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REGULATORY ASSISTANCE PROJECT THE PERFECT FIT | 53 PART6 Conclusions and specific policy recommendations The importance of heat pumps for decarbonising heating in the EU and indeed more widely cannot be understated. Heat pumps are central to many Member States’ National Climate and Energy Plans and bring with them a variety of energy system benefits including gas import reductions, systemic efficiency and electricity system flexibility. They are expected to have a central role at a building level and in supplying district heat networks. Heat pumps are also increasingly being recognized as a key technology to reduce reliance on increasingly volatile fossil gas imports. Heat pumps are a mature technology around the world, including in Europe, yet the required rapid and sustained growth in the number of heat pumps required to meet EU climate goals will only be delivered with thorough and coordinated policy support. Such a support package would need to involve pricing reforms which ensure heat pumps are cheaper to own and operate than fossil-fuel systems, alongside investment support for households to cover any additional capital costs associated with first-time heat pump installations. Regulation would also be needed to ban the installation and eventually the operation of fossil-fuel heating systems. All of these measures need to be coordinated by a framework which also includes skills, consumer protection and the provision of finance. The Fit for 55 legislative proposals provide an opportunity for the EU energy policy landscape to drive building decarbonisation and heat pump deployment in a coordinated manner and at the required speed. The authors of this report, a group of cross-institutional experts in the technologies and polices associated with heating, have shown that elements of the current proposals – such as new minimum energy performance standards for the EU’s worst-performing buildings, planning requirements for phasing out fossil fuels by 2040 and the extension of the ETS to cover fossil heating fuels in buildings – could be transformative. But issues with the package remain. We suggest that to strengthen the package in order to more actively support heat pump deployment: • The ETS 2 is a vital policy but it should be designed to reduce the risk of carbon prices escalating to unacceptable levels. This should primarily be achieved by ensuring it is dovetailed with other energy efficiency and policy measures and targeted revenue recycling, but could potentially also be accompanied by the introduction of an appropriate price cap. • The revisions to the Energy Taxation Directive should strongly limit the exemption for fuel poverty and rather incentivize the deployment of energy-efficiency measures to drive both heat decarbonisation and fuel poverty reductions.PDF Image | RAP Perfect Fit Heat Pump
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