Governance gap: How cities plan for climate neutrality without planning the end of fossil gas

Case study: Barcelona

Barcelona is characterised by dense multi-family housing, a Mediterranean climate and comparatively low space-heating demand (Direcció de Serveis de l’Oficina de Canvi Climàtic i Sostenibilitat et al., 2024).

Table 1 summarises the key characteristics of Barcelona.

Heat supply is predominantly decentralised, with natural gas playing a more modest role than in other European cities, primarily for domestic hot water and cooking. Two decentralised district heating and cooling (DHC) networks operate in specific redevelopment areas, including the 22@ district and Zona Franca. These systems combine gas cogeneration with recovered energy, including waste heat from the Besòs waste-to-energy plant and residual cold from LNG regasification at the Port of Barcelona. Despite their technological sophistication, the spatial coverage of these systems remains constrained, thus failing to effect a fundamental alteration to the city’s decentralised heat structure (Barcelona City Council, 2024; Districlima, 2026).

Gas fulfils a dual function within Barcelona’s heat system. At building level, it is primarily used in decentralised systems for domestic hot water and limited space heating. In contrast, within the two DH networks, gas is used in cogeneration plants that complement recovered energy sources. These distinct functions imply different transition challenges and policy approaches.

Barcelona’s heat transition strategy forms part of its wider climate policy framework. The Plan Clima 2018–2030 prioritises building renovations, energy efficiency measures and the installation of aerothermal heat pumps, as well as the expansion of renewable heat sources, such as solar thermal systems. However, the plan does not define a quantified or time-bound phase-out of natural gas, nor does it outline a decommissioning strategy for gas networks. Central to this are governance constraints: gas infrastructure regulation, tariffs and long-term investment decisions are governed at a national level and implemented by a private network operator (Agencia Estatal Boletín Oficial del Estado, 1998; Ajuntament de Barcelona, 2018; Nedgia, 2025).

The structural characteristics of the building stock further constrain the transition. With approximately 794,000 dwellings, many built before modern thermal standards were introduced, renovation rates remain low. However, the key challenge is less the replacement of gas-based space heating than the substitution of gas used for domestic hot water and cooking. Electrifying these end uses requires significant technical adaptation at the building level (Lowes and Gibb, 2024).

Case study: Budapest

Budapest represents a central-eastern European context characterised by a large, heterogeneous building stock and a historically strong reliance on fossil fuels for heat supply. The key facts about Budapest are summarised in Table 2.

Budapest operates one of the largest DH systems in central Europe (HungaroMet Magyar Meteorológiai Szolgáltató Nonprofit Zrt., 2024). Despite this extensive infrastructure, DH covers only part of the total heat demand. Individual gas boilers remain dominant, particularly in single-family homes and smaller multi-family buildings. Household surveys indicate that natural gas is the primary heating source in over 90% of single-family homes and in around two thirds of multi-family buildings (Gerőházi et al., 2024). Additional, national and sectoral analyses show that Hungary’s DH production continues to rely heavily on gas- and coal-fired combined heat and power plants (Orbán, 2018).

Budapest’s heat transition strategy is embedded in its Sustainable Energy and Climate Action Plan (SECAP) and the municipal climate strategy. These frameworks prioritise energy efficiency improvements, building renovation and the gradual integration of renewable heat sources. Concrete initiatives include the establishment of the Budapest Climate Agency and the Budapest CARES programme, which aim to support deep renovation and the replacement of outdated heating systems in buildings (Tatai et al., 2021). Neither strategy defines a gas phase-out.

Governance constraints play a decisive role in shaping Budapest’s transition pathway. Gas infrastructure, fuel choice, tariffs and long-term investment decisions are regulated at the national level. The gas transmission and distribution networks in Budapest are managed by two state-owned companies (Hungarian Energy and Public Utility Regulatory Authority, 2015; MVM Zrt., 2021).

Renewable and low-carbon heat sources are emerging but remain at pilot scale. Budapest benefits from favourable geothermal conditions, and projects such as the planned geothermal DH system in Zugló are expected to deliver measurable emission reductions. Additional potential has been identified for wastewater heat recovery and large-scale heat pumps, yet deployment remains limited due to high upfront investment costs and regulatory uncertainty (EU Covenant of Mayors, 2024a; Strasszer and Xydis, 2024).

Around two thirds of dwellings were constructed before 1981 and exhibit low thermal performance (Hungarian Central Statistical Office, 2022). Renovation rates remain insufficient due to high costs, fragmented ownership and limited financing (Climate-KIC, 2024).

Case study: Copenhagen

Copenhagen represents a frontrunner case of an early phase-out of fossil gas in urban heat supply. The city is characterised by dense urban development, an exceptionally high penetration of collective heat infrastructure and strong municipal control through publicly owned utilities (Copenhagen Energy, 2021). Table 3 summarises the key issues relating to Copenhagen.

