A common criticism of heat pumps is that they do not work in cold weather.
However, the Nordic region – particularly Sweden, Finland and Norway – offers a rebuttal to this assessment, as our research at the Regulatory Assistance Project (RAP) shows.
These three European countries have the highest heat pump sales per 1,000 households in the continent.
Sweden, Norway and Finland also have the coldest climates in Europe. In all three countries, there are now more than 40 heat pumps per 100 households, more than in any other country in the world.
At RAP, we have analysed the driving factors that led to this Nordic success story, as part of the development of our heat pump policy toolkit, which we launched at the COP27 climate summit in Sharm el-Sheikh last year.
Heat pump market growth
Installations of heat pumps in the Nordics rose quickly after 2000 and, despite a slowdown in 2012, again continued to surge after 2015.
Heat pumps work like an air conditioning unit (or a fridge) in reverse, to concentrate heat energy from the outside air – or a water or ground source – into building interiors.
The most common are “air-to-air” units, meaning they take heat from the outside air to blow warm air inside, whereas air-to-water units make hot water. Heat pumps are the “central technology” for low-carbon heat, the International Energy Agency (IEA) says.
Norway has the highest penetration of heat pumps worldwide, most of which are air-to-air systems. By 2020, there were 60 heat pumps installed per 100 households in Norway. Most of this happened after 2001 when the heat pump market grew significantly from a low base of around 2,000 units per year to more than 155,000 units sold in 2022.
Similarly, in Finland, before 2000 only a few hundred units of heat pumps were installed per year. From the mid-2000s onwards, the country saw a rapid growth with cumulative installations now exceeding 1m units.
This can be seen in the chart below, which shows annual heat pump sales in Finland, Norway and Sweden from 1990 to 2021.
Because heat pumps use electricity that increasingly comes from low-carbon sources they lead to carbon emission reductions overall. Cumulatively, the heat pumps sold over the past 30 years contributed to a -72% drop in carbon dioxide (CO2) emissions from heating in Finland, -83% in Norway and -95% in Sweden.
In addition, recent RAP analysis shows that heat pumps, even at temperatures sub-zero, are two- to three times more efficient than fossil-fuel heating systems.
This rapid reduction in carbon emissions from heating cannot be attributed to heat pumps alone — district heating, also known as heat networks, has become less carbon intensive and buildings have been built and retrofitted to a higher fabric efficiency standard over time. However, heat pumps played a key part.
Achieving heat pump leadership
The Nordic countries were previously heavily reliant on heating oil to keep warm, a result of the absence of a widespread gas grid.
They – Finland, Norway and Sweden (Denmark uses district heating as its main source of heating, with two-thirds of homes relying on it) – made an early decision to move away from heating oil following the energy crisis in the 1970s. This had seen the oil price rocket by almost 300% due to an oil embargo by the Organisation of Arab Petroleum Exporting Countries (OAPEC).
This crisis led to a widely supported goal to become independent from fossil-fuel imports, perhaps most starkly evident with the creation of a Commission for Oil Independence in Sweden in 2005.
Despite changes in political parties over time, this has remained a constant focus in national energy policy across these countries – and explains why fossil fuels make up a low share of heating fuels in Finland (22%), Norway (less than 1%) and Sweden (3%).
The decision to move away from oil heating provided an important stimulus for research and development of heat pump technology, followed by various promotional government programmes, including information campaigns and grant payments.
For Norway, specifically, it also had a large share of homes using electric heating. Converting electrically heated homes to heat pumps provides significant reductions in electricity demand and running costs because heat pumps are, typically,about three times more efficient than direct resistance heating.
More recently, regulations, such as the complete ban of using heating oil in buildings for heating, have come into effect in Norway. In June 2018, the government adopted a regulation banning the use of mineral oil (fossil oil) for the heating of buildings from 2020. The ban covers the use of mineral oil for heating in residential buildings, public buildings and commercial buildings.
Historic household electricity prices in all three countries were also relatively low compared to many other European countries with about €0.17 per kilowatt hour (KWh) in Finland and Norway and €0.20/kWh in Sweden before the price crisis.
Carbon taxation
Carbon taxation has played a key role in making heat pumps economically competitive in all three countries. In 1990, Finland was the first country in the world to introduce a carbon tax, which currently stands at €53 per tonne of CO2 (tCO2) for heating fuels.
Shortly after Finland, Sweden adopted a CO2 tax in 1991. Since its introduction, it has increased from €21/tCO2 to €102/tCO2 in 2022.
