Market Trends of Europe Heating Equipment Industry
Heat Pumps is Expected to Hold Significant Share
- Heat pumps are widely used not only for heating purposes but also for cooling. They are mechanical heat transfer devices that collect low-grade heat from any source and then upgrade it to distribute it at a high temperature. The heat pumps find applications in the residential as well as industrial sectors. In recent years, the demand for heat pumps has grown significantly in Europe. For instance, according to the European Heat Pump Association, in 2022, Italy was the leading country in terms of the number of heat pumps sold (502.35 thousand).
- The government of the UK has already set a target of installing 600,000 per year by 2028 to reduce the UK's reliance on fossil fuels and help fight global warming. Further, in April 2022, the boiler upgrade scheme was launched, which will provide a grant of up to EUR 6,000 (USD 6,438) for residents to install a heat pump that will cover about 90,000 homes.
- Furthermore, as part of the Climate Action Plan, the Irish government plans to replace boilers based on oil and solid fuel with heat pumps powered by renewable electricity. The country announced the plan to install 600,000 heat pumps by 2030, among which 400,000 will be in existing buildings. The plan is part of a new EUR 12.9 billion (USD 13.8 billion) funding that the Ireland government has allotted for the Department of the Environment, Climate, and Communications by the end of the decade as part of the revision of Ireland's National Development Plan (NDP) 2021-2030. The Irish government also aims to retrofit about 500,000 buildings with insulation to a B2-equivalent rating by 2030.
- Moreover, MAN Energy Solutions and BASF have entered into a strategic partnership to construct a heat pump of industrial-scale at the BASF site in Ludwigshafen. The project intends to reduce greenhouse gas emissions, establish low-CO2 technologies in chemical production, and reduce the site's natural gas consumption. The planned large-scale heat pump will enable steam production using electricity from renewable energy sources, trapping waste heat from the cooling water system as a thermal energy source.
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Industrial Applications is Expected to Hold Major Share
- The heating equipment is widely used in industrial applications. The demand for steam boilers is increasing from various end-user industries in countries such as Germany, France, Italy, etc. Also, an increase in production activities and a rise in expansion projects with construction activities are propelling the demand for boilers.
- The manufacturing companies are investing in the new manufacturing facility in the region, which is projected to create demand for heating equipment such as steam boilers and heat pumps. For instance, in March 2022, Bayer announced its plan to invest EUR 1.4 billion (~USD 1.5 billion) in its pharmaceutical production sites in Bergkamen, Berlin, Leverkusen, Weimar, and Wuppertal in the coming years.
- Furthermore, the food and beverage industry is among the major industrial sectors wherein the adoption of heat pumps is anticipated to grow significantly owing to a broad number of use cases. With the industry expanding across various regions, new opportunities are expected to be created. For instance, according to Statistisches Bundesamt, the revenue of the food & beverage industry in Germany is anticipated to reach EUR 195.04 billion (USD 209.31 billion) in 2022, from EUR 150.54 billion (USD 161.5 billion) in 2016.
- To respond to the recent outlook of the governments and regulatory authorities towards the adoption of heat pumps, several businesses are increasing their efforts to enhance the adoption of heat pumps; for instance, Nestle, a Swiss company, recently announced its commitment to cutting its emissions in half by 2030, becoming carbon-neutral by 2050. As part of its sustainability roadmap, the company has a hot water heat pump at almost every Nestlé manufacturing site in Europe.
- The vendors in the market are coming up with innovative solutions and strategies to drive the adoption of heat pumps in Europe. For instance, in February 2023, Cepi and the European Heat Pump Association (EHPA) entered into a collaboration to drive the adoption of heat pumps into existing paper mills; the partnership has been established to save about 50 percent of the energy used in paper manufacturing and assist its decarbonization.
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