AccelerateEU: Heat pumps move to the centre of the energy transition

As the European Union published AccelerateEU, its response to the energy shock triggered by the war in Iran, on 22 April 2026, a familiar pattern has been unfolding. Regional and geopolitical instability is once again translating into surging energy prices, fiscal pressure on governments to protect households budgets, and renewed concerns over security of the energy supply. This time, however, the EU policy response signals a substantive need for enhanced adoption of heat pumps, recognising both their residential and industrial applications more clearly than previous EU policy frameworks.

The AccelerateEU package suggests that the EU is responding to the crisis by quickening the pace of the energy transition. In doing so, it addresses long-standing weaknesses in heat pump deployment policies: firstly by explicitly recognising both their residential and their industrial applications, and secondly by targeting the reduction of electricity taxes and levies — the most detrimental barrier for heat pump adoption by households and businesses.

While the package calls for an accelerated annual residential heat pump deployment rate of four million units per year by 2030, it misses the opportunity to establish sector-specific heat pump targets differentiated between the residential and industrial sectors.

A crisis that exposes structural dependence

On 13 April 2026, European Commission President Ursula von der Leyen started a press statement on the impact of the Middle East crisis on Europe with a sobering recap: “Since the beginning of the conflict [in the Gulf] forty-four days ago, our bill for fossil fuel imports has increased by over €22 billion.”

The EU’s policy response requires coordination on energy reserves, targeted aid for households, and temporary state aid rules. In the long term, it is clear that the EU should push for a faster expansion of renewables and nuclear power (which now account for 70% of EU electricity) and electrification, backed by the mobilisation of both public funds and private investment.

Just a day ahead of the Informal meeting of heads of state and government in Cyprus, the European Commission published the AccelerateEU package on 22 April. This response to the Iran crisis aims to deliver on two fronts simultaneously, protecting households and industry from price shocks in the short term while reducing dependence on imported fossil fuels in the long term.

The AccelerateEU communication reflects this dual objective, combining immediate relief measures (including incomebased support and energy vouchers to help vulnerable segments better cope with higher electricity and heating bills) with a broader strategy to accelerate the energy transition toward a more resilient, electrified, and homegrown energy system.

The case for heat pumps: ensuring security, efficiency, and decarbonisation all at once

Heat pumps sit precisely at the intersection of these two timelines. By utilising domestically generated electricity, heat pumps simultaneously reduce greenhouse gas emissions and lower dependence on imported gas, all while improving energy efficiency for households and firms. Our recent policy brief on the subject highlights that, while heat pumps are a mature, system-relevant technology for Europe’s transition, their deployment remains fragile and insufficient to meet EU decarbonisation goals.

A key barrier to residential deployment is the imbalanced electricity-to-gas price ratio, which weakens the case for switching to heat pumps. Additionally, high up-front costs for purchasing and installation limit uptake among households with tight budgets. In the industrial sector, heat pump deployment has been hampered by process integration complexities and broader competitiveness concerns.

We have argued that the current EU-level framework lacks policies that sufficiently differentiate between sector-specific heat pump uses, thereby failing to address the unique needs of the residential, commercial, and industrial segments. Furthermore, current heat pump targets lack the specificity required to support effective implementation across these heterogeneous sectors.

While the REPowerEU Plan called for doubling the deployment rate of individual residential heat pumps, this was not a binding target. Meanwhile, recommendations for industrial adoption remained general, with the Net Zero Industry Act describing heat pumps as a strategic technology on the path to net zero carbon emission but providing only light guidance for their deployment.

How AccelerateEU moves heat pumps forward in the EU framework

What stands out in the AccelerateEU communication is not only how frequently heat pump technology is mentioned across the package, but also the emphatic distinctions made between policy requirements and conditions for employment in the residential and industrial sectors.

Across the pillars of the plan, heat pumps are explicitly integrated into three key dimensions of the EU's response.

The first dimension is the protection of consumers and industry from price shocks.

Heat pumps are directly linked to affordability measures. Building on the Citizens Energy Package, the plan proposes targeted income support schemes and energy vouchers for households to replace gas boilers, alongside fiscal measures like VAT reductions for heat pump adoption. This positions heat pumps not only as a long-term solution, but also as part of the immediate response to price shocks.

A second dimension of the EU plan that considers heat pumps is the push to decrease and replace oil and gas consumption .

In buildings, the plan prioritises renovation and appliance replacement, explicitly calling for the substitution of gas and oil boilers with heat pump technology. For the industrial sector, it highlights the role of industrial heat pumps in delivering process heat at temperatures around 200°C, thereby expanding their relevance beyond residential use.

The third dimension is the acceleration of the transition to domestic production, clean energy, and electrification.

The EU plan introduces a coherent logic linking electrification to industrial and energy outcomes. Higher levels of electrification are expected to increase demand for clean technologies, including heat pumps. This, in turn, strengthens domestic manufacturing capacity and supports the expansion of Europe’s clean technology base, creating a reinforcing dynamic in which scaling deployment contributes simultaneously to decarbonisation, energy security, and industrial competitiveness. Heat pumps are central to this logic. The communication highlights that more than two-thirds of the heat pump units installed in Europe are produced within the EU, directly linking deployment to industrial policy objectives and to the strengthening of Europe’s manufacturing position.

Reducing electricity taxes and levies: a long-overdue adjustment

A critical element underpinning these measures is the weight taxes add to electricity bills. High electricity costs, especially relative to gas prices, remain a primary barrier to heat pump adoption for both households and firms. Exorbitant electricity taxes and levies weaken the total cost advantage of electrified solutions, as higher electricity bills make it harder for households and businesses to recover upfront costs through energy savings, even where such solutions are more efficient. The AccelerateEU package begins to address this constraint by signalling the need to reduce electricity-related charges and rebalance price signals among member states. Aligning electricity and gas price incentives is essential to making heat pumps a viable option at scale.

Conclusion: from recognition to implementation

AccelerateEU reflects a policy framework under pressure, but it also marks a significant shift in the EU's approach to implementation. Heat pumps are clearly positioned at the intersection of energy security, efficiency, and decarbonisation. They are no longer treated as niche appliances but are embedded across multiple policy instruments addressing areas ranging from consumer protection and electrification to broader industrial strategy.

However, despite the encouraging progress signalled by the AccelerateEU communication, the fact that heat pump deployment targets are insufficiently tailored to specific sectors remains a challenge. While the AccelerateEU communication introduces a trajectory for heat pump uptake and begins to address key barriers (most notably the electricity-to-gas price imbalance), it does not yet translate these goals into differentiated deployment pathways across residential, commercial, and industrial uses.

Recognising these sectoral differences is a necessary first step, but it is not enough to guide investment and implementation at scale. The next phase of EU energy policy will need to build on this progress. The upcoming EU Electrification Action Plan and Heating and Cooling Strategy offer critical opportunities to move from recognition to operationalisation by aligning targets, incentives, and sector-specific realities. Ultimately, whether or not the EU takes this next step will determine how quickly its current ambition translates into measurable delivery.

Tags: energy, Energy Prices, energy transition, heat pumps