Global progress on conversion to renewable heat has been limited

Heat is the world’s largest energy end use, accounting for almost half of global final energy consumption in 2021, significantly more than electricity (20%) and transport (30%). Industrial processes are responsible for 51% of the energy consumed for heat, while another 46% is consumed in buildings for space and water heating, and, to a lesser extent, cooking. The remainder is used in agriculture, primarily for greenhouse heating. Global heat demand declined by 2% in 2020, primarily due to the curtailment of economic activity as a result of the Covid-19 pandemic, while renewable heat consumption increased by over 3.5% year on year.

More than a quarter of global heat consumption takes place in People’s Republic of China (hereafter ‘China’) – almost 70% of which is for industry – while the United States, the European Union, India and the Russian Federation (“Russia”) together account for another 35%.

The supply of heat, which contributed more than 40% (13.1 Gt) of global energy-related CO2 emissions in 2020, remains heavily fossil fuel dependent, with renewable sources (including traditional uses of biomass) meeting less than a quarter of global heat demand in 2020 – a share that has remained static during the past three decades. Excluding ambient heat, for which limited data are available at the global scale,1 as well as traditional uses of biomass, modern renewables2 contributed only 11% (23 EJ) of the energy used for heat in 2020, up from 10% in 2015.

Renewable and non-renewable heat consumption and heat-related CO2 emissions in industry, 2010-2020


Renewable and non-renewable heat consumption and heat-related CO2 emissions in buildings, 2010-2020

Outlook to 2026

Considering the policy landscape as of September 2021, global heat demand is projected to expand by 17 EJ during 2021-2026. This increase of almost 9% is about three times larger than that during the decade 2011-2020. The industrial sector accounts for almost all of this growth, half of which occurs in China and India. Traditional uses of biomass are anticipated to decline slightly by 1.7 EJ (down 7%) over the outlook period, mostly in China and India, driven in part by the deployment of improved biomass cookstoves.

Increase in renewable heat consumption by country/region, 2009-2026


Increase in renewable heat consumption by energy source, 2009-2026


Global modern renewable heat consumption is expected to increase at a faster rate than heat demand, expanding by a quarter (an increase of 5.4 EJ)3 in the next five years, with the majority of the growth occurring in the buildings sector. While the share of modern uses of renewables rises from 11% in 2020 to 13% in 2026, these investments fall short of containing non-renewable heat consumption. Fossil fuel consumption for heat is forecast to see a 5% increase in heat-related CO2 emissions over the outlook period, equivalent to 0.6 Gt CO2.

For comparison, to align with the IEA Net Zero Emissions Scenario, renewable heat consumption would have to progress 2.5 times faster, combined with wide-scale behavioural change and much larger energy and material efficiency improvements in both buildings and industry.

Renewable heat consumption and share of total heat demand in industry, 2014-2026


Renewable heat consumption and share of total heat demand in buildings, 2014-2026


Keeping up with ambitions in the IEA NZE Scenario requires much faster policy action globally in both industry and buildings

In the IEA Net Zero Emissions by 2050 Scenario, the use of modern renewable heat in buildings expands twice as fast as in our outlook, and almost three times as fast in industry.

The largest discrepancies are seen in modern bioenergy use, with additional growth of 5.1 EJ during 2021-2026 under the Net Zero Emissions Scenario compared to our outlook, almost evenly split between the industrial and buildings sectors. In industry, this gap comes primarily from greater use of municipal solid waste in the cement subsector, and greater reliance on on-site residues for pulp

and paper industries in the Net Zero Emissions Scenario. In buildings, the wider rollout of improved biomass cookstoves enables further substitution of traditional uses of biomass.

Assuming both more rapid penetration of renewables in power generation and greater electrification of heat through heat pumps and direct electric processes (e.g. induction or electric arc furnaces for secondary steelmaking), the Net Zero Emissions Scenario sees thermal uses of renewable electricity in industry expanding twice as fast as in our outlook. In buildings, behavioural changes and envelope retrofits completely offset additional electricity consumption associated with the massive deployment of heat pumps described in the Net Zero Emissions Scenario. The number of heat pumps installed in buildings globally is 50% larger than in our outlook by 2026, expanding to 600 million units by 2030, driven by the introduction of bans on fossil fuel boilers. By 2030 heat pumps meet 20% of energy demand for heat in buildings, up from 5% in 2019 (IEA, 2021c; REN21, 2021).

Direct solar thermal consumption grows more than 2.5 times as fast during 2021-2026 in the Net Zero Emissions Scenario than anticipated in our outlook, a difference of 1.1 EJ. The addition is both from the installation of solar thermal water heaters in buildings and the take-off of solar heat for industrial processes. Accordingly, the number of dwellings using solar thermal systems rises from 250 million in 2020 to 400 million by 2030, and up to 1.2 billion in 2050 (IEA, 2021c).

Finally, the Net Zero Emissions Scenario sees the exploitation of the decarbonisation potential of existing district heating networks far beyond our current projections, with more than a doubling of the share of renewables in global district supplies by 2026. Under these assumptions, renewable district heat consumption needs to grow six times faster than in our outlook, with contributions not only from bioenergy – the largest renewable source for district heat – but also from solar thermal and large-scale heat pumps.

In the longer term the Net Zero Emissions Scenario also sees a growing – yet limited – role for renewable gases such as biomethane and renewables-based hydrogen for heating, in specific contexts, both in buildings and industry. These renewables-based energy carriers can be introduced by progressive blending, taking advantage of existing gas infrastructure, and provided end-user appliances are compatible with blending levels. They can also be used in hybrid systems that combine electric heat pumps with gas boilers.

Beyond highlighting opportunities to expand the supply of renewable heat, the Net Zero Emissions Scenario emphasises the critical importance of simultaneously containing heat demand through behavioural change, material efficiency and energy efficiency. For instance, the scenario’s total global heat demand is 13% lower (9% lower in industry, 18% lower in buildings) than in our current projections for the year 2026. Targeting the substitution of traditional uses of biomass with more efficient cooking and heating technologies is also a critical element of the Net Zero Emissions Scenario to achieve progress towards more sustainable use of renewable sources. An important multidimensional policy gap remains to be addressed to bring heat-related CO2 emissions in line with Paris Agreement ambitions.

Global cumulative heat-related CO2 emissions in the Net Zero Scenario, 2021-2026


Global growth in renewable heat consumption in the IEA outlook and Net Zero Scenario, 2021-2026

  1. While data on ambient heat harnessed by heat pumps are available for member countries of the European Union, data availability is still very limited for other regions of the world.

  2. In this report, “modern renewable energy” excludes traditional uses of biomass. Modern renewable heat covers the direct and indirect (e.g. through district heating) final consumption of bioenergy, solar thermal and geothermal energy, as well as renewable electricity for heat based on an estimate of the amount of electricity used for heat production and on the share of renewables in electricity generation. Although credited as a renewable heat source, ambient heat harnessed by heat pumps is not systematically accounted for in this report, due to limited data availability, especially for the industrial sector. Specific mention is made when ambient heat is included. For the sake of simplicity, “modern renewables” is referred to as “renewables” in the remainder of this report.

  3. This is excluding ambient heat harnessed by heat pumps, for which limited data are available globally, especially in the industrial sector.