January 17, 2024
Welcome to ASHRAE's European Policy and Funding Update! This monthly publication features information on policy and funding-related activities of interest to ASHRAE members in Europe. Archives of previous updates are available from the ASHRAE European Policy and Funding Updates webpage.
EU Regulatory Updates
European Commission Recognizes Requests to Apply Reduced Rates of VAT to Supplies of Natural Gas, Electricity and District Heating Obsolete
On 18 December, a communication from the Commission formally recognized that certain laws concerning requests to apply reduced rates of VAT to supplies of natural gas, electricity and district heating have become obsolete. Indeed, specific provisions allowed Member States to apply a reduced rate to supplies of natural gas and electricity provided that no risk of distortion of competition exists. Before doing so, a Member State intending to apply such a rate had to inform the Commission thereof, which was required to decide on the existence of a risk of distortion of competition. Between 1999 and 2006, five Commission Decisions were adopted based on that provision.

EPHA Announces Declining Heat Pump Sales Threatening Europe's Decarbonization Targets and Investment Plans
On 14 December, the European Heat Pump Association (EHPA) released research indicating that sales of heat pumps have experienced a decline throughout 2023, despite a strong start. The second and third quarters witnessed a drop in sales of space and hot water heat pumps across Europe, with many countries reporting lower sales compared to the same period in 2022. The third quarter of 2023 experienced an average sales decline of 14% in the ten countries analyzed. According to EHPA, this downward trend not only poses a risk to Europe's decarbonization targets but also endangers the €7 billion investment planned for heat pump production facilities. The decline is attributed association to unclear communication from policymakers, shifting government policies and subsidies, as well as falling prices of fossil gas compared to electricity, making heat pumps less financially appealing. EPHA requests a comprehensive action plan from the European Commission, addressing these challenges and ensuring favorable conditions for heat pump adoption. National governments must also propose solutions in their energy and climate plans, focusing on balancing energy taxation, phasing out fossil subsidies, and reducing electricity taxes and levies according to EPHA that also ask policymakers to commit unequivocally to heat pump technologies and work towards reducing the cost of electricity to ensure wider adoption of this efficient and climate-neutral heating solution.

Aalborg Universitet Highlights that District Heating Needs to Grow by 2030 to Decrease Imported Fossil Fuels
On 11 December, Aalborg Universitet published a study entitled “Heat Matters: The Missing Link in REPowerEU”, highlighting that District Heating needs to grow by 2030 to decrease the share of imported fossil fuels and establish the conditions to roll-out renewable and waste heat in urban areas. The study indicated a potential for district heating to grow on many markets, including mature markets. The growth and investment required are higher in new and developing markets, in particular large markets such as Germany, France, the UK and the Netherlands. In France it was confirmed in the finance law that the heat fund will increase to a level of EUR 820 million in 2024, after an increase from EUR 370 to 520 million in 2022. The aid is available for renewable heat, including investment aid to fund efficient DH networks and generation. Based on past allocation, around 2/3 of the total aid was spent on DH (generation and distribution). In France district heating represents 5% of the heat market and the increase will support the realization of the 2030 target for renewable and recovered heat supplies (a five-fold increase compared to 2012 levels). In Germany district heating has a 10% share of the heat market (14% of the buildings stock). Last year a funding scheme – BEW or Bundesförderung für effiziente Wärmenetze – entered into force targeting both the update of current systems as well as the growth of new systems based on new heat sources.

European Commission Opens a Call for Proposals on Smart Grid-Ready Buildings
From 11 December to 18 April 2024, the European Commission opened a call for proposals on Smart Grid-Read Buildings. This destination of this call addresses activities targeting the energy demand side, notably a more efficient use of energy as regards buildings and industry. It contributes to the activities of the Strategic Energy Technology Plan (SET Plan) and its implementation working groups. It covers the following impact areas: Industrial leadership in key and emerging technologies that work for people; Affordable and clean energy; Circular and clean economy.