Norway also introduced a carbon tax in 1991, which reached €76/tCO2 in 2023. The government’s white paper on energy policy announced that the tax would rise to €196/tCO2 in 2030, which would be one of the highest levels in the Organisation for Economic Co-operation and Development (OECD).
Many other countries across Europe have addressed imbalances in taxation of heating fuels to encourage heat pump uptake, including the Netherlands, Denmark and Germany, according to RAP analysis.
In Denmark, electricity used for heat pumps in homes is exempt from energy taxes to the minimum amount allowed under EU law. In Germany, levies have been shifted from bills to the public budget.
Air-to-air heat pumps
It is notable from the RAP data presented above that two-thirds of the heat pumps sold in the three countries are air-to-air heat pumps. This differs from other major European heat pump markets, such as Germany and Poland, where the majority of heat pumps are air-to-water.
The reason for this is that, in many cases, heat pumps replaced electric resistive heating with no hot water running through radiators.
Furthermore, the architecture in the Nordic countries tends to be more open plan compared to other European countries. This makes the application of air-to-air a more attractive proposition, without the need for extensive ducting or multiple individual fans.
In addition, air-to-air heat pumps are lower cost compared to air-to-water heat pumps, according to the IEA.
Air-to-air heat pumps can also be used for cooling. However, the Finnish Heat Pump Association estimates that air-to-air heat pumps used for cooling account for only 10%-15% of the market, with the majority being used for heating only.
In some cases (although, according to the Finnish heat pump association, this is a small minority) more than one heat pump is installed in a single building and heat pumps are also often operating with a second heat source being present.
Many homes continue to use wood stoves after having installed a heat pump as a study from the Oslo Centre for Research on Environmentally Friendly Energy (CREE) on heat pumps shows, albeit less frequently. This resulted in about a quarter less wood being used for heating in 2021 compared to 2010. The continued use of wood is at least in part a result of aesthetic and cultural preferences.
In Finland, heat pumps are often installed as an additional heating system complementing mainly electric heating.
Nordic clean heating lessons
RAP’s analysis has found that the success of heat pumps in the Nordics is not accidental.
Instead, it is the result of a mix of policy instruments working in concert, such as carbon taxation, government incentives, regulations, quality standards, consumer protection for example through the creation of bodies to deal with complaints and offer redress, and information campaigns.
The natural efficiency of heat pumps has also helped their deployment.
The key takeaway is that there is no single policy that can deliver a mass market for heat pumps. A well-designed policy mix of economic instruments, financial support and regulation, underpinned by coordination and engagement, turns out to be the most effective recipe for scaling up heat-pump deployment, according to RAP’s research.
The experience in the Nordic countries illustrates not only what can be achieved in just two decades, but how to do it.
Policymakers in countries where heat pumps are still in their infancy do not have to start from scratch, but can learn from – and build on – the heat-pump success story in Norway, Finland and Sweden.
The post Guest post: How heat pumps became a Nordic success story appeared first on Carbon Brief.
The launch of the Africa Energy Bank (AEB) has been put back yet again, raising doubts about the institution’s future ability to finance fossil fuel projects – its main objective – as global lenders retreat from such investments over climate concerns, experts told Climate Home News.
The bank, which had been billed to launch in September after a series of delays, is now scheduled to begin operations in November, according to the head of the African Energy Chamber, an advocacy body for the continent’s oil and gas sector.
Even as the world aims to transition away from fossil fuels, many African leaders have made clear they want to continue exploring and extracting the continent’s large oil and gas deposits – estimated at around 125 billion barrels of crude and over 600 trillion cubic feet of gas – to boost economic development.
As a group, Africa sided with a number of powerful oil-and-gas producing nations in blocking progress on negotiations to craft a global roadmap to transition away from fossil fuels at last year’s UN COP30 climate talks, although some countries did individually support the proposal.
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Meanwhile, major projects under development across the continent – including the 1,443-km East African Crude Oil Pipeline (EACOP) and Dangote’s 700,000-barrel-per-day Kenyan refinery – show that African governments see oil and gas as playing a significant role in meeting their energy and economic needs for many years to come.
In 2022, at a gathering of the African Petroleum Producers’ Organization (APPO) in oil-rich Angola, ministers from its member states adopted a resolution to create the Africa Energy Bank to finance projects for the production, use and trade of oil, gas and broader energy sources.
African control over energy resources
An article on the APPO website explains that the bank was conceived as a way to overcome “disenchantment” with fossil fuels among “the international community” which it said had crystallised around the “energy transition” concept.
