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 March 27, 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 Parliament formally endorses
EPBD provisional agreement
 
On 12 March, the European Parliament formally adopted the Energy Performance of Buildings Directive (EPBD), following the draft deal agreed with the European Commission and the Council (i.e. EU countries) in December 2023. The EPBD establishes that emissions from the European building sector shall be reduced by 60% by 2030, and completely by 2050. Moreover, all new buildings shall be zero-emission as of 2030 (as of 2028 if they are occupied or owned by public authorities).
 
Each Member State is required to establish a national building renovation plan (NBRP) by 2027 to ensure the renovation of the national stock of (non-)residential buildings, both public and private. The plans shall include an overview of the national building stock, a roadmap with nationally established targets, measures, investment needs and measurable progress indicators, minimum energy performance standards (MEPS), among others. The Directive also highlights how renovations of worst-performing buildings should be prioritized, considering the high potential in terms of decarbonization and extended social and economic benefits.
 
On heating and cooling (H&C), Member States shall provide incentives to encourage the switch from fossil-fuel-based H&C systems, also replacing stand-alone boilers powered by fossil fuels. The Directive establishes that, from January 2025, Member States shall not provide any financial incentives for the installation of stand-alone boilers powered by fossil fuels, and they shall aim to completely phase out fossil fuel boilers by 2040.
 
As for the next steps, the Council of the EU needs to formally endorse the text, and it will be ready to enter into force as of 2025.
 

 
ECOS calls on the EU to decarbonize heating
 
On 5 March, the Environmental Coalition on Standards (ECOS) published a press release laying out a comprehensive toolbox on the ways to decarbonise the EU’s heating sector. Firstly, ECOS stresses the need to resume the discussions on Ecodesign and Energy Labelling rules for space heating and fuel heating and to advocate for higher energy efficiency requirements for space heaters to push the most polluting off the market. As regards the EPBD, the ECOS called for its immediate adoption of and to swiftly include a more appropriate guidance on the definition of fossil fuel boilers. ECOS also called for the publication of the Heat Pump Action Plan, which was initially set to be published by the end of 2023. ECOS also argues that the ‘side’ issues in the transition to more heat pumps should be addressed, such as skills gaps, upfront costs as well as long-term affordability.
 

 
18 European organisations urge heating and cooling decarbonizationn
 
On 14 March, the renewable energy industry alliance of 18 European organisations, a joint statement emphasizing the significance of heating and cooling decarbonisation in meeting the EU’s 2040 climate ambitions. The industry representatives argue that, while 2040 Communication acknowledges the significant decarbonisation potential of the building and industrial sectors, it fails to capture crucial heating and cooling decarbonisation, accounting for 80% of buildings’ energy consumption and 60% of industries’ total energy needs. They stress that heating and cooling is imperative to achieving the 90% GHG reduction ambitious 2040 climate target. To this end, the industry representatives are calling on to phase-out fossil-fuel heating sources, finance and de-risk sustainable renewable and recovered heat projects, ramp up clean and efficient heating and cooling solutions, and develop integrated strategies for building renovations and heating and cooling decarbonisation.
 

 
Heat pump sales fall by 5% in the EU, EHPA reports
 
On 27 February, the European Heat Pump Association (EHPA) released a press release touching upon the decreasing heat pump sales in Europe. According to EHPA, heat pump sales in 14 European countries fell by around 5% overall in 2023 compared to 2022, from 2.77 million to 2.64 million. Countries like France, Italy, Sweden, Finland, Poland, Denmark, Austria and Switzerland all witnessed heat pump sales drop last year. While the sales increased in Portugal, Belgium, Norway, the Netherlands Spain, and Germany, EHPA argues this is insufficient for offsetting the overall decrease. As to the figures for the UK, national sales grew up to 4% last year. The dropping sales come as the EU’s Heat Pump Action Plan, due to be published in early 2024 to support the sector, is delayed by the European Commission until ‘a time to be decided’. Governments increased support for people investing in heat pumps in 2022 following the energy crisis triggered by the Russian invasion of Ukraine. In 2023 much of that support was restricted or removed. The slowdown in heat pump sales puts the EU’s climate and energy targets at risk. This includes the 2030 target of 49% renewables in heating and the 60 million heat pumps to meet REPowerEU.
 

 
EPEE Releases 2024 Manifesto
 
On 28 February, the European Partnership for Energy and the Environment (EPEE) representing manufacturing companies and associations operating in the refrigeration, air-conditioning and heat pump (RACHP) industry in Europe released its manifesto for 2024. With the approaching European elections, EPEE shared its manifesto with DG ENER, which is regarded as a crucial ally in advocating policies that would further advance the EU's climate neutrality objectives and promote creative and sustainable heating and cooling solutions. Crucially, the EPEE calls on the EU co-legislators to recognize the significant role of RACHP technologies in energy efficiency and climate mitigation. Moreover, the association also indicates that it is looking forward to the Commission pressing ahead with its frozen Heat Pump Action Plan and supporting Member States in incentivizing the decarbonization of heating.
 

 
EU National Updates
 
European Commission earmarks Recovery and Resilience funds for Portugal
 
On 13 March, the European Commission has endorsed a state aid scheme in Portugal that will back the production of renewable energy equipment with EUR 350 million. The financing will be made available as direct grants to companies involved in the manufacturing of a range of renewable energy solutions, including heat pumps. The funds will be disbursed from Portugal’s Recovery and Resilience Facility with the aim of supporting the transition towards net-zero economy. As to the implementation timeline, each beneficiary will be able to receive state aid before December 31, 2025.
 

 
France's €325 million initiative promotes biomass heat production
 
On 19 February, the European Commission approved France's €325 million scheme aimed at boosting heat production from biomass. The project aims to encourage the switch from fossil fuels to renewable energy sources for heating reasons. It is designed as an annual direct grant that will run for fifteen years. The French government will subsidize projects involving biomass energy to the extent that their costs exceed those of traditional fossil fuel alternatives. The funding is available to industries, heat producers, and independent energy suppliers who are starting new biomass heat production projects with a projected annual energy output of more than 12 GWh.
 
The beneficiaries will be able to receive state aid before December 31, 2025.
 

 
 
UK government scraps heat pump plan
 
On 14 March, the UK government has refrained from its plans to fine boiler manufacturers in case they miss target for installing heat pumps. In an effort to "protect consumers," the Department for Energy Security and Net Zero released a statement on Thursday afternoon stating that the Clean Heat Market Mechanism (CHMM), which was scheduled to launch next month, has been "scrapped" until April 2025. The CHMM was designed to ensure that heat pumps account for an ever-increasing proportion of their sales, starting at 4% in the first year, and penalize manufacturers that failed to meet targets for selling clean technology in relation to boiler sales, thereby encouraging the adoption of low-carbon heat pumps. Businesses would have faced increasing fines annually for each boiler they put above that threshold.
 

 
EHPA webinar on NECPs in regards to heating and cooling
 
On 27 March 2024, the European Heat Pump Association (EHPA) will host a webinar on the NECPs and assess the plans and barriers in heating and cooling implementation.
 
More information and registration are available here.
 

 
ISEC 100% RHC Annual Event
 
On 10 April 2024, the 100% RHC annual event will take place in Graz, Austria within the framework of the International Sustainable Energy Conference (ISEC).
 
More information and registration are available here.
 

 
ISEC 100% RHC Annual Event
 
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.
 

 
Glossary
EU

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.

UK

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 Brusselsoffice@ashrae.org
 
 

 
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