EU Regulatory Updates

 

 

On July 17, the European Commission adopted its Electrification Action Plan, setting out measures to accelerate the shift from fossil fuels to electricity across buildings, industry, and transport. The Action Plan itself is a non-binding policy document and does not, by itself, introduce new requirements for Member States or industry. Instead, it establishes the Commission's policy direction and work program, with individual measures requiring further development before they can take effect.

 

Among the announced measures, the plan proposes an indicative EU-wide target for electricity to account for 46% of final energy consumption by 2040, to be confirmed as part of a broader legislative package expected in the fourth quarter of 2026. Buildings are a priority sector, with heat pumps and district heating and cooling identified as key alternatives to fossil fuel heating. The Commission also highlights reversible heat pumps as a source of efficient cooling during heatwaves. Member States are encouraged to improve the economics of electrification, including by reducing the price difference between electricity and gas and applying lower VAT rates to technologies such as heat pumps.

 

For heat pumps, the Commission aims to increase annual installations from 2.4 million in 2025 to around 4 million by 2030, a lower increase than the doubling of annual installations envisaged in the draft leaked in July. By 2027, the Commission will explore a Clean Heat Market Mechanism, which could encourage manufacturers to increase the share of heat pumps in their sales, shift manufacturers and installers toward clean heating and cooling technologies, increase competition, and narrow the upfront cost difference with fossil fuel systems. It will also examine ways to accelerate heat pump deployment in public buildings through government purchasing, softening language in the July leak that contemplated making heat pumps mandatory in public buildings through revised EU public procurement rules. Other measures include national online tools for comparing heat pump quotes, financing for heat pumps and district heating connections, and initiatives addressing the shortage of qualified installers.

 

District heating and cooling also receive dedicated objectives. The Commission aims for these systems to provide 15% of EU heating and cooling by 2030, with networks growing by 6-7% annually through 2030. By the second quarter of 2027, the Commission plans to launch an EU Waste Heat Initiative supporting investment and business models for recovering waste heat for use in district heating and cooling. The plan sets a longer-term objective for recovered waste heat to supply 11% of EU heat demand by 2050. A €15 million pilot through the European City Facility, an EU initiative that helps municipalities develop local energy investment projects, is planned for summer 2026 and would fund up to 180 local heating and cooling plans, with the longer-term aim of turning 1,000 plans into investable projects. The Commission also plans to establish a Geothermal Stakeholder Partnership by the first quarter of 2027 to address regulatory, technical, and investment barriers to geothermal deployment.

 

Finally, the Action Plan commits the Commission to adopting a separate Cooling and Heating Action Plan, including measures addressing the growing need for efficient cooling.

 

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On July 7, the European Court of Auditors (ECA), the EU's independent external auditor, found that residential renovations financed through the Recovery and Resilience Facility (RRF), the EU's post-COVID investment fund supporting national reforms and investments, are generally delivering only moderate energy savings despite up to €43 billion being allocated to residential energy efficiency. The auditors found that funding often favors projects that are easier to implement rather than deeper renovations capable of delivering larger long-term energy savings. Of 111 renovation measures examined across the EU, only three included specific energy-saving targets, with most programs instead measuring outputs such as the number of homes renovated or the amount of floor area upgraded.

 

The ECA recommends that future EU renovation funding place greater emphasis on expected energy savings, cost-effectiveness, and measurable results. It also warns that moderate renovations can lock buildings into lower levels of performance and questions whether Energy Performance Certificates (EPCs) provide sufficiently reliable and comparable data to monitor actual savings. The findings are particularly relevant as the EU seeks to accelerate renovation of its existing building stock and considers continued support for residential energy efficiency under its next long-term budget for 2028-2034.

