Heating and cooling

14 Jul 23

Mission possible: funding the renewable heating transition

The latest Coolproducts analysis from the European Environmental Bureau (EEB) reveals that European countries* could already have accelerated Europe’s switch to clean heating with funding that was available. The study, conducted by Trinomics, shows that in recent years European countries have spent over €3 billion on fossil fuel heating subsidies: had this amount been used to roll-out heat pumps, up to 1 million more households could be benefitting from clean, gas-free heating today.

*Countries analysed: Belgium, Bulgaria, Croatia, Estonia, France, Germany, Greece, Ireland, Italy, Latvia, Poland, Romania, Slovenia, Spain and the UK.

The study underlines the gap between the EU’s Green Deal commitments and the lack of action on the ground. 15 European countries still provided subsidies to fossil fuel domestic heating systems in 2022, demonstrating that the money is there to support the heating transition but the political will is missing to make it about cleaner, cheaper and greener technologies.

75% of European homes rely on polluting, expensive, gas-dependent heating. Today, policymakers have the chance to invest in the future and meet EU targets instead of bailing outdated fossil heating.

Total amount of subsidies for heating installations per country and per fuel (billion €)


  • Between 2020 and 2023 the countries analysed spent a total of €3.2 billion on supporting fossil heating. If this had been invested in renewable heating, up to a million additional households could have installed a heat pump.
  • This would have been a very strong start towards achieving the EU’s REPowerEU target to install 10 million heat pumps in the next five years.
  • Many households could have been better equipped to weather the fossil fuel energy crises in the coming winters, especially if funding had been directed to low-income households.
  • Despite its support to heat pumps, Italy remains the country with the highest fossil heating investments per capita (€22) and the highest overall spending on fossil fuel boilers (€1.32 billion).
  • Belgium, Bulgaria, Greece and Poland direct over 45% of their subsidies towards fossil fuel systems.
  • Spain and Ireland have the highest shares of support for renewable energy heating systems, with more than 90% of their subsidies assigned to renewable systems.
  • France has now banned fossil heating in new buildings, with a possible extension to existing buildings. Germany has also discontinued its support for fossil heating and is discussing a possible phase-out of fossil-only heating technologies.

The study also found that the average subsidy needed to allow for an affordable purchase
of a heat pump is around €4,700 per household. This means that, in the countries analysed,
this is the average sum needed for households to pay back the heat pump investment
within 7 years. The number is even lower to cut the total lifetime heating cost of a heat pump, becoming less than €2,500 per household in the analysed countries.

The money is available. €4,000 is the amount already spent per European household on 2022/2023 energy crisis. Had the same amount gone to invest in the renewable future instead, it has the potential to prevent future gas crises from draining from family and government savings another round.

Necessary purchase subsidy needed (not counting current subsidy) to make heat pump heating more financially attractive than the current reference heating technology. PBT = payback time.

Luckily, it is not too late.

Europe is now at a transformative moment for heating policies, from the finalisation of the Energy Performance of Buildings Directive to Member States co-deciding on the fate of the gas boilers with the consultation forum for ecodesign of space and water heaters. This is the moment for Europe to treat the environmental and energy poverty crises the same way it took on the recent energy supply crisis. The transition is evidently possible, just needing the final stretch of political will.