The buildings sector is responsible for 37 % of global final energy consumption and nearly 40 % of total direct and indirect CO2 emissions. This has led to promoting renovation efforts to decrease operational emissions of the existing building stock. With decreasing operational emissions, embodied emissions are becoming more important. In new buildings, embodied emissions account for about half of total emissions through the life cycle of a building. If both embodied and operational emissions are considered, renovation often outperforms new constructions, due to high embodied emissions of the structure - especially solid construction with a basement. Based on this, the decision if a building should be renovated or replaced is often not straight forward and depends on various factors. In this paper, a typical German building was considered as a case study, for which both renovation and replacement scenarios were considered, to identify the optimal solutions in terms of overall energy consumption and CO2 emissions of the building in the use phase, the environmental impacts of the building along its entire life cycle, and related costs. Results show that the lowest CO2 emissions during the lifetime of the analyzed building can be achieved with a sustainable replacement building (-2.05 kg CO2/m2/year) by using a heat pump with ground collector coupled with PV. This allows, compared to the existing reference building, reductions of 97 % and 101 % in terms of energy consumption and CO2 emissions, respectively; while natural gas-based technologies are the least targeted and the most volatile to fuels’ prices changes over the years.