Knowledge Sharing Centre

To align EU legislation with the target of reducing net greenhouse gas emissions by at least 55% by 2030.
The key provisions regarding the heating and cooling sector are:
– To strengthening the EED and RED II with stricter targets, particularly in sectors like heating and cooling.
– Proposals to phase out fossil fuel subsidies, including for heating, and to support electrification and the integration of heat pumps and other efficient technologies.
-Promotion of green district heating and cooling systems to reduce emissions from the sector.

The EU ETS is a cornerstone of the EU’s climate policy and its key tool to reduce greenhouse gas emissions cost-effectively. It is the world’s first carbon market and remains among the largest ones globally. The main objective is to put a price on carbon emissions and incentivize emissions reductions in sectors including heating and cooling.
The most relevant points regarding the heating and cooling sector are:
– heating systems in industries and district heating networks will face tighter emissions caps and financial penalties for excessive emissions;
– expansion of ETS to cover more heating sectors, driving investments in low-carbon heating solutions like electrification, heat pumps, and renewable energy integration.

The Climate and Energy Framework 2030 outlines the EU plan to increase Europe’s 2030 climate ambition and achieve climate neutrality by 2050. The main objective is to set an EU-wide, economy-wide greenhouse gas emissions reduction target by 2030 compared to 1990 of at least 55% including emissions and removals.
The key provisions regarding the heating and cooling sector are:
– Renewable Energy Penetration: 40% share of renewable energy in heating and cooling by 2030;
​- Building Renovation: needs to double to improve energy efficiency and integrate renewable energy solutions;
– Outdated Heating Systems: reiforce the replacement of these with cleaner, renewable energy-based systems;
​- Energy Efficiency First Principle: minimize energy consumption before considering new energy supplies;
​- Support for Low-Income Households: ensure that the transition to renewable heating solutions is socially just and does not disproportionately impact vulnerable consumers.

The EU Strategy for Energy system integration sets out 38 actions to create a more integrated energy system. The incentive is to increase efficiency of the energy system, which accounts for 75% of EU’s greenhouse gas emissions to become climate neutral by 2050.
The overall goal is to create a more integrated energy system where different energy carriers (electricity, heat, gas, etc.) work together efficiently.
The key linkages with the heating and cooling sector are:
– focuses on integrating renewable and low-carbon technologies across sectors, particularly in heating and cooling;
– encourages the use of digital tools to optimize the interaction between heating systems, buildings, and energy grids.

The 2016 EU Heating and Cooling Strategy provided a first overview of the energy consumption and fuel mix of the heating and cooling sector in the main end-use sectors: buildings and industry. It also set out actions and tools to ensure that the heating and cooling sector contributes to the EU objective of climate neutrality by 2050. These actions and tools, which were implemented in the Clean Energy for all Europeans’ package adopted in 2019, relate to increasing renewable energy and energy efficiency in this sector, while applying in parallel an integrated approach to the energy system.
The main objetive was to promote the decarbonization of the heating and cooling sector, which accounts for about half of the EU’s energy consumption.
The key provisions are:
– Encourages the use of waste heat and renewable energy sources.
– Promotes energy efficiency improvements in buildings and industries.
– Supports the modernization of district heating and cooling networks.

The Just Transition Mechanism (JTM) is a key tool to ensure that the transition towards a climate-neutral economy happens in a fair way, leaving no one behind. As part of the European Green Deal, the Just Transition Mechanism provides resources for facing the challenge of the transition process towards the Union’s 2030 climate target and the objective of climate neutrality in the Union by 2050.
The JTM consists of three pillars:
– the Just Transition Fund
– the InvestEU Just Transition scheme
– the Public Sector Loan Facility (PSLF)
As for heating and cooling, the objective is to support regions and sectors that are most affected by the transition to a low-carbon economy, including those reliant on fossil-fuel-based heating systems, reinforcing the need to provide financial support for regions that need to transition from fossil fuel heating systems and focus on social fairness in transitioning to renewable heating solutions.