Following several years of strong growth, heat pump markets slowed in Europe in 2023.
In previous articles for Carbon Brief, we discussed this initial surge in 2021 and explored the impact of the energy crisis in 2022.
Yet, despite a drop in heat pump sales in key European regions, the trends in 2023 are more nuanced than an outright downturn.
Heat pumps generally increased their position relative to fossil heating systems and, in some of the continent’s biggest heating markets, they saw continued growth.
If policymakers want to keep the transition to low-carbon heating on track, then thorough, consistent and coordinated policy efforts remain critical to scaling up heat pump markets.
Heat pumps in Europe falling short of 1.5C path
In 2023, the heat pump market’s expansion in Europe hit a plateau, as shifts in policy, changing energy prices, a stagnating economy and backlash against climate initiatives adversely affected sales in several nations.
Across the continent, there was a general downturn in sales by about 5% compared with a year earlier, as shown in the figure below.
The impact was more pronounced in the segment of air-source heat pumps for space heating, with a 12% decrease in air-to-water and a 10% fall in air-to-air sales.
Conversely, the segment for hot water heat pumps – those used for heating water for use in the home – saw significant growth, surging by nearly 20%.
However, while still high in historical terms, these sales are far from what is required to meet climate goals.
The EU will need around 60m heat pumps by 2030 to get on track for net-zero by 2050, according to modelling from the European Commission.
The aggregated statistics presented above show that, as of the end of 2023, there were roughly 23m heat pumps across the 21 EU nations included in the data. (The figures also include, under “Rest of Europe”, three non-EU countries, the UK, Norway and Switzerland, while excluding smaller EU markets.)
This means that an average of around six million installations would be needed per year out to 2030, in order to hit the 60m milestone, whereas the current pace of growth is closer to 2.5m per year.
Trends in 2023 went in the opposite direction to what would be required. Among the countries accounting for the largest decline in sales were Italy, Finland and Poland, as shown in the figure below.
According to market statistics from the European Heat Pump Association (EHPA), Italian sales fell to around 345,000 units in 2023, compared to 514,000 the previous year, a decrease of 33%.
In Finland, some 114,000 heat pumps were sold compared to nearly 200,000 in 2022. And in Poland, the market fell to 129,000 units after reaching 208,000 in 2022.
While the European market contracted overall, several individual countries saw strong market growth. In Germany, sales increased by 60% year-on-year from 276,000 in 2022 to 439,000 in 2023.
In the Netherlands, 154,000 heat pumps were sold, a 53% increase on 2022 levels of roughly 100,000. Belgium experienced Europe’s largest market increase at 72%, breaking through 100,000 sales in one year for the first time.
In the UK, trade group the Heat Pump Association reported annual growth of 4% to reach more than 60,000 units sold. This data includes air-to-water and ground-source heat pumps, but does not account for air-to-air and is, therefore, incomplete.
Heat pumps gain market share
The decrease in the European heat pump sales in 2023 is moving in the opposite direction to what would be required to meet Europe’s decarbonisation goals. Nevertheless, the overall picture is more nuanced than this contrast suggests.
For example, in certain countries where homes are predominantly heated by fossil fuels, heat pumps have continued to gain market share.
France is the leader in this regard. The market share of heat pumps has been steadily growing over the past decade, with more heat pumps sold than gas and oil boilers for the first time in 2022.
This French trend continued in 2023 – as shown in the top left corner of the figure below. Fossil fuel boiler sales fell sharply by 23%, allowing heat pumps to reach 61% of the heating market despite also seeing a small fall in sales.
Germany (top right) has seen the heat pump market share steadily increasing year-on-year from around 10% in 2014 to 33% in 2023. Despite a booming fossil heating market, enough heat pumps were sold in 2023 that their market share continued to grow.
In Poland (centre left), although the market share of heat pumps plateaued in 2023, it has risen significantly to 40%, from just 10% in 2018. The Netherlands (bottom left) has also seen a rapid shift, with a heat pump market share of 18% in 2023, compared to just 1% in 2014.
Italy’s heat pump market share (centre right), which is more stable, contracted in 2023 after two years of growth. In the UK (bottom right), heat pumps have roughly tripled their market share in five years, but from a very low base. Excluding air-to-air heat pump sales, only around 60,000 units were sold in 2023, with a current market share of roughly 3%.
Considering all six countries together – the largest markets for heating installations, all of which still have gas boilers as their predominant heating technology – the market share of heat pumps has tripled from around 8% in 2013 to 24% in 2023.
A challenging outlook
European countries are facing diverse challenges to growing heat pump sales. The plateauing of heat pump sales in France, Europe’s largest market, is a key example of this.
On the one hand, the French government cut funding to one of the main heat pump support programmes by €1.4bn while announcing an increase in electricity tariffs. On the other, the regulator also announced a hike in gas tariffs, linking it directly to a decrease in gas consumption, among other factors, including the removal of a price cap.
