EU Regulatory Updates

 

 

On 27 June, EU leaders agreed to share out the top EU jobs, finding a delicate balance between political party, gender and geography. As expected, Ursula von der Leyen was nominated for a second term as European Commission president, representing the European People's Party (EPP), which recently triumphed in the European elections. Von der Leyen still needs to be confirmed in the European Parliament, where having only a slim majority likely means that she will have to make concessions to the Greens and/or the far right. The vote, initially expected in September, will take place on 18 July. On 16 July, Roberta Metsola, from the EPP group, has been re-elected as president of the European Parliament. Former Portuguese Socialist Prime Minister Antonio Costa is set to preside over the meetings of EU leaders in the European Council. He will take up office on 1 December. The President of the European Council holds less influence than counterparts in the Commission and Parliament. Costa's role will primarily involve acting as the institution's secretariat, drafting agendas, and chairing meetings. Finally, Estonian Prime Minister Kaja Kallas was nominated as High Representative, to head the EU’s foreign policy service. Like von der Leyen, Kallas still needs to be confirmed by a majority in the European Parliament

 

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On 28 June, the Net Zero Industry Act (NZIA), was published in the Official Journal of the European Union and enters into force on 17 July. The NZIA will create favourable domestic conditions for investment in clean technologies through streamlined permitting processes and faster authorization timelines for manufacturing projects of clean tech covered. Heat pumps are included in the Regulation’s scope. To facilitate access to markets for clean tech, the NZIA requires national authorities to consider factors beyond cost in their public procurement procedures, such as climate impact and supply chain resilience. The NZIA also promotes the use of national Emission Trading System (ETS) revenues and of the Strategic Technologies for Europe Platform (STEP) to fund NZIA strategic projects.

 

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The Hungarian government has announced its intention to focus on geothermal energy during its upcoming presidency of the Council of the European Union, which will take place from 1 July to 31 December. According to an informational note from the Hungarian presidency, geothermal energy is described as a "locally available source of renewable energy that can provide, in a cost-effective way, dispatchable electricity, heat or a combination of both" with great potential for both heating and cooling and the power sector. This push by Hungary comes as the geothermal energy sector continues to experience modest growth, albeit hindered by slow permitting processes and a lack of awareness about this form of green energy. According to a recent report by the European Geothermal Energy Council (EGEC), sales of shallow geothermal energy, which links heat pumps to wells up to 500 meters below ground, grew by 12 percent in Europe last year. However, results were more mixed for deep geothermal energy, with eight new district heating systems commissioned in 2023, but fewer plants installed than in previous years. Geothermal sites generated just 20 terawatt-hours of electricity in 2023, equivalent to less than 1 percent of Europe's total consumption.

 

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The European Commission is currently collecting feedback until 31 August 2024 on the review of the ecodesign requirements for air heating and cooling products. The review aims to assess the effectiveness of the current measures and consider technological progress and circular-economy objectives. In 2016, the EU introduced an ecodesign measure that set minimum energy-efficiency requirements for air heating products, cooling products, high-temperature process chillers, and fan coil units. The measure took effect in 2018 and 2021, with the goal of reducing energy consumption and environmental impacts. As technology continues to evolve, the Commission is now reviewing the ecodesign requirements to ensure they remain effective and aligned with the EU's sustainable development objectives. Stakeholders, including industry representatives, NGOs, and consumers, are invited to provide input on the review through the European Commission's online platform. This is an opportunity for all interested parties to contribute to shaping the future of ecodesign requirements for air heating and cooling products in Europe.

 

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The European Sustainable Energy Week, held from 9 to 16 July in Brussels, featured a panel discussion on the potential of capturing waste heat. The event was co-organized by the European Heat Pump Association and Euroheat & Power. During the discussion, experts explored the opportunity to use heat generated during industrial processes, which is currently lost, to decarbonize other sectors. Speakers highlighted the business potential of recovery technologies and the role of municipalities in implementing them. For instance, energy-intensive industries such as wastewater treatment plants could use heat pumps to capture heat generated from their factories and convert it into energy for cooling and heating needs in hospitals, supermarkets, and homes. However, not all agree with this approach. In April, a group of around 30 NGOs sent a letter to the Commission urging it to exclude waste incineration from the updated definition. They argue that allowing waste incinerators to become significant suppliers of district heating would disincentivize energy-saving measures by plant operators and increase demand for incinerating polluting materials. The NGOs claim that this would lead to Europe becoming dependent on waste incineration, rather than promoting more sustainable solutions.

