leadership

Europe is experiencing an energy and industrial crisis that has reopened old fears: factories that lose competitiveness, homes punished by gas and a political debate that looks backwards. But behind the noise, the data tells a completely different story: Europe is not going backwards. It is leading the largest energy transformation in the world. And at the center of that transformation is a technology that is already changing the rules: heat pumps. The real problem: an industry trapped by gas. A large part of public opinion believes that European industry is becoming more expensive because of climate policies. But, As Jan Rosenow points outOxford energy professor, in EUobserver, the reality is exactly the opposite: “I do not accept the analysis underlying the reversal narrative. The idea that green policies must be dismantled to lower prices is nonsense.” According to Rosenow, the real shock came after 2021, when Europe lost access to the cheap Russian gas pipeline and had to replace it with much more expensive LNG from the United States. The impact was brutal: energy-intensive industries stopped production and never returned to pre-Ukrainian War levels. Ember’s report quantifies it: Europe paid an accumulated extra cost of 930 billion euros during the energy crisis due to its dependence on imported fossil fuels. The conclusion is uncomfortable, the problem is not that Europe has gone too fast in the transition, but too slow. Europe leads the solution, although it does not know it yet. While the political debate goes in circles, the market advances. Europe is, today, world leader in heat pumpsa title that he does not hold by chance. In residential adoption, some countries are decades ahead of the rest of the world: Norway has 632 heat pumps per 1,000 homes and Finland has 524, according to European Heat Pump Association (EHPA). And the surprise is in the laggards, countries like Poland, Ireland or Portugal continue to grow even in years of weak market. The European industry dominates the market. European manufacturers such as Vaillant, Stiebel Eltron, Bosch, Viessmann, Danfoss, NIBE or Clivet dominate the global market. Unlike what happened with solar panels, Europe has retained manufacturing capacityalthough it still partially depends on imported compressors and electronics. Still, most employment, engineering and assembly remain on European soil. A revolution underway. Industrial projects are not prototypes: they are signs of the times: So why do we still depend on gas? Despite technological leadership, adoption is slower than it should be. There are four main blocks: Electricity continues to be weighed down by the price of gas. In much of central Europe, gas sets the marginal price of electricity. This means that even if renewables lower the cost, gas increases it again at the peaks. As the Financial Times points outthe result is an obvious paradox: the most efficient technology (the heat pump) seems expensive because electricity is distorted by gas. Taxation. The Oxford Professor details that the majority of European countries They charge more taxes on electricity than on gas. This penalizes the clean option and favors the fossil option. Lack of installers. The European Commission calculates that they are needed 750,000 additional installers before 2030. The German company Apricum adds that the experience installation remains “complex and fragmented”. Cultural barrier. As Rosenow explains: “Most industries are used to burning things.” Fire is perceived as safe and familiar, even though it is more expensive and inefficient. But this barrier disappears when you look at northern Europe: Sweden, Finland or Denmark already use heat pumps on a large scale even at sub-zero temperatures. Electrification is not a green whim. Heat pumps are not a technological anecdote, but the pillar of a broader movement: the electrification of the continent. According to the EMBER reportelectrification could halve the EU’s fossil dependence by 2040, and that two-thirds of energy demand could be met by mature technologies: heat pumps, electric vehicles, storage and solar. Today, however, the EU has barely electrified 22% of its final energy, which reveals ample room to triple that share in the coming years. The European Commission agree with this diagnosis. Brussels estimates that Europe will have to reach 60 million heat pumps installed in 2030 – compared to 25.5 million currently – to meet its climate and energy security objectives. Also, remember that the entry into force of the new ETS2 from 2027 fossil gas will progressively become more expensivenaturally accelerating its replacement by more efficient electrical technologies. Europe needs to trust its own leadership. European politics is trapped between nostalgia for cheap gas and the fear of losing competitiveness compared to other regions. But the data tells another story: Europe is leading the technology that can free it from those dependencies. While some in Brussels debate whether the Green Deal should be slowed down, the market and European engineers are saying the opposite. If Europe wants secure energy, strong industry and affordable bills, the answer is not in returning to gas, but in something much simpler: plugging itself in. 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