September 21. 2023. 1:18

The Daily

Read the World Today

Key EU lawmaker: Europe ‘needs to stay ahead of the game’ on heat pump manufacturing

Natural refrigerants like propane are the way forward to replace climate-warming fluorinated gases in heat pumps, Green EU lawmaker Bas Eickhout argues in an interview with EURACTIV.

Interview highlights:

  • Heat pumps are Europe’s best bet for reducing dependence on fossil fuel heating.
  • Gas industry lobbied against an earlier adoption of heat pumps.
  • The green transition will mean less jobs in some industries, like the heating sector, while others will create jobs.
  • German Finance Minister Christian Lindner is holding up public investments needed to accelerate the green transition.
  • Switching to natural refrigerants is the only chance that European manufacturers have to compete against foreign rivals.

Mr Eickhout, why do you think there is such a focus on heat pumps today?

I think the most logical reason is, of course, that where we are having high energy use and with that CO2 emissions, we are looking at alternatives to lower our fossil dependency.

This debate has accelerated because of the war on Ukraine, where our dependence on Russian fossil gas has come home to haunt us.

But we also want to get rid of that fossil dependency in its entirety. So that’s why we’re looking to electric cars, and industry is working towards electrifying their fleet.

When it comes to household heating, we’re undergoing the same process. Amazingly, one of the most promising replacement of any heating system in our house is via heat pump. This is putting heat pumps centre stage as the most effective way of changing our fossil dependency in the housing sector, which is a big source of energy use and CO2 emissions.

Heat pumps are not a new technology even though their efficiency is widely lauded. Why didn’t heat pumps make a breakthrough before? The technology behind it hasn’t changed much, after all.

That’s a good question! I think it has to do with our fossil fuel dependency, which has been an addiction of sorts.

In the energy sector, we always had this mantra: cheap, reliable and clean. Let’s be honest, we focused our entire economic and energy system on cheap and reliable.

And even that turned out to be a lie. We Greens were criticising Nord Stream 2, whereas many were saying the pipeline would be a reliable source of energy. How did that turn out?

On top of this, there was the huge gas lobby that was really pushing for gas as a clean replacement to coal.

I think it’s really been a lack of imagination. Established sectors like housing, who went from burning biomass [wood] to coal and oil and then to gas, were used to slight improvements – while still burning things for heat. Changing to a heat pump is doing an entirely different way of heating. It requires an adjustment rather than replacing or switching your fossil energy source.

So, I think the fossil lobby and our very short-sighted focus created and maintained this dependency. That was difficult to compete with for heat pumps back in the day, kind of like the situation we see with electric vehicles today.

That’s what we’re going to see: the next clean revolution will be in housing, although that of course requires more expenditure.

And we’re right in the middle of this revolution, a rapid transformation of the heating sector. Is the European industry equipped to handle this rapid pace of change?

Well, that’s the big challenge for now. They seem to be capable of handling it.

Of course, there’s a lot going on also in the markets. Just think of the Viessmann takeover [by the US-based HVAC giant Carrier] which has shown the interest of the capital markets.

I think for now, you see an acceleration of the deployment of heat pumps. And let’s see how fast that acceleration can go. I’m not saying that there are no challenges, but you do see an acceleration.

Those are the manufacturers, which are just one part of the value chain. Will there be enough skilled workers to fill the jobs that are being created?

In a way, we have skills issues all over the place. And that has been aggravated because of growth in the clean heating sector, but it is a problem we see in many sectors.

I think there is a positive part of it even though it is of course your task as a journalist to point out the problems. But let’s be honest, we [Greens] have always said that the green economy also delivers a lot of employment.

And that’s exactly what you see now! So you could say that there is a problem, with workers needing to be retrained and upskilled to handle heat pumps, or you could argue that we’re experiencing a green jobs boom.

During such a transition there are always challenges to make sure everything runs smoothly, that’s unavoidable.

But I think the more positive message that I really think should be communicated too is that this is another indication of investments creating green jobs in Europe.

The transition is not always 100% smooth, there will be bumps down the road. But that is what it means to transform an economy.

The legacy heating value chain in Europe employs almost 2 million people. Do you think that the switch to clean heating is capable of matching this amount of jobs?

Again, this is a transition that will mean an increase in employment, massively. That’s what’s going to happen.

