Heat pumps are becoming increasingly crucial in Europe’s energy transition, with manufacturers looking to Brussels to address issues such as taxes and subsidies that currently favor gas over more sustainable heating options. The European Heat Pump Association (EHPA) reported a 47% drop in sales of heat pumps in the first half of 2023 compared to the previous year, with only Scandinavia showing an increase due to the technology already being mainstream in that region. Despite heat pumps being more cost-effective in the long run compared to gas heating, low gas prices and tax differentials have made gas heating more attractive in many parts of Europe.
The EHPA highlighted the need for energy prices to favor heat pumps if EU governments are serious about energy sovereignty, competitiveness, and sustainability. Currently, gas prices are much lower than electricity prices across Europe, making it a more economically viable option for consumers. However, with buildings and heating accounting for a significant portion of the EU’s energy use and greenhouse gas emissions, a shift towards heat pumps is necessary to achieve the targeted emissions reduction by 2030. National support schemes need to be reformed to incentivize the deployment of heat pumps and discourage the installation of fossil fuel-dependent heating systems.
The Reform Institute identified several issues with current support policies for heating systems, including the lack of linkage to income, complexity and delays in subsidy schemes, and a focus on modern gas boilers which perpetuate fossil fuel dependence. To meet the EU’s emission reduction targets, an estimated 60 million heat pumps need to be deployed across the bloc by 2030, but current sales figures suggest a shortfall of around 15 million units. This missed opportunity not only impacts emissions reductions but also affects gas imports and overall energy security for the EU.
The EU has the potential to coordinate national support schemes and steer governments towards more effective approaches to promoting heat pumps. By exchanging best practices and harmonizing policies across member states, the EU can help accelerate the deployment of heat pumps and contribute to achieving energy sovereignty and competitiveness. The European Commission’s proposed reform of the Energy Taxation Directive aims to encourage a switch to cleaner energy sources and address the current imbalances in pricing that favor gas over electricity. However, the reform is currently stalled in the Council due to the requirement for unanimity among all 27 members.
The incoming EU Commissioners have the opportunity to prioritize the deployment of heat pumps and address the challenges currently faced by manufacturers and consumers in adopting this technology. With a clear focus on achieving energy sovereignty, competitiveness, and decarbonization of heating and cooling systems, heat pumps are essential for Europe’s transition to a more sustainable energy future. The success of heat pump deployment will not only contribute to reducing emissions and gas imports but also promote energy efficiency and affordability for consumers across the EU. By aligning policies and support schemes to favor heat pumps over fossil fuel-based heating systems, the EU can ensure a smoother transition towards a greener and more resilient energy system.
