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Abstract In European countries, buildings are the major energy consumers due to the general low energy performance of the existing building stock. To achieve the ambitioned targets for emissions reduction, it will be necessary to take actions for its large scale renovation. However, today's standards are mainly focused on new buildings, guiding the improvement of the energy performance of the existing buildings into expensive processes and complex procedures that seldom are accepted by users, owners or promoters. For these buildings, the range of technical solutions is shorter and may lead to ancillary works that result in a relevant increase in costs. In this context, the IEA EBC Programme launched the Annex56 project, with the goal of investigating solutions and produce guidance suitable for European residential buildings, taking into consideration not only the benefits related to energy and emissions reduction, but also the added value resulting from the renovation process. Considering the goal of reducing emissions, measures that promote the use of renewable energy can be as effective as energy efficiency measures, therefore, it is important to determine the optimal balance between the minimization of energy demand and the use of renewable energy. The optimization process has to explore the full range of cost-effective reduction of emissions and energy use and also to take into account the additional benefits and the overall added value achieved by the building within the renovation process as well as the increasing relevance of the embodied energy associated to the materials and systems used in the interventions. Highlights • The need for a new approach to energy related building renovation is described. • Cost-effective balance between energy efficiency, renewable energy and overall added value. • Cost-effectiveness and cost-optimality are compared considering climate change mitigation. • Recommendations are delivered for policy makers and professional owners. [ABSTRACT FROM AUTHOR]