 

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On 7 July the Bruegel institute, a specialized research institute, published a report highlighting the significant challenges the European Union faces in meeting its energy goals. The report suggests that the EU will need to reduce emissions from its heating and cooling sectors by an amount equivalent to Slovakia's annual emissions by 2030. The estimated cost of achieving this goal is substantial, with Bruegel valuing it at €150 billion per year. While housing policy is a matter for national governments, the EU has attempted to address the issue indirectly by setting mandatory energy efficiency targets and goals for reducing energy consumption in homes by 2030 through the Energy Performance of Buildings Directive, a key component of the bloc's Green Deal climate package. According to the report, buildings account for over 40% of the EU's total energy consumption. To bridge this gap, a combination of measures will be required, including subsidies for energy-efficient upgrades in poor performing buildings, preferential loans and tax incentives for private homeowners, and energy-efficient mortgages. Additionally, the EU may need to deploy funds from its Emissions Trading Scheme. Despite these efforts, Bruegel estimates that a €20 billion annual shortfall may remain. The report highlights the significant challenges facing the EU as it strives to meet its ambitious climate goals.

 

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On 8 July, the American Chamber of Commerce to the EU (AmCham EU) released a position paper titled "EU Renovation Wave: Optimizing the energy efficiency of buildings". In the paper, AmCham EU praises the European Commission's policy proposal for building energy efficiency as a positive step forward, but emphasizes that more ambition is needed, particularly in terms of renovation strategy and targets. The organization also highlights the importance of smart and connected buildings in enabling the EU's electricity market. Buildings can not only consume energy but also store and generate it, making them a crucial component of the grid. Regarding heating and cooling specifically, AmCham EU advises that a comprehensive approach is necessary to achieve full decarbonisation. The organization recommends that future initiatives prioritize a holistic consideration of a building's overall energy performance and health benefits, including systems like heat pumps and air conditioners. This approach would allow for a more effective transition to a low-carbon future.

 

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On 15 June the Federation of European Heating, Ventilation and Air Conditioning Associations (REHVA) published its June’s Journal. This issue's editorial was written by Editor-in-chief, Jaap Hogeling: "The EPBD recast 2024 is a fact, aiming at decarbonisation and including IEQ as part of the equation". He recalls that the history of the EPBD goes far back. In 2002, 22 years ago the first version was published in 2007. Further development of the EPBD (recast 2010) required a rigorous update and harmonisation of this set of EPB standards, which resulted in a second version of the text. The current set of EPB standards published in 2017 is based on this. Meanwhile the EPBD 2018 amendment and the current EPBD recast 2024 have been published.

 

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On 17 July Paul Kenny will become the new Director General of the European Heat Pump Association (EHPA), the voice of the European heat pump sector in Brussels.? Paul Kenny is a mechanical engineer with a Master’s degree in energy and is recognised as a leading energy policy expert in Ireland and the EU. Paul ran a local energy agency – an organisation promoting the transition to clean energy at a local level – for eight years. As part of this role he established an early and successful one stop shop, which brings together home energy upgrade services for consumers. He worked as an expert for the EU’s ManagEnergy programme, which supports local and regional governments as they work towards their energy savings targets.

 

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EU National Updates

 

 

On 10 July, the European Commission hosted an event focused on decarbonisation strategies for the heating and cooling sector, which was funded by the EU under the REPowerEU plan. The plan aims to tackle the energy crisis resulting from the war in Ukraine. The event brought together beneficiaries of EU-funded projects, including the LIFE Programme, the Innovation Fund, and Horizon Europe, along with representatives from national and EU authorities. The conference highlighted innovative solutions to decarbonize the heating and cooling sector, with one notable example being the Italian city of Brescia. Brescia is home to Italy's oldest district heating systems, which supply 70% of the city's heat demands to over 21,500 residents. Italian representatives presented how Italy's district heating network has the potential to increase distribution up to 52 TWh. This would result in significant gas savings of 2 billion cubic meters per year, equivalent to the consumption of around 838,000 Italian families. The event also emphasized the importance of funding instruments in driving Europe's decarbonisation progress. The Innovation Fund is supporting innovative investments for EU industrial decarbonisation and promoting energy-efficient clean technologies that align with the objectives of the REPowerEU Plan.

 

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United Kingdom National Updates

 

 

Following Labour's resounding victory in the recent elections, securing its largest majority since the Tony Blair era, the party is preparing to push forward with its climate agenda. The new UK energy secretary Ed Miliband has outlined the government's stance on heating and cooling. Miliband has announced that Labour will abandon the previous Conservative government's policy of banning new gas boilers in homes by 2035. Instead, he aims to "show that heat pumps are affordable and will work for people.” Miliband's comments suggest a shift in approach, prioritizing the widespread adoption of heat pumps as a viable alternative to traditional gas boilers. This move is likely to spark controversy with populist factions, who may resist changes that could impact household costs and energy availability. The new Labour government's stance on net zero policy is set to be a key battleground in the coming months.

 

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On 25-26 September 2024, the European Heat Pump Association will host the European Heat Pump Forum & Award. The event will gather top policymakers and industry actors to celebrate the EHPA’s 24th anniversary. More information is available here.

 

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Glossary