The measure is intended to cap the production of heat pumps to newly forecasted levels. Since the spring of 2023, the residential heat pump heating market has been going through a slowdown in demand. Previously in September 2023, Daikin had already announced for its Ostend manufacturing site not to prolong its temporary contracts and had installed 12 days of temporary unemployment until the end of 2023 for factory operators with a permanent contract.
Based on the current market situation and analysis of economic indicators, Daikin does not expect a significant demand increase in 2024. Heat pumps are low-carbon alternatives for gas heating. They are an important solution to achieve the EU Green Deal’s carbon neutrality ambitions. Though the market for heat pumps grew tremendously in previous years, in recent months several converging factors have put a stop on the growth in demand in Europe:
- Traditional heating with fossil fuel has regained financial attractiveness due to sharp drop in gas prices.
- Several European governments have scaled back supportive measures for heat pumps in 2023.
- The European Commission postponed its heat pump action plan until after the 2024 elections.
- High inflation and higher interest rates result in current and prospective homeowners delaying their investments.
“The clean energy transition is an effort, we as society must make, one way or another. It will benefit society as a whole, create sustainable jobs and reduce dependency on fossil fuels. Even if today we go through a slowdown in demand, we believe in heat pumps as key technology for low carbon heating and cooling of buildings, and remain ambitious for the future,” says Toshitaka Tsubouchi, President of Daikin Europe N.V.