 

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On July 15, the European Commission opened infringement proceedings, the EU's formal process for addressing breaches of EU law, against all 27 Member States for failing to fully transpose the recast Energy Performance of Buildings Directive (EPBD) into national law by the May 29 deadline. Adopted in 2024, the revised EPBD sets new requirements for improving building energy performance and decarbonization, including minimum energy performance standards for non-residential buildings, national trajectories for residential renovation, zero-emission new buildings, and solar energy requirements. The Commission has sent each Member State a letter of formal notice, giving national governments two months to respond, complete their transposition, and notify the Commission. If a country's response is insufficient, the Commission can issue a reasoned opinion, a formal request to comply and the next stage before the case could eventually be referred to the EU's Court of Justice.

 

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On July 24, the updated EU ecodesign requirements for industrial fans took effect, replacing rules dating from 2011. The regulation covers fans driven by electric motors with an input power between 125 W and 500 kW, including those used in heating, cooling, and ventilation equipment in commercial and larger residential buildings. The new rules raise minimum energy efficiency requirements and require manufacturers to provide information on fan performance at part load, giving HVAC system designers better data to optimize fan operation and controls across different operating conditions. They also introduce requirements for the availability and delivery of spare parts and access to repair and maintenance information for professional repairers. The European Commission estimates that the updated requirements will save an additional 8 TWh of electricity annually by 2030 compared with the previous rules, rising to 14 TWh annually by 2040.

 

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On July 28, the European Heat Pump Association (EHPA) called for proposed EU restrictions on per- and polyfluoroalkyl substances (PFAS) to account for differences in the availability of alternative refrigerants across heat pump technologies. EHPA supports transitioning toward non-polyfluorinated refrigerants where alternatives are technically feasible, economically viable, and safely deployable at scale. It identifies outdoor air-to-water monoblock heat pumps as among the most advanced applications in this transition, while arguing that split, multi-split and variable refrigerant flow (VRF) systems, as well as some commercial, industrial, and district-heating heat pumps, continue to face technical, safety, cost, or scalability constraints.

 

EHPA is therefore calling for application-specific exemptions from the proposed PFAS restrictions where viable alternatives are not yet available, rather than applying a single transition timeline across stationary heating and cooling equipment. For product categories without commercially scalable alternatives, the association proposes exemptions without a predetermined end date, subject to review 10 years after the restrictions enter into force. EHPA also argues that the PFAS rules should account for the parallel refrigerant transition already required under the EU's 2024 F-gas Regulation, which progressively restricts the use and supply of fluorinated greenhouse gases, including refrigerants used in heat pumps and air-conditioning systems. The association warns that overlapping PFAS and F-gas requirements could further restrict available refrigerants for some heat pump applications. The position represents EHPA's recommendations on the proposed EU restrictions rather than adopted EU policy.

 

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On August 6, the European Heat Pump Association (EHPA) reported that around 2.9 million residential heat pumps were sold across 21 European countries in 2025, an increase of 13% from 2024 and a return to growth after two consecutive years of declining sales. EHPA attributes the recovery partly to stronger financial incentives and reductions in electricity and heat pump taxation in several countries, following a market slowdown in 2023 and 2024 as energy prices eased and some governments reduced support schemes.

 

The increase brought the installed heat pump stock across the 21 countries to approximately 29.3 million units. According to EHPA, these systems collectively avoid around 25 billion cubic meters of gas imports annually, equivalent to the heat carried by more than 200 liquefied natural gas (LNG) tankers, and save an estimated €9.7 billion in annual import costs. EHPA argues that further growth will depend partly on reducing the cost of electricity relative to gas, an issue also addressed in the EU Electrification Action Plan covered above.

 

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EU National Updates

 

 

On July 21, EPIC Deploy, an initiative of the Italian Ministry of Environment and Energy Security in collaboration with the United Nations Environment Programme (UNEP), launched a funding call for sustainable, energy-efficient, and climate-resilient cooling projects in Brazil, Ethiopia, Kenya, Morocco, and Tunisia. The call covers cooling in hospitals, universities, schools, and other public buildings, as well as industrial refrigeration and cold-chain applications such as food storage and logistics. EPIC Deploy is seeking technically and financially viable pilot projects that can demonstrate measurable energy-efficiency and environmental benefits, strengthen climate resilience, and provide a pathway for wider replication and market uptake. Supporting country assessments identify opportunities including high-efficiency cooling, low-global-warming-potential refrigerants, natural-refrigerant process cooling, resilient healthcare cooling, and cold-chain improvements.
 

