This study presents a methodology to assess annual excess heat volumes from fuel combustion activities in energy and industry sector facilities based on carbon dioxide emission data. The aim is to determine regional balances of excess heat relative heat demands for all third level administrative regions in the European Union (EU) and to identify strategic regions suitable for large-scale implementation of district heating. The approach is motivated since the efficiency of current supply structures to meet building heat demands, mainly characterised by direct use of primary energy sources, is low and improvable. District heating is conceived as an urban supply side energy efficiency measure employable to enhance energy system efficiency by increased excess heat recoveries; hereby reducing primary energy demands by fuel substitution. However, the importance of heat has long been underestimated in EU decarbonisation strategies and local heat synergies have often been overlooked in energy models used for such scenarios. Study results indicate that 46% of all excess heat in EU27, corresponding to 31% of total building heat demands, is located within identified strategic regions. Still, a realisation of these rich opportunities will require higher recognition of the heat sector in future EU energy policy. (C) 2014 Elsevier Ltd. All rights reserved.