EU Regulatory Updates

 

 

On 12 May, the European Commission presented its updated REPowerEU roadmap, outlining the EU’s strategy to fully phase out dependency on Russian energy. The roadmap details nine targeted actions for the gradual removal of Russian oil, gas, and nuclear fuel from EU markets, to be implemented in a coordinated and secure manner. Legislative proposals are expected in June 2025 to further restrict contracts with Russian gas suppliers and introduce trade measures on Russian enriched uranium and oil transport. Since the launch of the original REPowerEU plan in 2022, the EU has made significant progress: renewable energy generation has surpassed gas, with solar and wind capacity increasing by 58% between 2021 and 2024, saving an estimated 38 billion cubic metres of gas. The revised Renewable Energy Directive now sets a binding target of at least 42.5% renewables in the EU energy mix by 2030, with the ambition to reach 45%. The Recovery and Resilience Facility (RRF) has mobilized nearly €300 billion for energy measures, supporting investments in renewables, grids, hydrogen, and efficiency upgrades. All Member States are required to submit national plans by the end of 2025 to show how they will contribute to phasing out Russian energy imports.

 

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On 21 May, the European Commission unveiled its new Single Market Strategy, aiming to make the EU’s internal market simpler, more seamless, and more robust for businesses and consumers. The strategy sets out targeted actions to dismantle the ten most harmful barriers to the free movement of goods and services, modernize sectoral rules, including those affecting the HVACR sector. Key proposals include streamlining cross-border procedures, updating product safety and eco-design rules, and allowing digital user manuals for regulated products, while maintaining consumer safety standards. The strategy also focuses on supporting small and medium sized businesses by cutting red tape, extending benefits, and promoting digitalization in compliance processes. Member States are called on to appoint high-level representatives to oversee the consistent application of single market rules and prevent new internal barriers.

 

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On 21 May, the European Commission adopted the Omnibus IV package, continuing its broader effort to simplify and modernize EU legislation to reduce administrative burdens and enhance the competitiveness of European businesses, particularly small/mid-cap businesses. The Omnibus initiative responds to industry feedback, highlighting that complex and disproportionate regulatory requirements often hinder innovation and growth. This package introduces targeted amendments across several regulations, aiming to streamline compliance, improve legal clarity, and support the EU’s green and digital transitions.

 

A key element of Omnibus IV is the revision of the F-Gas Regulation, which controls the use and trade of fluorinated greenhouse gases widely used in refrigeration, air conditioning, and heat pump technologies. The 2024 update to the F-Gas Regulation had expanded registration obligations, requiring all importers and exporters of products containing F-gases to register in the EU F-Gas Portal, regardless of the scale or climate impact of their activities. This led to significant administrative burdens, especially for smaller operators such as car dealers importing vehicles with F-gas air conditioning.

 

The Omnibus IV amendments refine these requirements by limiting registration to importers and exporters who are already subject to reporting obligations or export restrictions under the Regulation—specifically, those handling products with high global warming potential (GWP ≥ 1000). This targeted approach reduces unnecessary paperwork and compliance costs for many businesses without weakening environmental safeguards or the EU’s commitments under the Montreal Protocol. Overall, Omnibus IV exemplifies the Commission’s commitment to creating a more proportionate, efficient, and business-friendly regulatory environment, balancing the need for strong climate action with the practical realities faced by industry stakeholders in the HVACR sector and beyond.

 

 

 

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On 4 June 2025, Euroheat & Power published the DHC Market Outlook 2025 report, providing a comprehensive assessment of the European district heating and cooling (DHC) sector at the end of 2023. The report highlights a significant acceleration in sector decarbonization, with fossil fuel use declining for the first time, coal by 12.3% and natural gas by 3.7%, while renewables and waste heat now comprise 44.1% of the energy mix, a 9.4% increase since 2022. Biomass remains stable at 34.7%, notably due to decarbonization in Poland, and electrification is advancing rapidly, with large heat pumps and electric boilers increasing their shares by 44% and 80%, respectively, and waste heat supply growing by 20% to reach 4.1% of the mix. Despite a 3% decrease in heat sales, attributed to mild weather and efficiency measures, the DHC network expanded by over 3,500 km, with Italy, Austria, and Denmark reporting growth above 2.5%, and 31,200 new buildings connected in Germany. Projections for 2030 indicate at least 8.5 million additional household connections in major EU markets. The report also notes that 10.6% of Europeans were unable to keep their homes warm in 2023, an increase of six million from 2022, underscoring the role of DHC in providing reliable, sustainable heating solutions by leveraging local renewable and waste heat sources, including untapped excess heat from industry and urban facilities, which could meet the EU’s entire heat demand for buildings.