Applications are due by October 31 and are open to international consortia comprising public, private, and/or research entities, with at least one partner based in one of the five eligible countries. Projects require at least 20% co-funding, with grant requests starting at $200,000 and total project budgets capped at $1.2 million, according to the EPIC Deploy call page. Interested organizations must first register through the EPIC Deploy website to receive the Terms of Reference and application documents before submitting a full proposal. A recording of the July 21 launch session, providing further information on the call, eligibility, and application process, is also available.

 

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France is consulting on two changes to its Energy Savings Certificates (CEE) program, which requires energy suppliers to support energy efficiency improvements, that would make it easier to replace fossil fuel heating in existing buildings. Under the first draft ministerial order, consulted on from July 17 to August 7, CEE-supported major renovations of single-family homes would no longer qualify if heating or domestic hot water equipment capable of using fossil fuels remains after the work, except for connections to district heating or cooling networks. The proposal would also restrict CEE support for major renovations of houses and individual apartments to homes rated E, F, or G before renovation, focusing these incentives on the worst-performing housing stock. The requirement to eliminate fossil fuel heating and hot water equipment would apply specifically to single-family homes.

 

A second draft order, under consultation from July 27 to August 17, would make it easier to replace older fuel-fired boilers with heat pumps and other lower-carbon heating systems. Current CEE rules generally prevent a previously subsidized boiler from receiving CEE-supported replacement before the end of its assumed 16- to 21-year lifetime. The proposal would remove that restriction for boilers installed through projects initiated before January 1, 2021, allowing CEE support for their early replacement with air-to-water or water-to-water heat pumps, collective heat pumps, geothermal systems, or connections to district heating networks. Both measures remain proposals and could change following public consultation. If adopted as drafted, the first would apply from September 1, while the boiler replacement exemption would apply to projects initiated from the day after the final order is published.

 

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France has proposed a new incentive for industrial electric boilers under its Energy Savings Certificates (CEE) program, which requires energy suppliers to support energy efficiency improvements, as part of the country's broader electrification plan. Under a draft ministerial order consulted on from July 17 to August 7, the new measure would support the complete replacement of fossil fuel-fired industrial boilers with electric systems producing steam, superheated water, or thermal fluids above 110°C. Eligible electric boilers would be limited to capacities below 20 MW, and projects would require a preliminary technical and economic sizing study and inspection of all installed equipment. Partial electrification projects that retain fossil fuel boilers alongside new electric equipment would not qualify.

 

Existing CEE support is estimated to cover around 12-26% of investment costs for eligible projects. The proposal would therefore introduce a twofold increase in CEE support for projects that completely replace a fossil fuel boiler with an electric boiler below 10 MW, strengthening the incentive for industrial facilities to electrify high-temperature heat production. The public consultation closed on August 7, meaning the government must now finalize the ministerial order before the new measure can take effect. As the order has not yet been adopted, its eligibility requirements and incentive levels could still change following the consultation.

 

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From July 18, qualifying fixed reversible air-to-air heat pumps in France became eligible for a reduced 5.5% VAT rate, following the publication of a ministerial order establishing the required technical criteria. For systems with a rated heating capacity of 12 kW or less, single-split units must achieve an energy efficiency class of at least A++ and multi-split systems at least A+, for both heating and cooling. Larger rooftop systems must meet minimum seasonal efficiency thresholds for heating and cooling, with separate requirements for units integrating heating, cooling, ventilation, nighttime ventilation cooling, and filtration.

 

Eligible systems must also meet refrigerant and connectivity requirements. At the date the customer signs the quote, the refrigerant must comply with the global warming potential thresholds and equipment market restrictions established under the EU's 2024 F-gas Regulation, which progressively restricts fluorinated greenhouse gases used in heating and cooling equipment. Heat pumps must also be capable of connecting to a digital network to communicate heating and cooling temperature setpoints and control their operating mode. The measure therefore ties the reduced tax rate to minimum heating and cooling performance, compliance with EU refrigerant restrictions, and connected control capabilities.