This indicates an escalating financial vulnerability for customers remaining on the gas network in France. The heating industry expects a further contraction of the boiler market in 2024, although not at the pace seen in 2022-2023.
Elsewhere, the 2022-2023 heat pump market surge in Germany is not expected to continue, RAP analysis suggests. Already in the latter half of 2023, installations had slowed compared to the previous year, as had applications for the country’s subsidy programme.
This is largely linked to Germany watering down its Building Energy Act. It remains to be seen to what extent mandatory municipal heat planning, part of the EU’s revised Energy Efficiency Directive, will drive an uptake of heat pumps in the coming years.
Poland was Europe’s fastest-growing market for heat pumps in 2022, with a 120% increase in sales in a single year. The 46% contraction of heat pump sales in 2023 was largely driven by a 40% drop in the single-family home boiler market, with total sales of fossil fuel heating systems falling in turn. As a result, heat pumps maintained their market share in 2023.
However, the unfavourable price ratio in Poland, typically more than three times as expensive for electricity as for gas, remains a key challenge. The recently elected government is considering policy reform options to address this, however.
Italy’s steep market decline, especially for air-to-water heat pumps, which fell by more than 50%, moves the country in the wrong direction for decarbonising its heating sector. The country’s 2023 heat pump sales were even lower than in 2021.
Key reasons for this include changes to the Superbonus energy efficiency support program, which lowered its reimbursement rate from 110% to 90% and a tightening of eligibility for the scheme.
The heat pump market in the Netherlands was one of Europe’s fastest growing in 2023.
While there was a decline in sales in the country during the last quarter of 2023, due to supply chain constraints, the long-term outlook is for further growth. The market is expected to remain at similar levels throughout 2024.
However, regulation expected to come into effect in 2026 that would have phased out installations of stand-alone fossil fuel heating systems is now expected to be scrapped. The new Dutch right-wing coalition government announced a u-turn on the policy along with a raft of other climate measures in May.
In the UK, the heat pump market expanded slightly in 2023 compared to 2022. With around 60,000 units installed, however, it is well off the government’s target of 600,000 installations per year by 2028.
In October, heat pump grants under the boiler upgrade scheme were increased from £5,000 to £7,500.
The government also recently confirmed that, from 2025, new homes will no longer be allowed to install fossil fuel heating systems or so-called “hydrogen-ready” boilers. This will result in a substantial market boost of more than 150,000 additional units per year, RAP analysis suggests, assuming most new homes will include heat pumps.
However, there is continued uncertainty around the clean heat market mechanism, the main instrument expected to drive heat pump installations in existing buildings.
A one-year postponement of the scheme – which will set a rising standard for heat pumps as a proportion of fossil fuel boiler sales – was recently announced following pressure from the gas boiler industry.
At EU level, previously strong indications of support have begun fading. The European Commission has delayed its heat pump action plan, which would have continued to lay the groundwork for the rapid expansion of the technology across the EU.
More than 60 chief executive officers across the heat pump industry criticised the decision, warning that it risked billions of euros in investments.
At the same time, the European Parliament and the European Council recently passed the revised Energy Performance in Buildings Directive, which will prohibit subsidies for standalone fossil fuel boilers after 2025 and aims for a full phaseout of fossil fuel boilers by 2040.
Consistent policy remains key
Heat pumps are the “central technology” for low-carbon heat and rapid growth in their market share is crucial for meeting national and international climate goals.
After expanding rapidly in 2021 and 2022, the plateau in the European heat pump market in 2023 highlights the impact of inconsistent policies in denting their long-term growth.
The variance in market performance across countries – stemming from a mix of policy shifts, funding cuts and regulatory changes – underscores the complexity of scaling heat pump technologies rapidly enough to meet Europe’s decarbonisation goals.
Nonetheless, far more heat pumps are being installed than in previous years and heat pumps are continuing to gain market share in Europe’s largest heating markets.
RAP analysis shows that consistent and forward-thinking policy packages are likely to be key to boosting this trend. Such interventions could lower the upfront cost of heat pumps and ensure their running cost competitiveness, as well as providing the industry with the market certainty necessary to spur investment, innovation and consumer confidence.
The post Guest post: Heat pumps gained European market share in 2023 despite falling sales appeared first on Carbon Brief.
Guest post: Heat pumps gained European market share in 2023 despite falling sales
Governments at the annual oceans summit reaffirmed commitments to protect key marine ecosystems including the high seas and coral reefs, but observers said funding barriers and polluting projects are hampering progress on putting them into practice.
At the Our Ocean Conference in Kenya’s coastal city of Mombasa this week, some 3,000 delegates – including government officials, scientists, business representatives and activists – gathered to discuss ocean protection and push for marine issues to move from the margins to the centre of global climate diplomacy.