 

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On 4 June, the European Commission awarded a €13.5 million grant to Mijnwater for expanding its sustainable district heating and cooling network in Zuid-Limburg, Netherlands, under the Public Sector Loan Facility (PSLF) of the Just Transition Mechanism. The grant is enabled by a €90 million European Investment Bank (EIB) loan to Enexis, which will finance Mijnwater Warmte Infra B.V. Mijnwater’s system of deep wells in disused mine tunnels and a smart grid to supply renewable heating and cooling, reducing gas use and CO₂ emissions. The project is aligned with the Dutch National Energy and Climate Plan and the EU’s climate objectives and is included in the Territorial Just Transition Plan for Zuid-Limburg. Currently serving over 1,000 connections with a 24 km network, Mijnwater aims to expand to more than 5,400 connections and 49 km by 2031. The demand-driven system allows energy exchange and seasonal storage, further supporting a climate-neutral transition in the region.

 

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On 14 May 2025, nearly 20 companies from the heating and cooling sector came together in Brussels for the first meeting of Clean Heat Europe’s Industry Group to launch a joint manifesto calling on policymakers to do more to support clean heat. Presented in front of European Commission representatives, the manifesto urges urgent action to make clean heating more affordable and accessible, create stable regulations, and speed up the shift away from fossil fuels towards technologies like heat pumps, district heating, and solar thermal. The group pointed out ongoing challenges such as shifting regulations, complicated permitting processes, higher upfront costs, and weak infrastructure that are holding back progress. They stressed that a clear and consistent policy framework is key to cutting costs, strengthening Europe’s clean heat industry, and helping meet climate and energy security goals. The coalition includes well-known industry players and associations like the European Heat Pump Association, EuroHeat & Power, and Solar Heat Europe.

 

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EU National Updates

 

 

As of early June 2025, the €2.3 billion budget allocated to energy efficiency retrofit program MaPrimeRénov’ for the year has been fully exhausted in less than six months, prompting the French government to suspend new applications from July until at least 31 December 2025. This abrupt halt is due to a sharp reduction in the programme’s funding compared to previous years, combined with rising material costs and higher average renovation expenses, which have accelerated the depletion of available funds. The freeze leaves homeowners and landlords without access to France’s main energy renovation grant for insulation, heating, and comprehensive upgrades, significantly increasing out-of-pocket costs and complicating compliance with ongoing rental regulations for energy-inefficient properties.

 

While existing approved applications remain unaffected, individuals seeking to finance energy renovations must now turn to alternative measures. These include energy saving certificates (CEE, up to €5,000 for roof insulation), the zero-interest eco-loan (éco-PTZ, up to €50,000 repayable over 20 years), a reduced VAT rate of 5.5% on eligible works, and local or regional grants (such as those in Île-de-France or Grand Est, typically €1,000–€2,000 but subject to limited availability). The government’s decision, driven by fiscal constraints and the need to control the public deficit, risks delaying renovation projects, increasing financial strain for households, and complicating efforts to meet national and EU energy efficiency targets.

 

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United Kingdom National Updates

 

 

On 29 May 2025, as part of the UK Warm Homes Plan, new planning rules came into effect in England, significantly easing the installation of air-source heat pumps for homeowners. The UK government has removed the requirement for planning permission for heat pumps located within one meter of a property boundary, a change expected to benefit thousands of households, especially those in terraced or densely populated areas where space is limited. Previously, planning permission requirements led to frequent cancellations of installations, with industry data indicating that over one-third of potential customers abandoned projects due to these barriers.

 

Additional changes include increasing the allowable size of domestic heat pumps from 0.6 m³ to 1.5 m³, raising the permitted number of units per dwelling from one to two, and extending permitted development rights to air-to-air heat pumps that provide cooling, aligning them with air-to-water systems. These reforms are part of the government’s Warm Homes Plan and aim to accelerate the UK’s transition to low-carbon heating, supporting the target of 600,000 annual installations by 2028.

 

The pace of installations is rising: over 20,000 heat pumps were installed in the first four months of 2025, a 16% increase compared to the same period in 2024. Subsidy support remains available, with grants of up to £7,500 for homeowners in England and Wales under the Boiler Upgrade Scheme, and similar support in Scotland through the Home Energy Scotland grant and loan scheme. The Boiler Replacement Scheme in Northern Ireland has now closed. Homeowners are advised to check local rules for listed buildings or conservation areas, where additional restrictions may still apply.

 

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Events

 

 

On 11 June, the European Commission will host a session “Electrifying heat: how heat pumps fit into the European integrated energy system”, within the framework of European Sustainable Energy Week (EUSEW).

 

More information is available here.

 

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On 11 June, the European Commission will host a session “Powering up synergies: industrial heat pumps and district heating and cooling for system integration”, within the framework of European Sustainable Energy Week (EUSEW).

 

More information is available here.

 

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On 7 – 10 September 2025, VITO and EnergyVille will organize the 19th International Symposium on District Heating and Cooling in Genk, Belgium.

 

More information is available here.

 

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On 23 – 24 September 2025, EHPA will host its flagship heat pump forum.

 

More information is available here.

 

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Glossary