With fossil gas largely eliminated from heating, Copenhagen’s transition strategy focuses on decarbonising an already extensive DH system that serves more than 98% of buildings. Decarbonisation is pursued through a portfolio of waste heat, large-scale heat pumps, geothermal energy and thermal storage, with biomass as a transitional fuel (C40 Cities, 2015; State of Green, 2024b; Vejrup, 2024).

Heat planning has been mandatory in Denmark since the late 1970s, providing a stable institutional framework for coordinated infrastructure development. The City of Copenhagen closely aligns its climate policy with investment strategies of municipal utilities, most notably HOFOR. The Climate Plan 2021–2025 consolidates these arrangements and anchors the city’s ambition to achieve climate neutrality (City of Copenhagen, 2022).

Copenhagen has not pursued the physical decommissioning of its gas network. Instead, the remaining city gas system is being fully defossilised by substituting fossil gas with biogas produced from wastewater sludge and organic waste (Hovedstadsområdets Forsyningsselskab, 2023; Vejrup, 2024).

Despite its advanced position, Copenhagen faces some structural challenges. Permitting procedures for large heat pumps and geothermal installations remain complex and can delay implementation. Public and scientific debate increasingly questions the sustainability of large-scale biomass use, highlighting risks related to land use, imports and long-term climate impacts (Gentili, 2025; Hansen et al., 2020; Schneider et al., 2025).

Case study: Ljubljana

Ljubljana is a mid-sized European capital with a heterogeneous building stock and a mixed heating-system structure (Energetika Ljubljana, 2014, 2018; Statistical Office of the Republic of Slovenia, 2022). Table 4 summarises the most relevant facts about Ljubljana.

DH plays a central role in Ljubljana’s heat supply. Operated by the municipally owned utility Energetika Ljubljana, the system supplies nearly half of all apartments as well as a large share of public and commercial buildings (Buhin et al., 2025; Energetika Ljubljana, 2018). Historically, heat production was dominated by coal-fired units at the TE-TOL combined heat and power plant. In recent years, coal has largely been phased out and replaced by gas, which now provides around 60% of DH output (Berbatović, 2025).

Ljubljana is preparing a further structural shift. A 100 MW biomass heating plant (expected by 2027), alongside wastewater heat, geothermal energy and heat pumps, form the basis of planned supply-side transformation (Buhin et al., 2025; City of Ljubljana, 2024).

The heat transition strategy combines DH decarbonisation with energy efficiency improvements and deep renovation. Public housing has undergone thermal upgrades, and heat pumps are being promoted where technically feasible (City of Ljubljana, 2024; E-institute, 2024).

Governance conditions are comparatively favourable at the local level due to full municipal ownership of Energetika Ljubljana, enabling coordinated planning between the city administration and the utility. However, gas-market regulation, fuel pricing and tariff structures are determined at the national level. Slovenia has not adopted a national gas phase-out strategy (Attorney, 2024; CompanyWall business, 2026).

Case study: Mannheim

Mannheim is an urban centre in southwestern Germany, combining a dense inner city with post-war residential districts and comparatively high heating demand. Table 5 summarises the key aspects relating to Mannheim.

Mannheim operates one of Germany’s largest DH systems, historically centred on a large coal-fired combined heat and power (CHP) plant (MVV Energie AG, 2026; Statistisches Bundesamt, 2022).

As Germany implements its national coal phase-out, Mannheim has embarked on a far-reaching restructuring of its heat system. The Climate Action Plan and the Municipal Heat Plan outline a pathway towards a decarbonised heat supply by around 2040. Central elements include the expansion of renewable and recovered heat, large-scale heat pumps, industrial waste heat, geothermal and wastewater heat (Stadt Mannheim – Fachbereich Klima, Natur, Umwelt, 2024; Stadt Mannheim Kommunale Statistikstelle, 2024).

A defining feature of Mannheim’s strategy is its explicit intention to decommission the gas distribution network. The network operator has publicly announced plans to decommission the gas grid and initially named 2035 as a target year (IWR, 2024). This position remains rare in the European context, although cities such as Basel and Zürich have already initiated or implemented partial gas network decommissioning. However, this timeline is non-binding and dependent on federal regulation and the pace of building conversion (Rhein-Neckar-Zeitung, 2025).

Case study: Warsaw

Warsaw’s heating system is dominated by fossil fuel use, reflecting Poland’s historical dependence on coal and the increasing role of natural gas as a replacement fuel. The key aspects relating to Warsaw are summarised in Table 6.

DH supplies around 80% of Warsaw’s heat demand. However, unlike leading low-carbon district-heating systems, Warsaw’s network is still largely supplied by coal- and gas-fired plants (EU Covenant of Mayors, 2024b).

