Today, heating is a stubbornly high source of carbon emissions, with around half of the energy consumed in the EU used for heating or cooling, and 70% of it comes from fossil fuels. Appliances like the gas boiler may keep many of us warm in the depths of winter, but they are also heating up the planet. Public authorities know the status quo is untenable, but they have not yet taken the decisive action they need to, perhaps because they still need to draw lessons from recent EU debates on the transition to a clean heating future and how to get consumers engaged.
Here’s what we learnt recently, and what we think the Commission should ultimately do.
An end to the gas boiler?
The invasion of Ukraine by Russia triggered an important and long overdue realisation – that the EU had become dangerously dependent on Russian gas to heat its homes, which needed to end. Most countries were quick to cut down substantially on Russian gas imports. But replacing Russian gas has proved much easier than removing gas altogether.
As part of its RePowerEU plan, the Commission started exploring the idea of a phase-out of gas boilers. After all, technologies such as heat pumps and district heating offer real potential, also for consumers. National governments were already taking action. In the Netherlands, the government announced in 2022 it was making the hybrid heat pump (a combination of an electric heat pump with a gas boiler) the new norm. In Germany, a new heating law was under preparation in which the government was considering a ban on fossil fuel-fired heating appliances.
Then the gas industry pounced. It heightened fears around what a clean heat transition could mean for more vulnerable households, for energy bills and for the grid. In Germany, the heating law in Germany turned into a fireball when centre-right and far-right parties jumped on the bandwagon and made the heating law front page news. The result was a watered-down law which leaves many questions unanswered and pushes back many of the needed changes into the future. There were then calls from Germany to halt plans for a phase-out of fossil fuel-fired appliances at EU level.
Heat pump action plan delayed
While it may or may not be linked, the delay of the European Commission’s Heat Pump Action Plan until after the European elections of June 2024 further reflects the pressure coming on policy makers to roll back or at least slow down their political ambitions until a later date.
That those who are about to lose their profits from the energy transition – the gas industry – are going to fight back, should come as no surprise. It is also clear that some political parties will use the Green Deal as a rallying call against change.
The EU should not backtrack on its policy direction. What it instead needs to do is put in place comprehensive policies that will not only bring about change, but make that transition to clean heating fair to EU consumers.
So what now?
There need to be clear signals to the market that heat pumps are going to replace boilers, but that cannot be all. We need a much more comprehensive set of actions – tackling the appliances, the workforce, the price signals – making clean heating choice the easy, attractive and affordable one.
Heating will have to become cleaner. Politicians are going to have to prepare for criticism and backlashes.
The Commission has already begun work on the EU’s climate targets for 2040, where it is suggesting CO2 emissions should be reduced by 90% compared to levels in 1990. This will mean massive electrification of our economy and a substantial shift away from fossil fuels to renewable energy.
As several Member States already do, we need to make sure that all new buildings will be heated by heat pumps or renewable based district heating. There need to be investments in developing a skilled workforce to advise, install and maintain the clean heating appliances that are going to end up in our homes. We need efficient one-stop-shops that can advise consumers on the ways to save money in the long run and cut down on emissions. Subsidies for fossil fuel-fired appliances need to end, while purchase incentives and green loans for heat pumps need to be become widely available. To tackle the consumer’s ‘investment gap’, we need better targeted financial tools.
Help EU consumers towards clean heating
BEUC and its members, which are national consumer organisations, are already helping consumers make the transition with projects such as the EU-funded CLEAR-HP, running collective purchase campaigns to guide consumers through the energy transition, advising them on how to make their homes heat pump-ready and offering them a discounted price on a high performing heating device.
The EU also needs to sort out current issues around the roll-out of dynamic price offers. These offers have the potential to shift some consumer use of electricity from peak to off-peak hours, which would lower pressure on the grid and help with electrification of our economy. However, dynamic price offers are still far too scarce on the market for the moment, despite them being a requirement by EU law.
Our upcoming study, to be published next week, will look at what dynamic price offers could mean for those who have a heat pump. National authorities need to make these offers available to consumers in all countries on a mass basis.
The renovation wave also needs to happen faster. Better insulating people’s homes is key to showing them that cleaner heating can in fact mean savings on your energy bills. However, a report we published last year concluded that deep retrofits of buildings were not always necessary depending on where in Europe the buildings are situated. In many countries, a medium-range retrofit was going to be sufficient. Consumers also need more clarity and advance warning about plans for their neighbourhood to potentially connect to a district heating network.
The Heat Pump Action Plan will be welcomed, but along with tackling the skills gap and financing, how about ensuring consumers have access to dynamic price contracts (i.e. enforcing the Electricity Directive), reducing the taxes on electricity to make them run cheaper than gas boilers, and ensuring Member States provide a certified list of heat pump installers?
The bottom line
Heating will have to become cleaner. Politicians are going to have to prepare for criticism and backlashes. But with information campaigns that reach people and the right accompanying measures, these policies can bring about change that will not leave people in doubt as to what is going to happen in the future. It doesn’t have to cost the earth or a fortune.