooklyn” and the “Cube Berlin”. These lighthouse projects show what is technically feasible today and serve as realworld laboratories. Further impetus for sustainability comes from certificates such as LEED, BREEAM, DGNB and SustainFM. To obtain these, extensive criteria regarding energy efficiency, ecological balance and circular economy must be met by the building and its use.

However, the vast majority of existing buildings and properties are not affected by these developments; a range of other instruments and methods are required here at a level that can be implemented quickly.

One possible approach is the more consistent use of the BIM method and the further development of digital models into digital twins. While the BIM methodology has already found its way into practice in many places in the planning process of complex new buildings and larger renovation projects, digital models are often not maintained in the subsequent phases or are not created at all in the case of smaller projects.

In view of the pressure to renovate, it is now essential that existing properties in particular are digitized. A precise recording and evaluation of the building structure, the system technology and the use of existing buildings is necessary in order to identify sensible renovation concepts, variants through simulations and concrete measures. This also includes the implementation of smart concepts for comparing target and actual energy consumption through constant and comprehensive monitoring of building operations as well as the installation of prefabricated, scalable HVAC modules with sensors, actuators and control.

Assistance from science

In general, the large number of people involved in the construction process shows significant differences in digital affinity. This leads to a loss of information across all phases of planning, construction and operation. In order to involve all stakeholders, it is important to consider the added value of a specific use case for each individual actor, to identify the data and processes required for this from the shared data space and to link them together using standards. This solution-oriented and purpose-oriented approach can ensure that the use of digital models is accepted and used more sustainably throughout the entire building life cycle.

New solutions are also needed for existing buildings in order to exploit all optimization potential during renovations. Since there is usually no digital model and plans, if available, rarely reflect reality, the quick and cost-effective creation of digital models is crucial. Highresolution laser scanners capture buildings quickly and precisely, and AI-supported software for object recognition converts the point clouds into a digital model. In the future, wall structures and their building physics parameters can be determined non-destructively using radar technology. The information obtained in this way flows into the selection of possible renovation measures and simulations, which can provide significantly more precise forecasts of the raw material and energy requirements of a property.

Ultimately, the urgently needed steps towards climate neutrality of the building stock can only be successfully implemented if the necessary qualified specialist staff are available in sufficient numbers.

In order to ensure CO₂-Neutrality in Germany by 2045 it is mandatory that the building stock is taken into account, especially with respect to the renovation rate of existing buildings based on smart retrofitting. Thereby it is crucial that the political as well as scientific and economic framework is linked together and oriented towards the futural challenges.

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1. https://www.umweltbundesamt.de/daten/umweltindikatoren/indikator-energieverbrauch-fuer-gebaeudewie-ist-die-entwicklung-zu-bewerten
2. https://www.fr.de/wirtschaft/nicht-millionen-wohngebaeude-muessen-saniert-werden-aber-die-deutschen-wollen-zr-92547205.html
3. https://www.enercity.de/magazin/unsere-welt/dena-gebaeudereport-2024
4. R Durth (2009) KfW Research, Fokus Volkswirtschaft pp. 269.
5. T Popović, J Reichhard Chahine (2025) Finanzierung von energetischen Gebäudesanierungen, Umweltbundesamt.
6. https://www.destatis.de/DE/Presse/Pressemitteilungen/2024/05/PD24_203_31121.html