What is Germany's pathway to limit global warming to 1.5°C?

Buildings

Decarbonising the buildings sector

Energy related GHG emissions from buildings accounted for around 15% of Germany’s total emissions in 2023 (or 105 MtCO₂e). Emissions from buildings have fluctuated in recent years, but overall reductions have been too slow to meet Germany’s sectoral target under the Climate Protection Act of 67 MtCO2e by 2030 or 68% below 1990 levels.1 Germany’s current policies are projected to reduce GHG emissions to only 80 MtCO2e by 2030, representing only a 23% reduction from 2023 levels.

In 2023, fossil fuels (mainly fossil gas and oil) still provided just over half of Germany’s buildings energy needs, particularly for space heating and hot water. Electricity and heat supplied 28% and 8% of heating and cooling demand respectively, with biomass providing 11%.

Reductions in buildings emissions in recent years have been partly driven by milder winters, improvements in energy efficiency and behavioural changes following high energy prices triggered by the Russian invasion of Ukraine. However, progress in decarbonising buildings has been inconsistent and insufficient, with heat pump deployment slowing in 2024 but recovering slightly in 20252 and renovation activity declining,3 indicating that the structural drivers of decarbonisation are not yet scaling at the pace required to align with 1.5°C.

Germany's  energy mix in the buildings sector

petajoule per year

Scaling

Fuel shares refer only to energy demand of the sector. 

Under the Highest Possible Ambition (HPA) scenario, CO2 emissions need to fall to 66 MtCO2e by 2030, or 37% below 2023 levels. This is comparable with Germany’s target under the Climate Protection Act.4 Germany’s building sector would need to rapidly accelerate its electrification, particularly electricity-based heating (heat pumps) to reach at least 37% electricity in buildings by 2030 and 75% by 2050, up from the 28% in 2023. This rise in electrification would see fossil fuels phased out between 2035 and 2040. Biomass would play an increasing role to ease the transition away from oil and gas, but its share would peak at 23% of the energy mix in 2035 before falling back to 11% in 2050.

Increasing electrification will further improve energy efficiency in buildings, reducing overall sectoral energy demand by 26% below 2023 levels in 2030, and by 60% below 2023 levels in 2050. Compared to a business-as-usual situation, this would remove the need for additional and costly fossil fuel imports, ensuring energy security but also lower energy bills.

Electrification will only deliver a portion of the efficiency gains possible in the buildings sector. Improving the energy performance of buildings through energy efficiency renovations will be crucial to limit energy demand. Between 2021 and 2023, private and public investments into energy efficiency renovations increased by EUR 60 bn to EUR 72 bn. In 2024, the German government increased funding to EUR 16.7 bn. Despite recent increases in investments, price adjusted calculations showed that investments into energy efficiency renovations have actually decreased by 7% in 2023 compared to 2013.5

In 2023, Germany amended the Building Energy Act, requiring new heating systems use at least 65% renewable energy from 2024, intending to fully phase-out fossil fuel heating by January 2045.6 The rule applies first to new buildings, while existing buildings have a transition period tied to municipal heat planning between 2026 and 2028, and new gas boilers remain temporarily permitted if compatible with renewable gases such as hydrogen or biomethane. Hydrogen has no space in buildings because it its costly and less efficient to already proved electro-technologies such as heat pumps. As of May 2026, the government is further delaying the implementation of the Building Energy Act due to internal disputes.7 No new measures were introduced to phase out existing use of fossil fuels in the sector. Prolonging the use of existing fossil fuel boilers and the sale of new ones will push Germany further away from its own sectoral climate targets, which are already not aligned with the HPA scenario. In doing so, the German government, is making the transition of the building sector more costly for the country.

The 2026 “Klimaschutzprogramm” lacked concrete measures targeting building decarbonization. The government will increase the federal funding for efficiency heating networks to EUR 2.7 bn by 2030, an increase of only EUR 400 mn. Indirectly, the plan will also allocate financing to reduce electricity prices, which will help make heat pumps and other electro-technologies more attractive for consumers.8

Germany's buildings sector direct CO₂ emissions

MtCO₂/yr

Direct CO₂ emissions only are considered (see power sector for electricity related emissions, hydrogen and heat emissions are not considered here).

1.5°C compatible buildings sector benchmarks

Direct CO₂ emissions and shares of electricity, heat and biomass in the buildings final energy demand from 1.5°C pathway based on the HPA scenario for Germany

Indicator
2023
2030
2035
2040
2050
2060
2070
Buildings sector decarbonised by
Direct CO₂ emissions
MtCO₂/yr
104
66
35
18
12
8
4
2066
Relative to reference year in %
-37%
-66%
-83%
-88%
-92%
-96%
Indicator
2023
2030
2035
2040
2050
2060
2070
Share of electricity
%
28
37
51
65
74
77
81
Share of heat
%
8
9
13
15
14
18
17
Share of hydrogen
%
0
0
0
0
0
0
0

All values are rounded. Direct CO₂ emissions only are considered (see power sector analysis, hydrogen and heat emissions are not considered here). All values are rounded. The year of full decarbonisation is based on a carbon intensity threshold of 5gCO₂/MJ.

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