Clean Energy Technology Observatory, Heat pumps in the European Union : status report on technology development, trends, value chains and markets : 2024

This report provides an update on the state of the art of heat pump technology, including its application in buildings, industry, and district heating and cooling. It presents installed capacity, sales and projections, and an analysis of research and development trends. It also discusses EU competitiveness in the global value chain and identifies potential supply risks. As of 2023, there were more than 21.5 million heat pumps installed in the EU. Between 2013 and 2022, heat pump sales experienced continuous growth, reaching a peak in 2022 when they increased by 44% compared to the previous year. However, 2023 saw a slowdown, with a drop of 7% compared to the record year. The main reasons for the slowdown were the decrease in gas prices, the overall economic context (construction activity, interest rates, inflation), perceived unstable financial schemes, and political uncertainty. Other barriers might hamper the rate of growth in the medium term, such as installer shortages, volatile metal prices and disruptions to the supply of components such as semiconductors or permanent magnets. The European heat pump industry has committed to significant investments, with over EUR 7 billion earmarked for capacity expansion between 2020 and 2030. However, the 2023 sales decline has put pressure on companies to recover their investments. At the same time, the industry's trade deficit declined by one-third in 2023. The European heat pump industry is poised to capitalise on the anticipated growth in demand, leveraging its established presence, expertise, and innovation to capture a significant market share in the long term.