Swiss building stock: Current status of the decarbonization pathway

Switzerland’s building stock is on a clear trajectory toward net zero. However, this positive devel­opment must be viewed in light of the green­house gas method­ology, which attributes only emissions from oil and gas combustion to the building sector. Properties’ electricity consumption, the “grey emissions” generated during renovation and new construction, are attributed to the indus­trial rather than the building sector.

This article explains the defin­i­tions used in the green­house gas inventory and inter­prets the most relevant figures and trends.

Significant decline in emissions despite an increase in building space

In 2024, the Swiss building sector emitted 8.8 million metric tons of CO₂ equiv­a­lents¹, accounting for 22% of national emissions. These figures are based on the green­house gas inventory (German language version) published annually by the Federal Office for the Environment (FOEN). The most recent available data is from 2024, although the figures for individual years are also subject to weather-related fluctu­a­tions.

The numbers show a positive long-term trend: Since 1990, the reference year defined in the Paris Agreement, and 2024, emissions have declined by 47%. Among the multi­faceted reasons for this signif­icant improvement are techno­logical advances, stricter building codes, and increas­ingly favorable economic consid­er­a­tions.

We recently examined the economic viability of these measures in a compre­hensive study (in German). The findings show that while energy-efficient renova­tions require signif­icant upfront investment, they reduce heating costs and increase property values. On average, the invest­ments (after deducting subsidies and tax savings) and eleva­tions in property value roughly balance out for property owners. However, there are signif­icant differ­ences depending on each asset. Profitability typically decreases with renovation depth but improves with higher government subsidy levels, property size, and local market condi­tions.

The decline in emissions is all the more remarkable given that the heated building area, measured as the energy reference area (ERA), increased by 49% to 808 million m² over the same period (according to Wüest Partner’s estimate published on the SFOE website). This means that emissions intensity – that is, emissions per unit of heated floor area – declined even more sharply, by 65%. Dividing the total emissions of the building sector by the total energy reference area resulted in an average value of just 10.9 kg of CO₂ equiv­a­lents per square meter of ERA in 2024.

Heating systems play a central role

The reduction in emissions is largely attrib­utable to the heating technologies used. Under cantonal building regula­tions aligned with MuKEn 2014, oil and gas systems facing the end of their lifecycle are now predom­i­nantly replaced with renewable systems. In new construction, heat pumps, district heating, and wood chip heating systems have been the primary choices for some time now. As oil and gas – fossil fuel-based heat gener­ators – are phased out, their emissions disappear from the green­house gas inventory.

Insulation reduces heating needs

Renovations to the building envelope also play a critical role. Measures such as façade and roof insulation, along with window replacement, can reduce heating demand by more than 50%. This directly lowers emissions for properties still using fossil fuels. More broadly, these measures contribute to achieving national energy targets.

The federal government’s Energy Outlook 2050+ targets a 35% decline in heating demand per square meter of gross floor area between 2020 and 2050. However, the Energy Outlook 2050+ carries less legal weight and legit­imacy than formal legis­lation.

Climate goal: Net zero by 2050

Following the voters’ approval of the Federal Act on Climate Protection Targets, Innovation, and Strengthening Energy Security (KIG) on June 18, 2023, emissions target reduc­tions are now enshrined in law. According to Article 4 of the KIG, building stock may emit only 18% of the green­house gas emissions by 2040 compared to those recorded in 1990. This means that emissions must still be reduced by 66% between 2024 and 2040. From 2050, the net-zero target will apply, which stipu­lates that, starting in 2050, Switzerland may not emit more green­house gases into the atmos­phere than can be absorbed by natural and technical reser­voirs.

While no legally binding target exists for 2030, the CO₂ Ordinance specifies that emissions should be reduced to 50% of 1990 levels by that year.

Current momentum is sufficient to stay on track

Based on current trends, the building stock is on track to meet interim targets. The last objective, published in the ordinance accom­pa­nying the latest CO₂ Act, called for a 40% reduction in emissions by 2020 (see Table 1 in the commu­ni­cation on the revision of the CO₂ Act; in German). While the sector narrowly missed this mark in 2020, it success­fully reached the threshold in 2022 and has remained on track ever since.

