The European heat pump sector has once again urged the European Commission against delaying the EU Heat Pump Action Plan as sales continue to slump.
On Tuesday, 61 CEOs said in a joint letter to European Commission President von der Leyen that this threatens EUR 7 billion ($7.6 billion) of planned investments in the sector over the 2022-25 period.
“This would affect jobs in the sector; there are over 160,000 already today in Europe, and huge growth possibilities,” the industry leaders said in the letter.
The European Commission has recognized the heat pump sector as critical for Europe’s energy independence under REPowerEU and the Green Deal Industrial Plan. However, it said in December that it was postponing the EU Heat Pump Action Plan – which would set out how it planned to achieve its pledge to install 10 million additional heat pumps by 2027 – until after the European Parliament elections in June.
An email sent from the commission to the Brussels-based European Heap Pump Association (EHPA) in December stated that the action plan would not be released in the “very busy Q1 2024,” but most likely in the”autumn or winter 2024-25.”
The latest figures show heat pump sales dropping at the end of 2023. According to the EHPA, this is due to policy changes that have shaken consumer and manufacturer confidence, alongside falling gas prices, which make heat pumps less financially attractive.
The EHPA’s figures show that a good first quarter last year was followed by declining sales of space and hot water pumps in the second and third quarters. On average in the 10 countries analyzed, sales fell 14% year on year in the third quarter of 2023, the association said.
“Instead of double-digit growth for 2023 the sector is experiencing a double-digit decline in the last quarter of 2023 compared to 2022,” said the 61 executives in the letter. “This decline has come about because gas prices have fallen while electricity prices remain high and there are still tax breaks on fossil fuels and on boilers running solely on fossil fuels. In many countries, the energy transition in heating has been made into a political issue – as a result, ambitions have been lowered and end-users become uncertain and prefer to stick to the status quo.”
The Heat Pump Action Plan – a four-pronged policy aiming to accelerate heat pump deployment and support the market – has been in the works since April. It followed the publication of the 2022 European Commission report on the competitiveness of clean energy technologies, which indicated 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.”
“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,” the commission said at the time.
According to Eurostat data, about 50% of all energy consumed in the European Commission 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.
Martin Forsén, the president of the EHPA, argues that Europeans will reap the benefits of a strong heat pump market, from industrial leadership and jobs to decarbonization and protection from volatile gas prices.
“The European Commission’s decision to slam on the brakes on its Action Plan – just as other world regions accelerate their support – is the exact opposite of what’s needed. Today industry leaders call for swift publication of the Plan, to put Europe on track for energy independence and net-zero competitiveness,” he said.
The letter to the European Commission published on Tuesday follows another letter last week that was signed by 19 organizations and NGOs, calling for the Heat Pump Action Plan to be quickly published.
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