Energy and smart cities

About 75% of Europe’s population live in cities. Urban areas therefore contribute significantly to the EU’s energy consumption and greenhouse gas emissions. At the same time, cities are the main drivers of the EU’s economy, supporting economic growth and jobs.

Several EU policies promote more sustainable, healthy and competitive urban areas. The European Green Deal sets out targets and actions to help deliver secure, affordable and clean energy for EU citizens and businesses. With a focus on buildings renovations, the Energy Performance of Buildings Directive promotes the integration of smart technologies in buildings to increase their energy performance and efficiency. Since 2016, the Urban Agenda for the EU brings together EU countries, the Commission and other stakeholders to stimulate growth and innovation in Europe's cities and to tackle social challenges.

Research and innovation is key to achieving the EU's energy and climate objectives in cities. The Strategic energy technology plane (SET Plan) supports the most impactful technologies in the EU's transition to a carbon neutral energy system and fosters cooperation among EU countries, companies and research institutions.

Smart Cities Marketplace

The Smart Cities Marketplace serves as a hub for pivotal practical knowledge, capacity building support and the facilitation of finance. The hub works across areas such as sustainable urban mobility, districts and built environment, citizen focus and integrated infrastructures and processes in energy, ICT and transport. Through its 'Explore-Shape-Deal' process, the initiative has been able to match approximately 130 projects with financing opportunities of more than €615 million in private investments.

Besides supporting the roll-out of sustainable smart city solutions, it aims to improve citizens’ quality of life, increase the competitiveness of EU cities and companies and contributes to reaching the EU energy and climate targets.

Horizon 2020 Smart Cites & Communities Lighthouse programme

The Lighthouse projects were funded through the Horizon 2020 Smart Cities and Communities programme, with the objective of bringing together cities, industry and citizens to demonstrate scalable solutions and business models to create measurable benefits in energy and resource efficiency, new markets and new jobs.

The Scalable Cities secretariat is in charge of supporting the participating cities with outreach and communication as well as harvesting the results for further replication and upscaling via the Smart Cities Marketplace’s Matchmaking process.

Covenant of Mayors for Climate and Energy

Launched by the Commission in 2008, the Covenant of Mayors for Climate and Energy brings together local and regional authorities who voluntarily commit to implementing the EU’s climate and energy objectives on their territory. Currently, the community includes close to 11 000 signatories who work on the development of sustainable energy and climate action plans in a joint effort to keep the global temperature rise below 1.5℃, reduce greenhouse gas emissions by 55% until 2030, strengthen the resilience of local and regional communities with access to affordable, secure and sustainable energy, and alleviate energy poverty. The Covenant of Mayors office is operated by a consortium of city networks.

The Cities Heat Detox

In June 2024, the Covenant launched the Cities Heat Detox campaign. It encourages cities to sign up and contribute to detoxifying heating and contribute to the global fight against climate change.

Horizon Europe mission on climate-neutral and smart cities

In April 2022, 112 cities were selected to participate in the Horizon Europe 100 climate-neutral cities by 2030 mission to promote system innovation across the entire value chain of city investment. It targets sectors including governance, transport, energy, construction and recycling. Through digital technologies, it allows participating cities to become innovation hubs, with the view that all European cities will follow suit by 2050.

For energy, the mission sets as starting point on the way to 2030 improvements in clean and sustainable urban mobility, near-zero or positive energy buildings and green energy production.

Participating cities were invited to prepare ‘climate city contracts’ outlining their plan for achieving climate neutrality across all sectors by 2030. Following a positive review of these contracts, 10 cities were awarded an ‘EU mission label’ in October 2023, intended to facilitate better access to EU, national and regional funding and financing sources, particularly private investment. Another 23 cities received the label in March 2024 and 20 more in October 2024, bringing the total number of cities with a EU Mission Label to 53.

Cities that have achieved the label can take advantage of the ‘Climate City Capital Hub’, an international financing resource, launched by the Commission in June 2024. It enables cities to access financial advice in cooperation with advisory services of the European Investment Bank, structure their financial needs and introduce projects to a range of lenders and investors from the public and private sectors including through philanthropic and corporate capital, crowdfunding and sustainability-linked bonds.