How do recent declines compare with the targeted future reduction pathway? To reduce the 8.8 million metric tons of CO₂ equiv­a­lents emitted by the building stock in 2024 to zero by 2050, emissions would need to fall by 340,000 metric tons each year. This is less than in recent years: between 2010 and 2022, the average reduction was 420,000 tons per year. The pace of reduction seen in the 2010s would therefore be suffi­cient to stay on course. The frequently cited claim that the renovation rate is too low, or that too little is being invested, is therefore not accurate regarding the climate targets for the operation of the building stock. Rather, it is on track to achieve the climate targets measured based on the green­house gas inventory. This is an encour­aging signal.

Furthermore, the pace of reduction has accel­erated over the past three decades. In the 2000s, the average decline was only 200,000 tons per year, and between 1990 and 2000, there was even an increase of 20,000 tons annually. Despite this promising assessment, three partly conflicting factors must be considered:

1. On the one hand, the Pareto principle also applies to emissions reduction. Energy-efficiency renova­tions are highly effective for some properties, but signif­i­cantly less so for others. Buildings that are more difficult to renovate tend to be upgraded at a later stage.  For example, the low economic return of energy-efficient retro­fitting for rarely used vacation homes shows that maintaining the current pace of reduction is not guaranteed.
2. Further techno­logical advances are expected. Recent examples include the declining costs of photo­voltaic systems and continuous improve­ments in heat pump efficiency.
3. While switching to electric heat pumps reduces emissions within the building stock, it also leads to a shift – the electricity required to operate these systems is attributed to the indus­trial sector.

In fact, a sector breakdown is crucial for accurately assessing the promising outlook for the building stock and its decar­bonization pathway.

Methodology of the greenhouse gas inventory

Greenhouse gas emissions in Switzerland are allocated across various sectors. If this logic is trans­lated into the commonly used “scope” framework, the building sector primarily reflects Scope 1 emissions.

For buildings, Scope 1 emissions are generated on-site through the combustion of oil and gas for heating and hot water. However, many emissions associated with buildings are not attributed to the building sector. This includes emissions stemming from electricity that is consumed within buildings but produced elsewhere (Scope 2). Furthermore, emissions from goods production in commercial or indus­trial buildings are not taken into account, nor are those from the instal­lation of new compo­nents – the so-called “grey emissions” (Scope 3)².

The building sector is reducing emissions faster than transport and industry

In 2024, trans­portation accounted for the largest share of emissions at 33%, followed by industry at 22%. By comparison, the building stock has achieved a 47% reduction in emissions since 1990. Over the same period, transport emissions declined by 10% and indus­trial emissions by 33%. In the “Other” sector, which includes agriculture and waste management, emissions decreased by 13%. 

Based on past trends, the federal climate targets for buildings also call for faster reduc­tions in the future than for other sectors, as illus­trated in the chart below.

It is important to note here that the construction industry is classified under the indus­trial sector, not the building sector. At the same time, construction and renovation activ­ities generate substantial CO₂ emissions. Reducing these grey emissions from the real estate sector is essential to achieving the net-zero target. Decarbonization in the construction sector is progressing, partic­u­larly through material selection. In a Wüest Partner study, we estimated that emissions amounting to 1.2% of the green­house gas inventory could be avoided if the share of timber used as a building material were doubled.

The role and challenges of the circular economy

As fully carbon-neutral construction remains difficult to achieve at this stage, the circular economy is becoming increas­ingly important. This approach focuses on extending the life cycle of existing buildings and prior­i­tizing renovation with recycled materials over new construction.

However, given the dynamic urban devel­opment in Switzerland and the fact that many building compo­nents are difficult to separate and reuse, this poses a signif­icant challenge for the construction industry. In comparison, replacing heating systems is much simpler, enabling the building sector to stay on track toward net-zero emissions.

The impor­tance of keeping the building stock on its decar­bonization pathway is under­scored by its historical contri­bution to emissions. Between 1990 and 2010, the building sector accounted for an average of 30% of total emissions recorded in the green­house gas inventory.

1. In addition to carbon dioxide, other green­house gases such as methane and nitrous oxide contribute to global warming. To ensure a consistent assessment, their climate impact is converted into CO₂ equiv­a­lents. ↩︎
2. This method­ology is based on the Greenhouse Gas Guidelines of the UNFCCC (United Nations Framework Convention on Climate Change). ↩︎