“If Western countries, after having long taken advantage of the energy sources they now revile to develop, can afford the luxury of abandoning them, this is not the case in Africa,” it adds, noting that many of the continent’s economies are still largely dependent on oil and gas revenues.
A separate web page about the bank, also hosted on APPO’s website, says its objectives include financing the exploration, production and refining of oil and gas, as well as supporting member states in transitioning from fossil fuels to cleaner energy sources “while ensuring energy security”.
Said Addi, a former executive with Shell and energy commodities trading house Gunvor, said the new bank was judged necessary because financing for hydrocarbons from many traditional international lenders has become constrained.
In trying to fill this financing gap, Africa is not simply setting up another fund to support oil and gas, he added. “It is also an attempt to give African countries greater control over how their energy resources and infrastructure are financed,” he explained.
Nigeria to host the AEB
The energy bank – a joint initiative of APPO and the African Export–Import Bank (Afreximbank) – has so far suffered several delays and is almost two years behind schedule. The initial plan was to start operations in January 2025, with Nigeria as the host country, but the bank’s opening was delayed to June of that year to allow Nigeria time to finalise the construction of the bank’s headquarters in Abuja.
After the government announced the completion of the offices in late November 2025, a new launch date was set for January 2026, which was moved back to April, June and then September. Now it has shifted again to November, raising concerns that the institution may be losing momentum.
Former Shell executive Addi said that if the capital is eventually paid in, the bank becomes operational and its first projects are commercially credible, then the delays will be regarded as normal teething troubles in setting up a multilateral institution. But, he added, scepticism will be justified if it continues to stall.
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Baron Lamarré, an oil and gas expert and former Petronas oil trader, said that missing “three deadlines in a row is not normal”, and warned that if the timeline slips again, “the story flips from ‘ambitious institution finding its footing’ to ‘good idea that lost momentum before it found any’.”
The Nigerian government, APPO and Afreximbank did not respond to requests for comment by the time of publication.
The funding challenge
The Africa Energy Bank is targeting base capital of $5 billion, with plans to scale up to $120 billion within five years by mobilising private-sector funds. However, it is expected to start operations with initial seed capital of $500 million.
The funding plan is to have the 18 member countries of the APPO contribute $83 million each to the bank as equity for a combined $1.5 billion. Afreximbank, other non-APPO African countries and investors outside the continent are expected to provide the remaining $3.5 billion.
But even the initial $500 million has not been easy to mobilise. In May, APPO Secretary-General Farid Ghezali called on members to deliver on their pledges towards the startup goal before the end of June. But the delays suggest this may not have been met, with experts saying Africa may be finding it difficult to self-fund its oil and gas projects in the absence of international capital.
Lamarré said every extension of the deadline points to the fact that “raising fossil fuel capital in Africa without the majors and their financing networks is brutally hard”.
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Since 2020, Western lenders, export credit agencies and insurers have been in steady retreat from African hydrocarbons, he said, while oil majors are divesting their African assets, handing over fields to smaller local operators whose credit ratings are not high enough to borrow cheaply.
Even capital from China and the Gulf, which has partially filled the gap, cannot match the volume, tenor or pricing that Western investors once offered, Lamarré argued.
“If mobilising the first $500 million of seed capital [for the AEB] has taken this long, that’s the clearest signal yet of how steep the climb to $120 billion looks,” he said, noting that the continent’s energy financing gap is as large as $30 billion-$45 billion per year.
Africa’s investment landscape, meanwhile, has been shifting. While foreign direct investment dropped from a 2024 peak, inflows remained roughly one-third above the continent’s long-term average in 2025, according to the 2026 World Investment Report from UN Trade and Development (UNCTAD). They are concentrated in a few sectors including critical minerals needed for renewable energy technologies, battery manufacturing and advanced industrial production.
At the same time, data on global energy investment from the International Energy Agency (IEA) shows that fossil fuel investment in Africa has declined over the last decade.
“Trojan horse” for fossil fuels
While the Africa Energy Bank struggles to get off the ground, climate campaigners have criticised its primary aim of financing oil and gas on the continent at a time when the world is starting to move away from high-carbon fuels to cleaner alternatives.
Bhekumuzi Dean Bhebhe, founder of Africa Change Lab, described the bank as a “Trojan horse”, arguing that its focus on fossil fuel financing runs counter to the global energy transition and the African Union’s Agenda 2063 goals of sustainable development and inclusive growth.
The energy bank, he warned, “risks locking Africa into a new cycle of debt, dependency and fossil fuel entrenchment”, adding that its financing blueprint does not pave the way for a climate-resilient future. “In truth, it is to deepen the same extractive, carbon-heavy pathways that the continent should be moving away from,” he added.