You could also do nothing, but is that an alternative?

Climate protection is not negotiable, and security policy has just provided another boost to our climate agenda. We’re already pretty late with this transition, therefore I can understand that people feel like there is a lot happening in a very short time

So it is important that we politicians are honest to avoid government rows like the ongoing controversy in Germany: change is happening.

That will mean an increase in jobs in some sectors, and a decrease in others. But there will be jobs.

You mentioned Germany, where a policy to boost uptake of heat pumps has caused a drawn-out government fight. What other tools are available to governments to increase the acceptance of this “new” clean heating technology?

The German government is now working on a compromise on this, but generally speaking, heat pumps are considered big investments that pay off over time.

Depending on the house and other circumstances, the rate of payback is going to be different. Is it an independently standing house, are the walls flat, how well isolated is it?

All this comes back to one term: investment is needed to achieve this transformation. That is something I find lacking in the German plan [termed a boiler ban], where the fiscal headroom is limited due to the German Finance Minister Christian Lindner holding onto the purse strings tightly.

He is stopping any kind of investment discussion, even though we need a push for more European funds and to give EU countries extra fiscal leeway when it comes to supporting green investments by reforming the stability and growth pact [the EU’s fiscal framework].

All these questions are on the table. And we have a German Minister of Finance who doesn’t want to talk about them. But we need these investments. And that’s where I think the problems lie.

For Europe, we’re looking at investment needs of about €500 billion per year. That’s a lot of money. Not all of it will be public, much of it is going to be coming from private investors. But we will need public money to lead the way.

So it could be time to empower the European Investment Bank further, but again, the German Finance Minister is opposed.

During this transition, we’d need consistent policies in order to help people who live in houses that need extra assistance – making the climate agenda more social. And that makes it so complicated, when different government parties have different agendas.

On another topic, you’re very busy with negotiations on the revised F-gas regulation. It is already your second time taking charge on a reform, the last being ten years ago. It appears the law is much more controversial this time around, what changed?

F-gases are siblings to the infamous CFCs that once threatened the ozone layer – they were phased out via the Montreal agreement. They possess a high climate impact, much higher than CO2 per molecule.

Today, the hole in the ozone layer is shrinking. But we have created additional emissions from greenhouse gases with fluorinated gases. The F-gas regulation aims to decrease those emissions from European appliances.

Heat pumps, as well as air conditioners, rely heavily on F-gases for their functioning. In their role as refrigerants, they concentrate and transport energy. Everything that needs a kind of heating element uses F-gases.

Thus, we want to reduce their use and shift towards climate-friendly natural alternatives where possible instead. Because F-gases aren’t necessarily needed for the functioning of heat pumps, natural alternatives like propane are possible.

We started this process ten years ago, with the last F-gas regulation. But back then, ambition in the EU was rather low to get this done. So we’re in a hurry now, but the clampdown on F-gases are also a chance for the European heat pump industry.

Companies like the German heat pump maker Viessmann are already producing models that run on natural refrigerants.

That, and the limitless innovation capacity of the chemical industry, is the reason why we need to ensure that we transition from F-gases to natural alternatives. Because otherwise, the chemical industry may come up with gases that work, but instead of damaging the climate they are carcinogenic.

Let’s not make the mistake we did when banning CFCs and replaced them with climate-damaging F-gases, but rather get it right this time by moving to natural alternatives.

So what we’re looking for now in the legislation is to stimulate and accelerate that transition to natural cooling elements, while not hindering the acceleration of the rollout. And to avoid this, we are pushing for an emergency brake on the clampdown that the European Commission can pull if the heat pump rollout is endangered.

Would you say the European industry is best placed to handle natural refrigerants, giving them a leg up on their foreign competitors?

That’s the funny thing. Most of the competitors are Japanese and American, who get their refrigerants from the respective chemical giants and pay a patent fee for them.

But for Europe, I think this law is going to boost innovation and lower our impact on the environment. So yes, we are ahead of the game.

But we need to stay ahead of the game. So we can’t sit still, that’s what we did with electric cars. And now the biggest car exporter in the world is China, with a vibrant EV industry.

The chances that we win on the natural alternatives are much higher than with F-gases, because we’ve already lost that battle.

[an error occurred while processing the directive]