Fossil Heating Phase-Out in Existing Buildings

Buildings account for roughly 40% of urban energy consumption and a corresponding share of direct emissions, primarily from burning gas and oil for space heating and hot water. The global building stock is aging — in Europe and North America, 50–80% of buildings predate modern energy efficiency standards. The renovation rate — the share of buildings undergoing energy-efficient upgrades each year — hovers around 1% in most countries. At that pace, it would take a century to renovate the entire stock. Most net-zero plans require at least doubling this rate, but every acceleration attempt runs into the same constraints. The split incentive is the most persistent barrier: landlords bear the capital cost of heating system replacement and insulation, while tenants benefit from lower energy bills. Neither party has the full incentive to act. In rental-heavy urban markets, this alone can stall thousands of conversions. Skilled worker shortages compound the problem. An estimated 60% of construction firms in countries like Switzerland report difficulty finding qualified heat pump installers, insulation specialists, and district heating technicians. Training pipelines are years behind demand. Gas network decommissioning adds a coordination challenge unique to the heating transition. Utilities must shut off gas supply street by street as alternative heating becomes available, requiring years of advance planning and property owner notification. Any gap leaves buildings stranded without heating.