Market news, 23 July 2024
Ahead of the much-anticipated launch of the European Commission’s ‘Fit for 55’ Package, EPEE provides recommendations on how to ensure heating and cooling is ‘Fit for 55’, a crucial aspect as the EU moves towards climate neutrality by 2050.
The heating and cooling sector must decarbonise rapidly, particularly heating which is still largely based on fossil fuels. EPEE, representing the heating and cooling industry in Europe, has set out ways to best utilise the ‘Fit for 55’ package to turn this ambitious aspiration into a reality and shows the way for a more ambitious approach for decarbonising the heating and cooling sector.
EPEE believes the ‘Fit for 55’ package presents a unique opportunity to further extend the energy efficiency benefits and renewable energy contribution of the heating and cooling sector. Effective combination of policy enabling both reduction in energy demand through higher energy efficiency and enabling a fuel switch from fossil-based heat supply to clean, renewable sources is necessary to make it a success.
The EU policy framework must set a strong and ambitious target framework to align climate ambition and heat decarbonisation. To this end, the association strongly recommends that headline and supportive targets in both the Energy Efficiency Directive and Renewable Energy Directive are increased and made binding while the phase out fossil fuels in heating and cooling should be prioritised across all relevant legislation.
Integration between the heating and cooling sector and the wider energy system is crucial for a sustainable decarbonisation. To enable practical sector integration, EPEE recommends anchoring the crucial horizontal role of the ‘Energy Efficiency First’ principle across the legislative package, promoting demand-side flexibility and storage solutions in buildings whenever feasible and boosting the uptake of untapped waste heat and cold potentials.
Finally, the pricing and taxation signals for heating and cooling fuels must support decarbonisation efforts. Carbon pricing can bolster this effort but must work together with regulatory measures. EPEE recommends that additional revenues from carbon pricing are used to overcome barriers in order to deploy efficient and renewable heating and cooling solutions, particularly for vulnerable households.
The ‘Fit for 55’ Package can set the heating and cooling sector on a firm pathway to help ensure Europe makes the transition to a climate neutral economy by 2050. EPEE’s position paper highlights the many ways we can further decarbonise heating and cooling to facilitate this transition, under the auspices of the EU Green Deal and the European Climate Law.
