Heat pumps are key to enabling the clean energy transition

According to Eurostat data, about 50% of all energy consumed in the EU is used for heating and cooling, and more than 70% still comes from fossil fuels (mostly natural gas). In the residential sector, around 80% of the final energy consumption is used for space and water heating.

Heat pumps are a mature technology that is much more energy efficient than boilers. They allow greater use of renewable energy sources, ambient energy, and waste heat. In buildings, heat pumps are used for heating, hot water, and in some cases also for cooling. Rather than producing heat, they extract and upgrade ambient energy (heat or cold from outdoor air and surface or sewage waters) or geothermal energy (heat or cold from the ground or groundwaters). The refrigeration cycle is in most cases a vapour compression cycle consuming electrical energy, but there are also sorption cycles that are heat driven.

A report published in 2022 by the International Energy Agency (IEA) predicts that heat pumps will lower Europe’s gas demand for heating in buildings by at least 21 billion cubic metres in 2030.

In addition, with the phase-out of stand-alone boilers by 2029 under ecodesign rules, a total additional deployment of 30 million or more heat pumps can be expected by 2030 as compared to 2020, most of them hydronic (including hybrids). This ambition has been expressed in the Green Deal Industrial Plan. To ramp up the heat pumps production and their deployment, more installers and trained staff are needed. Industry estimates that at least 500.000 skilled full-time equivalent employees are needed by 2030 in Europe.

New financing instruments will support the roll-out of heat pumps. As of 2026, all EU countries will be able to benefit from the Social Climate Fund, a new €86.7 billion EU Fund that will notably allow EU countries to support energy efficiency measures and the decarbonisation of heating and cooling in buildings, including the installation of heat pumps, for vulnerable households (in particular those in energy poverty) and micro-enterprises.

The Social Climate Fund is sourced by a dedicated share of the revenues from the auctioning of emission allowances under the new emissions trading scheme (“ETS2”) that will put a carbon price on the fuels used in buildings, road transport and other sectors as of 2027, hence further strengthening heat pumps’ competitiveness. Also, beyond the Social Climate Fund, the ETS2 will provide significant auction revenues for EU countries to support the green transition notably in the building sector.

EU Heat Pump Action Plan

There is an urgency to switch to renewable efficient heating and cooling technologies in buildings, industry, and networks. The 2022 Commission report on the competitiveness of clean energy technologies indicates that the deployment of all kinds of heat pumps (from single-family houses to large multi-apartment, tertiary buildings and heat network heat pumps to high-temperature heat pumps for industrial applications) is necessary to meet our reinforced climate objectives.

However, without a dedicated EU action plan, 22 million old individual heating appliances and several thousand large old fossil-based heating units are at risk of being replaced by fossil boilers. 

A call for evidence on the action plan was launched on 28 April 2023. The input provided will be taken into account as the Commission further develop and fine-tune the initiative. 

The action plan will aim at accelerating heat pump deployment in the EU through 4 building blocks.

Financing

In order to facilitate access to all relevant EU funding programmes, the action plan will come with a mapping of financing possibilities for both heat pump deployment at the individual level and heating networks supplied by large heat pumps, as part of heating and cooling strategies at local and regional levels.

Source: energy.ec.europa.eu

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