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Kenya-based climate and energy expert Joab Okanda said the AEB’s plan to finance oil and gas is “a misplaced priority” and it should instead back clean energy in line with the policies of some of Africa’s major export markets like Europe.
In addition, the new bank could struggle to mobilise enough resources to advance large-scale oil and gas projects, he added, noting that its proposed $5-billion initial capital is equivalent to the cost of the East African Crude Oil Pipeline alone.
The AEB’s aim of backing more fossil fuels should be flipped “to support countries that are oil-dependent to start working on their transition plans”, Okanda said.
The post Launch of Africa Energy Bank delayed again in blow to oil and gas hopes appeared first on Climate Home News.
Launch of Africa Energy Bank delayed again in blow to oil and gas hopes
A booklet published by the UK’s opposition Conservative party includes a “cost of net-zero” that appears to have been doubled by a spreadsheet error.
The “common sense” policy document argues that “what people ultimately want is a government competent enough to solve the problems for which it takes responsibility”.
In a section that says “sophisticat[ed]…modelling” should not be a substitute for “political judgement”, the “Right Way” document disparages various estimates of the cost of net-zero.
The Conservative document then claims – incorrectly – that the government’s official adviser, the Climate Change Committee (CCC), had put the cost of net-zero at close to £1tn. It says:
“In 2020, the CCC estimated that its route to net-zero would cost £957bn.”
In fact, the CCC’s 2020 estimate was exactly half this amount – £478bn – and last year it published a revised figure of £108bn, largely as a result of the falling cost of electric vehicles (EVs).
Spreadsheet error
The Conservative party’s erroneous claim appears to stem from another report that had accidentally added up numbers twice, using a spreadsheet published by the CCC in 2020.
The 2020 spreadsheet contains a table listing the additional investments that would be needed to build a net-zero economy, from low-carbon electricity generation through to heat pumps and EVs.
These extra capital expenditures, listed as “CAPEX”, add up to a total of £1.38tn over the 30 years of 2020-50. They are set against operational savings, listed as “OPEX”, of £0.90tn.
Added up over 2020-50, the combined CAPEX and OPEX figures come to a total of £478bn.
In addition to the annual sectoral CAPEX and OPEX figures, the CCC’s 2020 spreadsheet also has a line giving combined totals for each year. It appears that someone has added all of these numbers together, resulting in the savings and costs being counted twice.
This double-counted total for the cost of net-zero amounts to £957bn – as shown in the image below – and it appears to be the source of the claim in the Conservative booklet.
At the time of publication in 2020, the CCC said that the £478bn net cost of net-zero amounted to less than 1% of GDP over 30 years – and that the large investment needed would not only result in savings due to lower fossil-fuel imports, but that it would boost GDP overall, by around 2%.
In 2025, the CCC revised its estimates for investment costs and operating savings to £670bn and £562bn respectively, giving a net total of £108bn over 2025-50, or less than 0.2% of GDP.
Earlier this year, the committee said that cutting emissions to net-zero would cost less than a single fossil-fuel price shock and that doing so would have benefits worth £110bn per year.
Paper trail
The erroneous claim in the Conservative document is referenced to the CCC’s 2020 advice on the UK’s sixth “carbon budget”, which, as explained, does not contain the £957bn figure.
The earliest online use of the £957bn figure found by Carbon Brief is a 12 January 2026 article in the Spectator, by retired engineer and self-described “accidental energy analyst” David Turver.
A day later, Turver repeated the mistaken number in a report for the free-market Institute of Economic Affairs. His report cites figure 5.3 of the CCC’s 2020 advice.
However, as set out above, the CCC spreadsheet containing the data for figure 5.3 only adds up to £478bn, half the figure claimed by Turver.
It appears that Turver accidentally added up all of the numbers in the CCC spreadsheet, without noting that it already included a line for the annual total. This results in double-counting the cost.
(Turver’s report also triggered a slew of inaccurate headlines stating that net-zero would cost £7.6tn – or even £9tn. These figures, which came from Turver’s report, were based, among other things, on the implicit assumption that fossil fuels and the cars, boilers and power plants that use them are all free.)
After Turver’s report and article in January 2026, the erroneous £957bn figure was repeated in March by the Great British Think Tank. The organisation has the tagline “data, not vibes” and says of its work: “Every figure [is] sourced from official public bodies.”
The £957bn figure then appeared in the Conservative “Right Way” document in October 2026.
