Renewable heating: the exit to Europe’s gas crisis

With gas prices skyrocketing, energy poverty threatening millions, Europe’s dependence on Russian gas at stake, and the EU’s 2030 deadline to slash emission drawing closer, it has never been clearer that we need to ramp up the heating transition. Europe is entering a crucial legislative moment to ensure all households can benefit from renewable heating.

Alberto Vela and Bich Dao report.

Not a day has gone by in the past months without gas making the headlines, from soaring prices, the conflict with Russia to the climate crisis. It is now time to properly look at the sector that keeps gas flowing through Europe’s veins: heating.

As the largest energy end-use sector in Europe, ahead of transport and electricity generation, heating appears to be the elephant in the room in the public climate debate.

Especially slipping under the radar in the green talks in Europe is the renewable alternative to fossil fuel heating, which gets little press compared to hyped climate solutions like electric vehicles, hydrogen-based solutions or new technologies like carbon capture and storage (CCS). This is despite the fact that these renewable solutions, the humble heat pumps and solar thermal heating, are mature, readily available, non-emitting technology that holds massive potential to reduce emissions and energy bills.

Time has come to break our toxic relationship with fossil gas and move towards renewable heating which holds all the keys to tackling the current energy and climate challenge. Today we launched a heating manifesto together with six major European NGOs calling on policymakers to ensure the transition towards renewable and affordable heating reaches all households in Europe.

Soaring energy poverty

Up to 1 in 4 households in the EU cannot afford to adequately heat their homes. The global energy prices crisis has only escalated energy poverty rates by exposing roughly 80 million people across Europe to the mercy of a volatile energy market this winter.

Behind this worrying trend, there are deep and structural causes. Firstly, Europe’s over-reliance on fossil gas for domestic heating, 90% of which is imported from countries outside the bloc mostly from Russia. Secondly, the overwhelming energy inefficiency of the  European building stock with 75% of the buildings in the EU failing energy efficiency standards. Lastly, the unaddressed social injustice impacts the most vulnerable household who cannot afford the upfront costs of switching to renewable heating and energy efficiency measures.

Due to the structural nature of the causes, the major share of responsibility in this energy poverty wave falls on the European policymaker’s side. While some have tried to instrumentalize this crisis to target EU climate policies, the social dimension is falling off the radar while millions of Europeans struggle to foot the gas bills and heat their homes these past months this winter.

Moreover, while this crisis took a heavy toll on citizens, seven major fossil fuel companies operating in Europe made record-breaking profits valued at nearly €100 billion in 2021. The harsh reality of energy injustice in Europe is starkly evident.

The dirtiest heating

If we look at our carbon footprint, heating is probably the single most important personal contribution we make to climate change.

Burning fossil gas not only produces carbon dioxide (CO2), its extraction and transmission across the entire fossil gas supply chain also emits methane, a greenhouse gas with an 86 times stronger climate warming potential than CO2 over a 20-year timeframe. 

Moreover, fossil heating also contributes to the public health crisis. Next to road traffic, heating is one of the biggest causes behind breaches of EU air quality standards, according to the latest findings of the European Environmental Agency. Exposure to air pollution attributed to these fine particulate matter is causing about 307,000 premature deaths in Europe per year.

Despite the worsening climate crisis and public health risk, most European governments continue to subsidise and encourage the installation of fossil fuel boilers, hampering the rollout of clean heating technologies such as heat pumps and solar thermal devices.

The coolest heating

Another way of heating our houses is possible, but it would require accelerating deep renovations of Europe’s buildings and ramping up the deployment of heating technologies running on renewable energy.

Our Paris Agreement Compatible energy model carried out together with Climate Action Network Europe, shows that by embracing bold energy efficiency measures and renewable heating, the use of fossil gas could virtually be phased out by 2035. 

Moreover, the heating sector is in a privileged position compared to other economic sectors when it comes to decarbonisation: renewable, non-emitting heating and cooling solutions have been on the market for years and the heating industry has proved to be ready to phase out fossil fuels.

Findings from the latest Coolproducts analysis of the domestic heating market revealed that 19 out of 49 companies operating in Europe are mostly selling heating systems based on on-site renewable energy. These companies are leading the heating sector out of fossil fuels before legislation prompts them to do it, which sends a clear and encouraging message to lawmakers that the heating market is ready for the transition.

Those who have already switched fossil gas off at their homes, show satisfaction with the performance of renewable heating, both for their wallets and home comfort. According to the largest survey of renewable heating users carried out by Coolproducts in Europe, 81% of consumers have seen the overall level of comfort at home improving by switching to a renewable-based heating system, regardless of weather conditions, house type or motivations.

The final political leap

Renewable heating is cheaper to run, has lower emissions, tackles poor air quality, is already in the market, and is ready to meet the scale of action. What is missing then to unlock all the potential of this transition in Europe?

Unfortunately, the switch from gas boilers to renewable heating solutions is still out of reach for many European households due to its high upfront installation costs. Heat pumps are three times more energy-efficient than gas boilers so their upfront cost can be offset by savings on bills a few years later – but significant investment is needed for their installation when consumers are left without government subsidies.

Inexplicably, taxation of many EU countries favours fossil gas at the cost of renewable electricity preventing savings on bills for those who want to switch: a bias that must be tackled once and for all in the reform of the Energy Taxation Directive (ETD).

The good news is that Europe is entering a crucial policy moment to overcome this economic barrier and rapidly scale up programmes that ensure all households can take advantage of the benefits of energy savings and renewable heating technologies. The combined effect of the EU recovery funds,  together with revenues from carbon pricing and the Social Climate Fund, can allow governments to cover a great part of the extra effort needed to finance the upfront cost of heat pumps.

Another reason why member states do not push for renewable heating lies in the Energy Efficiency Directive (EEB), which invite governments to count emissions saved with slightly more efficient gas boilers for meeting the targets. To get rid of this alibi, the European Commission’s proposal to reform the EED must establish that only savings made by switching to renewables can be accounted for meeting energy efficiency targets.

The EU policy calendar ahead opens a unique window of opportunity to galvanise the transition towards zero-emissions buildings with a very high-energy efficiency performance under a 100% renewable energy system. The phase-out of fossil fuels from heating should be enshrined, and not only suggested, in the Energy Performance of Building Directive (EPBD), the Renewable Energy Directive (RED III) and the EED.

The success of the heating transition also largely rests on the revision of the Ecodesign and Energy Labelling regulations for heating systems, and other energy files of the Fit For 55 revision such as the Gas Package, which should be geared towards shutting down this fossil market for good, as foreseen in the EU’s long-term plans, rather than pushing for blending small quantities of fossil hydrogen in the mix.

Riding on this momentum of many important political files that lock in the future of heating and energy, the European Union is primely positioned to launch a structural change to both the heating sector and the climate future of Europe. An affordable and 100%-renewable domestic reality is within reach for all residents of the Union, and it is needed to move away from the energy and climate crisis.

What we simply need is the political faith to break free from gas and support the needed transition towards green heat for all.