Heat pumps could offer annual energy savings up to €800 ($924) in the EU, according to the International Energy Agency (IEA). But deployment is very uneven in both residential and industrial settings, which the IEA attributes to market structures and policy design, which varies from country to country.
The IEA has examined how the adoption of heat pumps in both industrial and residential applications could reduce the EU’s dependence on fossil fuels, of which it currently imports around 80%, largely to meet energy demand across industry, buildings and transport.
The agency’s data shows that heat pumps are the most cost-effective technology for electrifying most low-temperature industrial heat, defined as below 150 C, in the European Union.
Based on 2025 prices, heat pumps have lower lifetime costs than gas boilers in 17 countries, representing around 40% of low-temperature thermal energy demand in the EU.
However, deployment remains limited even in markets where heat pumps are already cost-competitive. The IEA calls for stronger policy support to accelerate uptake.