European Commission Publishes a report on the Electrification of Space Heating in Buildings
On 2 December 2023, the European Commission released a report titled "Potentials and levels for the electrification of space heating in buildings" highlighting the significance of the space heating sector in achieving the EU's climate goals. With heating and cooling accounting for 50% of the EU's final energy consumption and a substantial portion fulfilled by fossil fuels, decarbonizing this sector is crucial for greenhouse gas neutrality by 2050. The report explores the role of electrification in achieving this decarbonization, examining both direct electrification through decentralized or centralized heat pumps, as well as indirect electrification via synthetic energy carriers like hydrogen and e-fuels. The study aims to analyze different levels of direct and indirect electrification from technical and economic perspectives, identifying the scenario with the lowest costs and discussing the barriers to realizing this cost-effective level. This report sheds light on potential strategies for decarbonizing space heating and offers insights into the challenges and opportunities associated with electrification in the building sector.


AquaCOM Launches a Project on Advancing Aquathermal Heating and Cooling for Energy Communities

On 21 December, AquaCOM launched a project on advancing aquathermal heating and cooling for energy communities. While new technologies make aquathermal energy an efficient heating source, it remains an untapped resource. According to the organization, implementing this technology in community-led projects could provide zero-emissions heating systems that can be integrated into existing infrastructure, boosting energy efficiency and empowering citizens to accelerate a bottom-up, just energy transition. For this reason,, in collaboration with its member Ecopower and other partners, started the AquaCOM project in summer 2023. Funded by Interreg North-West Europe, AquaCOM aims to facilitate the uptake of community-led aquathermal heating and cooling systems in North-West Europe. This involves the development of replicable models, along with training and capacity building activities. More specifically, AquaCOM has the following objectives: (1) Identify strategies for energy communities to implement aquathermal energy systems. (2) Deploy three pilot aquathermal heating systems that will serve as replicability models for other energy communities. The pilots will test different types of surface water and will Belgium; Vlieland, Netherlands; and Lorient, France. (3) Create learning materials and training opportunities for energy communities interested in aquathermal energy projects. This includes providing dedicated support to 15 energy communities planning to develop aquathermal energy systems in their regions. AquaCOM has a duration of 4 years, starting on the 1st of July 2023 and finishing on the 30th of June 2027.

EU National Updates
Heating Allowance for Winter 2023/2024 in Greece
On 28 December, Greece has announced a heating allowance for Winter 2023/2024. People who qualify for the aid will receive allowances ranging from €100 to €800. Those living in mountainous areas will be entitled to €1000 extra allowance. This support is 1 January to 31 Mars 2024. More than 800,000 people in Greece have applied for this heating allowance.

Bosch invests €100 million in heat pump factory in Portugal
On 2 December Bosch announced investing a total of €100 million in a heat pump factory in Aveiro near Porto, Portugal, by the end of 2026. The sum will be used to finance new laboratories, two production buildings, and additional heat pump production lines. The group said it also wants to create an unspecified number of new jobs there in the medium term. Along with Eibelshausen near Marburg and Tranås in Sweden, Aveiro is one of the most important sites in Bosch's development and production network for heat pumps. The group wants to invest €1 billion in this segment by the end of the decade. In April, Bosch said it would invest €225 million in setting up a production facility for heat pumps in Poland.

UK announces a £6 Billion Budget for Energy Efficiency Support
On 18 December, the UK Government announced a £6 billion budget, as part of the new approach to net zero to support around a million families and hundreds of businesses in cutting their energy use. Families will benefit from a different option to heat their home for less and reduce emissions through energy efficiency measures, such as insulation for around 500,000 homes and hundreds of thousands more grants for heat pumps. The Prime Minister’s 50% increase in the heat pump grant to £7,500 currently led to a 57% increase in applications. An additional £1.5 billion of funding has been deployed to support homes and businesses in installing heat pumps.

Energy Cities Fossil-free heating and cooling workshop
On the 7 and 8 of May 2024, Energy Cities will host a workshop on fossil-free heating and cooling will be held in the city of Rijeka, Croatia. The event is the last of a series of 6 workshops which will be held in 6 different cities within the SSH CENTRE project (Social Sciences and Humanities for Climate, Energy and Transport Research Excellence): Cacak, Serbia; Grenoble, France; Arnhem, The Netherlands; Porto, Portugal; Valencia, Spain; Rijeka, Croatia.
More information and registration are available here.