Individual heating systems continue to play an important role, particularly in single-family homes and peripheral areas. Natural gas boilers are widespread, and gas remains a key fuel for residential heating outside the DH system. Heat pump uptake remains constrained by building quality and existing gas connections (Bloomberg, 2025).

Warsaw’s heat transition strategy is characterised by small changes rather than a clear fossil-gas exit. Strategic documents such as the Green City Climate Action Plan and the Forum Energii transformation scenarios decarbonisation pathways focus primarily on phasing out coal by around 2035, improving grid efficiency and piloting renewable heat options. Natural gas is consistently framed as a transitional fuel (ARUP, 2024; Forum Energii, 2025).

Promising low-carbon initiatives are emerging, particularly in the use of waste heat. Studies identify significant potential for recovering heat from Warsaw’s metro system, wastewater infrastructure and data centres. A large potential of recoverable heat has been identified in the metro system alone. Pilot projects are underway, and large heat pumps and thermal storage are discussed as long-term options (EU Covenant of Mayors, 2024b; State of Green, 2024a).

The gas network itself is embedded in Poland’s national system. There are no plans to decommission or downsize the gas network. Instead, national policy increasingly frames the grid as compatible with future renewable gases, particularly biomethane. While Poland has significant theoretical biomethane potential, injection into the grid remains negligible at present (ORLEN, 2025; Sienkiewicz et al., 2024).

Cross-cutting patterns

In five of the six cities (not Copenhagen), fossil gas is still part of the urban heating landscape, to varying degrees and with varying strategic importance. Even in cities with ambitious climate targets and advanced DH systems, gas often persists as a transitional fuel. There is a discrepancy between high-level climate neutrality commitments and the lack of tangible measures and strategies to phase out fossil gas.

A further pattern concerns ownership structures. Cities with strong municipal control over DH providers demonstrate a greater capacity to actively reduce gas dependency, while nationally regulated or private operated systems limit municipalities to incremental measures. This dimension is explored further in the Discussion.

The characteristics of the building stock represent a further bottleneck, as older buildings, fragmented ownership and slow renovation rates limit the rapid replacement of gas boilers.

Finally, the analysis shows that DH is a necessary but not sufficient condition for phasing out gas. Although the collective heating infrastructure forms a structural backbone for decarbonisation, it can also lead to renewed dependence on fossil fuels if heat generation continues to be predominantly based on coal or gas CHP.

Diverging pathways and city typology

Despite these shared challenges, the case studies reveal clearly differentiated transition pathways. These differences can be explained by the interaction of three dimensions:

1. the structural role of gas in the existing heating system,

2. the explicitness and credibility of gas phase-out strategies, and

3. municipal control over heat and gas infrastructure.

Two infrastructure pathways for gas replacement emerge. For DH-based cities, DH is the primary vehicle for transition. However, coal-to-gas switching in Budapest, Warsaw and Ljubljana currently risks creating new fossil fuel dependency. For decentralised systems, building-level electrification and energy efficiency are essential. Notably, the analysed documents rarely address the consequences of declining gas consumption for gas networks. Exceptions are Mannheim, which pursues a decommissioning strategy, and Copenhagen, where fossil gas is being replaced by biogas. In Table 7 these dimensions are synthesised into a comparative typology.

The table illustrates a clear differentiation between cities that actively frame gas as a declining technology and those where it remains structurally embedded. Copenhagen represents the most advanced pathway. Mannheim follows a similar trajectory, though gas remains more embedded in the building stock. Ljubljana occupies an intermediate position where gas has taken over as a transitional backbone. Barcelona, Warsaw and Budapest illustrate more constrained pathways, where decentralised structures and/or national regulation severely limit the room for action of municipalities.

It is important to note that the available data are heterogeneous across the case studies. It is evident that detailed figures on natural gas consumption in the building sector or at the level of distribution networks are not consistently available for all cities.

Governance capacity as a decisive factor

Municipal ambition alone does not guarantee a gas phase-out. Outcomes depend on the degree of municipal control over heating infrastructure. Where cities strongly influence DH, they can actively reduce gas use within collective systems, as illustrated by Mannheim. However, DH decarbonisation does not automatically address decentralised gas supply or gas distribution networks, which often remain beyond direct municipal control. This is particularly evident in Budapest and Warsaw, where national regulation limits municipal room for manoeuvre, whereas Mannheim demonstrates how municipal ownership can enable proactive planning.

Implications for urban gas phase-out

The comparative analysis suggests that moving away from fossil gas is less a technological challenge than a problem of governance and coordination. The continued use of gas is rarely due to technical necessities alone, but rather to institutional inertia, inconsistent regulations and infrastructure lock-in. Cities making progress combine long-term political commitment with strong infrastructure control and integration of building renovation strategies. Without greater coordination between municipal planning, national regulation and climate policy, gas risks remaining a ‘hidden pillar’ of urban heating.