 

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On July 8, the City of Athens opened applications for a program providing 100 energy class A air-conditioning systems to energy-vulnerable households, combining access to efficient cooling with measures addressing energy poverty and extreme heat. The program covers the full cost of the equipment, transportation, and installation by a certified technician, with electricity consumption meters also installed where technically feasible. The systems provide both cooling and heating, allowing households to use the equipment year-round while reducing energy consumption compared with less efficient systems.

 

The initiative is being implemented through the city's Energy Poverty Office as part of ASCEND (Accelerating Positive Clean Energy Districts), an EU-funded project coordinated by Athens. Applicants had until July 19 to apply, with beneficiaries selected according to household income, family composition, and other social vulnerability criteria. The first 100 vouchers were subsequently distributed on July 29, allowing recipients to arrange installation of the new systems with participating suppliers.

 

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United Kingdom National Updates

 

 

New UK government support for air-to-air heat pumps, which provide both space heating and cooling, has seen limited initial uptake following their addition to the Boiler Upgrade Scheme (BUS) in May. The scheme, the government's principal grant program for replacing fossil fuel heating with heat pumps, now provides up to £2,500 toward eligible air-to-air systems. According to analysis published by the Energy and Climate Intelligence Unit (ECIU) on July 10, only 45 vouchers were claimed in May. ECIU estimates that the BUS has £2.4 billion in funding from April 2026 to March 2030, although this budget also supports other eligible heat pump technologies.

 

The early figures should be treated cautiously. ECIU reported in a July 16 update that no BUS-supported air-to-air heat pump installations had yet taken place because additional accreditation documentation from the UK Accreditation Service remained outstanding. Installations will be able to proceed once the required documentation is in place. The inclusion of reversible air-to-air systems in BUS broadens government support beyond predominantly hydronic heat pumps to systems capable of providing both winter heating and summer cooling, although the policy itself was originally announced in November 2025.

 

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Events

 

 

From September 15–18, RoomVent 2026 will take place in Prague, Czech Republic, as a leading international conference on room ventilation and indoor air quality. The event will bring together policymakers, designers, researchers, and engineers to exchange technical knowledge, present new research, and discuss developments in ventilation practices and indoor environmental quality.

 

More information is available here.

 

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From October 6–8, the Swedish Energy Agency and Sustainable Heating and Cooling by Sweden will organize a study tour in Lund and Helsingborg, Sweden, focused on the transition toward more integrated and efficient district energy systems. The event will explore low-temperature district heating and cooling, heat pump integration, surplus heat recovery, electrification, thermal storage, and digitalization, showcasing how Swedish utilities are developing more circular and resilient heating and cooling systems.

 

More information is available here.

 

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On November 5, the Efficient Buildings Europe industry association will host its annual event to promote policies and technologies driving renovation of the EU building stock. The event - supported by the 48 partners of the “Renovate Europe” campaign - will gather industry, civil society and policymakers from across Europe.

 

More information is available here.

 

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On November 19, the Federation of European Heating, Ventilation and Air Conditioning Associations (REHVA) will host its Brussels Summit at the European Economic and Social Committee in Brussels. Under the theme “HVAC Pathway to Energy Security,” the event will bring together policymakers, industry representatives, researchers, and HVAC professionals to discuss EPBD and EED implementation, the EU Heating and Cooling Strategy, heat pump deployment, indoor environmental quality, and practical approaches to building renovation and decarbonization.

 

More information is available here.

 

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On December 1, the European Heat Pump Association (EHPA) will host the Heat Pump Forum & Awards 2026 in Brussels, Belgium. Under the theme “Secure Heat for a Competitive Future,” the event will bring together policymakers, industry leaders, and experts to discuss the role of heat pumps in supporting Europe’s energy security, competitiveness, and climate objectives, while showcasing innovative projects through the annual Heat Pump Awards.

 

More information is available here.

 

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Glossary