Belgian Renovation Week
From 15 to 18 January, FEDARENE will host the Belgian Renovation Week. The event will take place in Maison de la Poste (Tour & Taxis), Brussels. The purpose of this event is into crucial topics like EU renovation challenges, sustainable building transitions, material innovation, and the human side of energy renovation.
More information is available here, while registration is available here.

Climamed 11th HVAC Mediterranean Congress
On 17 and 18 May will take place Climamed 2024, the 11th HVAC Mediterranean Congress. Cliamamed will be hosted by TTMD Turkish Society of HVAC and Sanitary Engineers in Istanbul, with the motto of “Towards Decarbonized Buildings and Cities” intending to represent a meaningful contribution to the solution of the problems posed to humanity by Urban Heat Island phenomenon.
More information is available here, while registration is available here.

EUROPEAN COMMISSION: The European Commission is made up of 27 Commissioners, 1 for each Member State, and represents the interests of the EU as a whole. Every Commissioner is in charge of a Directorate-General (DG) that can be compared to a Ministry at national level. The European Commission proposes legislation in the form of Regulations and Directives and submits them to the Parliament and Council for discussion and adoption.

EUROPEAN PARLIAMENT: The European Parliament is made up of 705 MEPs (see below) that are directly elected by EU citizens in 27 Member States.

MEP: Member of the European Parliament, a co-legislator within the EU that is made up of representatives from political parties throughout Member States.  

COUNCIL OF THE EU: Co-legislator, made up of representatives from Member State Governments. Has a six-month rotating presidency, currently held by the Czech Republic until the end of 2022. 

EUROPEAN COUNCIL: The European Council is made up of the leaders of the EU member states, commonly known as EU27. It defines the EU’s overall political direction and priorities but does not pass laws.

REGULATION: EU legislative act that is binding in its entirety and is to be applied in its entirety across the EU by all EU Member States.

DIRECTIVE: EU legislative act that sets out a goal that all EU Member States must achieve. However, it is up to the EU Member States to adopt their own laws on how to achieve the EU goals enshrined in the Directive. 

HORIZON EUROPE: is the EU’s main and biggest Research and Innovation programme for the period of 2021-2027. The programme has an overall funding of €95,5 billion. The program is divided into three pillars: open science, global challenges & industrial competitiveness and open innovation.  
INVESTEU: The InvestEU Programme builds on the successful model of the Investment Plan for Europe, the Juncker Plan. It brings together, under one roof, the European Fund for Strategic Investments and 13 EU financial instruments currently available. Triggering at least €650 billion in additional investment, the Programme aims to give an additional boost to investment, innovation and job creation in Europe.

EUROPEAN GREEN DEAL: is a set of policy initiatives by the European Commission with the overarching aim of making Europe climate neutral in 2050. The plan is to review EU’s energy and climate laws to bring them in line with this ambition. Green Deal also introduces new legislation on the circular economy, building renovation, biodiversity, farming and innovation.
FIT-FOR-55-PACKAGE: The European Commission’s work program for 2021 included the revisions and initiatives linked to the European Green Deal climate actions and in particular the climate target plan’s 55 % net reduction target are presented under the Fit for 55 package. The package is compiled of two parts, released on 14 July 2021 and 14 December 2021.
REHVA: is the association of European heating, ventilation and air-conditioning associations, based in Brussels.
You can find all relevant EU building policy related information in this useful document.

BILL: A bill is a proposal for a new law, or a proposal to significantly change an existing law. A bill may start in either the Commons or the Lords and must pass a series of stages in each Houses. Once the bill has been agreed by both Houses, it receives Royal Assent and becomes an Act of Parliament.

HOUSE OF COMMONS: the House of Commons is the lower house and de facto primary chamber of the Parliament of the United Kingdom. Like the upper house, the House of Lords (see below), it meets in the Palace of Westminster. The Commons is an elected body consisting of 650 members known as members of Parliament (MPs). Members are elected to represent constituencies by the first-past-the-post system and hold their seats until Parliament is dissolved.

HOUSE OF LORDS: The House of Lords scrutinises bills that have been approved by the House of Commons. It regularly reviews and amends Bills from the Commons. While it is unable to prevent Bills passing into law, except in certain limited circumstances, it can delay Bills and force the Commons to reconsider their decisions.

For additional information on European policy issues, please contact

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