Campaigners said the overall picture was positive. Oceans are gaining more visibility in international climate discussions: from blue carbon ecosystems such as mangroves, to coastal adaptation, marine biodiversity, ocean finance and the High Seas Treaty.
In this year’s preliminary conference report, the secretariat listed 320 existing ocean commitments worth $6.4 billion, with about $1.1 billion destined to address the climate crisis. Many of these pledges were already announced before the conference.
But as momentum builds ahead of the COP31 climate summit in Türkiye, John Kerry, former US climate envoy and founder of the Our Ocean Conference, warned that the conversations and commitments on ocean protection will mean little if implementation continues to lag behind action.
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“The ocean can no longer be an afterthought in climate policy,” Kerry told delegates at the opening ceremony of the conference. “Now it must become central to our climate solutions.”
“The challenge before us is not a lack of knowledge. We know exactly what has happened,” he said. “The challenge is whether political will can finally catch up with the science.”
He added that the meeting taking place on the shores of the Indian Ocean should be remembered as the moment the process moved “from commitments to implementation”.
The ocean has quietly shielded humanity from the worst impacts of climate change for decades, absorbing around 90% of the excess heat generated by global warming while sustaining the livelihoods of billions of people.
From pledges to progress
Oceans have been largely absent from international climate negotiations, often treated as a conservation issue rather than a core component of climate action.
Yet scientists say the ocean absorbs around a quarter of humanity’s annual carbon emissions and plays a critical role in regulating global temperatures.
Research suggests that ocean-based solutions – from restoring mangroves and seagrass meadows to decarbonising shipping and expanding marine protected areas – could deliver up to 35% of the emissions reductions needed to keep global warming within 1.5 degrees Celsius by mid-century.
That growing recognition has fuelled calls for oceans to play a larger role in climate policy and negotiations. Against that backdrop, the Our Ocean Conference – launched in 2014 to mobilise governments, business, philanthropies and activists – has emerged as a platform for advancing action to keep the planet’s seas healthy.
According to the conference secretariat, the process has generated more than 2,900 commitments worth nearly $170 billion in the 10 years since its launch. The gathering in Mombasa was the 11th conference and the first to take place in Africa.
This week, Canada and Jamaica were confirmed as the hosts of the next two Our Ocean conferences in 2027 and 2029. There is none planned for 2028, as the UN Ocean Conference will be co-hosted by South Korea and Chile that year, the secretariat said.
Science ‘under attack’ from fossil fuel interests at UN climate talks
In Mombasa, governments reaffirmed more than 300 commitments linked to the creation of new marine protected areas, reducing marine pollution, and developing sustainable fisheries, among others.
Most of the finance mobilised went to “blue economy” initiatives, including the European Union’s Ocean Eye initiative, which will mobilise €50 million ($57 million) to offset a Trump administration decision to scale back the US Ocean Observatories Initiative and weaken scientific marine data.
“More important than the new pledges is the actual delivery of commitments,” Cynthia Barzuna, who heads the conference secretariat at the World Resources Institute, told Climate Home News. “That is what makes a difference for marine ecosystems and coastal communities.”
Last year, the secretariat published its first comprehensive assessment of implementation, finding that nearly 80% of commitments made through the conference were either completed or progressing towards completion.
Barriers remain
Yet while oceans are climbing the political agenda, significant barriers remain to turning ambition into meaningful action.
The secretariat’s assessment found that successful projects involved local communities, strengthened local expertise, and secured long-term financing. Many organisations, however, reported difficulties accessing sustained funding, particularly in developing countries.
African initiatives, for example, tend to rely on short-term project grants, creating what Barzuna described as a “patchwork of impacts on the ground” rather than the systemic change needed to protect marine ecosystems and coastal livelihoods.
Campaigners say a broader challenge lies in ensuring that growing recognition of the ocean’s importance is reflected in wider climate and economic policies.
While countries have pledged to expand marine protected areas, restore coastal ecosystems and strengthen ocean governance, many continue to pursue activities that place additional pressure on marine environments, including offshore fossil fuel development.
“This year’s Our Ocean Conference comes at a critical moment where the incoming presidencies for COP31 – both Türkiye and Australia – have a strong interest increasing the prominence of the ocean in the COP,” Shamini Selvaratnam, director of International Climate and Clean Energy at the Ocean Conservancy, told Climate Home News.
“But we cannot talk about ocean health and then continue to explore offshore oil and gas – those two things are incompatible. It’s like asking the dolphin to swim on the land.”
For supporters of the ocean agenda, the question is no longer whether oceans matter to climate action. The challenge now is ensuring that governments match rising political ambition with funding, implementation and accountability.
“The ocean has actually been acting as Earth’s life support system – and it has been protecting us,” Kerry told delegates. “The question before us is whether we are willing to protect the ocean in return.”
The post Mombasa ocean summit drives progress on marine protection, but threats persist appeared first on Climate Home News.
Mombasa ocean summit drives progress on marine protection, but threats persist
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