Decarbonizing buildings: TerraWater takes stock of twenty years of public policies

In a note entitled "Energy renovation, a priority for the climate?" , the TerraWater Institute questions the hierarchy of public policies conducted since the beginning of the 2000s. The think tank believes that the substitution of fossil fuels should have preceded efforts devoted to reducing energy consumption.

This analysis is complemented by the report "Accelerating the electrification of buildings" , which formulates twenty proposals to contribute to achieving the objectives of the third National Low Carbon Strategy, without increasing public spending according to its authors.

The result of nearly six months of work conducted between spring 2025 and spring 2026, this report compiles and contextualizes data previously scattered among government agencies, energy companies, industrial sectors, and specialized organizations. Its objective is to inform public policy choices and identify levers likely to accelerate the reduction of building emissions by 2030.

"The priority question should always have been: how should the building sector move away from fossil fuels, at what speed and in what order of priority should the different possible strategies be given? Our work aims to establish these trade-offs solidly and precisely, based on rigorous, consistent and readable data," explains Myrto Tripathi, Director General of the TerraWater Institute.

A cross-sectional reading of the available data

The report does not produce new data, but gathers and puts into perspective information that has so far been distributed between administrations, energy companies, specialized organizations and industrial sectors.

It draws on the work of the Data and Statistical Studies Department (SDES), Citepa, the Center for Economic Studies and Research on Energy (Ceren), RTE, Ademe, Anah, CSTB, Insee, the Court of Auditors, and the Council of Economic Analysis. Data from GRDF, Enedis, Fedene, Uniclima, and several departments of the Ministry for Ecological Transition are also taken into account.

This consolidation focuses in particular on heating equipment, heat networks, renewable heat, refrigerants, energy saving certificates and the characteristics of the building stock.

The priority given to energy renovation is being called into question.

Since the early 2000s, energy renovation has become one of the main levers of climate policy applied to buildings. Public programs have thus focused on reducing consumption through insulation and improving the energy performance of housing.

The TerraWater Institute, however, believes that phasing out fossil fuels should have been a priority. It therefore recommends starting by electrifying uses currently powered by gas, heating oil, or LPG, before maximizing the gains achieved through energy-efficient renovations.

In this approach, electrification and renovation are not opposed, but are part of a different sequence: quickly replacing fossil fuel equipment, then progressively improving the performance of the building stock.

A broader emissions scope

To measure the building sector's contribution to French emissions, the report distinguishes between thermal uses—heating and domestic hot water production—and other energy consumption. It also links emissions to the equipment that generates them and estimates that nearly 13 million fossil fuel boilers are still in operation in France.

The analysis also incorporates emissions associated with wood energy and reconstructs the evolution of emissions from the sector since 2010. It thus seeks to measure the respective effects of several factors:

• the replacement of oil-fired boilers;
• improving the energy performance of buildings;
• efforts towards sobriety;
• the evolution of climatic conditions;
• the development of heat networks;
• emissions related to refrigerants.

According to the scope defined by TerraWater, buildings account for 24% of French territorial emissions, with 20% of that coming from heat production related to heating and domestic hot water. This method leads the Institute to present building heating as the second largest source of CO2 emissions in France, after transportation.

Electrification presented as a priority lever

According to data collected by the Institute, heating accounts for 55% of French natural gas consumption, 77% of wood consumption and 8% of petroleum product consumption, including fuel oil and LPG.

TerraWater therefore believes that the electrification of heating and cooling systems must be a central focus of decarbonization policies. This development will nevertheless need to take into account peak winter consumption, the quality and sizing of equipment, and the capacity of the electrical grid.

The report also highlights the need to adapt the regulatory frameworks applicable to new and renovated buildings. According to its analysis, buildings already account for approximately 70% of French electricity consumption.

Twenty proposals structured around four priorities

The twenty recommendations formulated by TerraWater aim to remove the technical, regulatory, legal and financial obstacles that slow down the electrification of the building stock.

They are organized around four main orientations:

• to mobilize resources enabling the rapid electrification of fossil fuel uses;
• evaluate energy renovation operations based on their actual cost per tonne of CO2 avoided;
• develop the supply of heat pumps and the capacities of the sector;
• strengthen the responsibility of property owners and local authorities.

For the Institute, the objective is not to increase public funding, but to improve the climate and economic efficiency of the resources already mobilized.

A lesson for transition policies

Beyond the building itself, TerraWater calls for a clearer distinction between defining public objectives and choosing technical solutions. According to the Institute, public officials must establish collective trajectories and constraints, while the evaluation of the resources to be mobilized must be based on their climate and economic effectiveness.

The think tank also believes that the results of renovation policies implemented over the past twenty years should serve as lessons learned for future energy transition strategies. It specifically calls for better prioritization of actions based on emissions avoided, their cost, and their speed of implementation.

Image illustrating the article via Depositphotos.com.