This paper analyzes the key European Union legislation in relation to technologies and fuels that could be potentially used for the decarbonization of the district heating sector. Based on this analysis, technologies and fuels are classified according to their sustainability and applicability. The focus is further on the assessment of the utilization potential of the low-temperature waste heat as a potentially promising source of renewable heat that could play an important role in decarbonizing the district heating sector. The assessment is made on the case study of the Czech Republic as a country still dependent on fossil fuels. The results show that by 2040, almost a third of the heat supplied by district heating systems could come from low-temperature waste heat sources in combination with industrial heat pumps. This will significantly contribute to the reduction of emissions and, therefore, to the decarbonization of the Czech district heating sector.