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The EU's heat pump problem

Megan Hernbroth
Jul 5, 2022
Illustration of a the stars on a plugged in EU flag turned on and glowing.
Illustration: Gabriella Turrisi/Axios

The EU is struggling to encourage mass electrification even as pressure to wean off of natural gas ramps up.

Why it matters: The EU is years ahead of the U.S. in both electrification policy and practice, so its struggles could be a harbinger of troubles as the U.S. catches up.

State of play: Much of the EU is under pressure to wean itself off of natural gas supplies from Russia amid the war in Ukraine, but there are hurdles.

  • Europe's aging housing supply lacks the ability to support electrified appliances like heat pumps, and there is also a lack of government subsidies to bring down costs.

Zoom in: The EU consumes most of its natural gas for heating in winter months.

  • In a push to electrify heating, many countries have urged people to adopt heat pumps in homes and apartments with the goal of installing 10 million units in the next few years.
  • A heat pump costs roughly €10,000 (~$10,475), compared to roughly €2,000 (~$2,100) for a traditional natural gas boiler.
  • But government support (primarily via subsidies) has been lacking, S&P Global Insights manager Adrian Dorsch tells Axios.
  • "To electrify heating demand is a gigantic task," says Dorsch, who manages European long-term gas analytics for S&P Global Insights.

The intrigue: Germany and the Netherlands have both announced an intent to ban boiler installation in new buildings as well as boiler replacements in existing buildings by 2025.

  • Dorsch says that even though the bans will likely increase demand for heat pumps, there is still a shortage of qualified professionals to install them and many homeowners will have to retrofit existing homes to become energy efficient.

The bottom line: The EU has been the pace setter for societal climate technology adoption, and if it's struggling, that bodes ill for lagging markets.

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