The Decarbonisation of Heating and Cooling Following EU Directives

Abstract

Heating and cooling (H&C) accounts for approximately 50% of the European Union’s (EU) total energy demand and remains significantly reliant on imported fossil fuels. Hence, addressing the decarbonization of the H&C sector is key to achieving a successful energy transition. At the EU level, several legislative instruments within the Fit for 55 package directly target the decarbonization of H&C, including the core directives on renewable energy, energy efficiency, and the energy performance of buildings. At the national level, EU Member States (MSs) have developed National Energy and Climate Plans (NECPs), which are the main framework for defining national energy transition strategies, including measures to address H&C. Within the EU-funded REDI4HEAT project, a guideline was developed to support the assessment of policy documents—particularly NECPs—regarding the robustness of their policies and measures for decarbonizing H&C. This assessment framework supports the identification of gaps and opportunities through six key Strategic Policy Priority (SPP) areas, offering a set of policy options that can be further elaborated into effective measures. The design of these policy measures is informed by the Knowledge Sharing Centre—an online repository of replicable and adaptable initiatives that can be tailored to the specific geographical, social, and economic contexts of each MS.

1. Introduction

1.1. The EU Context

The European Green Deal denotes the European Commission’s (EC) recognition of the efforts that need to be made to fight climate change, mitigate its impacts, and define a clear pathway towards a climate-neutral Europe by 2050. The key goal set in this deal is to reduce greenhouse gas (GHG) emissions by at least 55% by 2030 compared to 1990 levels. Consequently, to operationalise this deal, the Fit for 55 legislative package was set up in July 2021, establishing key instruments to ensure a fair, cost-effective, and competitive transition [1]. The three directives closely related to energy efficiency and renewable energy, namely, the Renewable Energy Directive, the Energy Efficiency Directive, and the Energy Performance of Buildings Directive, are perceived as pillars of the Fit for 55 legislative package.

These directives, which must be transposed by each Member State (MS) into national law, establish key points and initiatives that need to be put in place to increase the effectiveness of the energy transition efforts across different sectors of the EU economy. Considering that heating and cooling (H&C) accounts for about half of the EU’s energy consumption [2], it is no surprise that this is one of the sectors addressed by all three directives, for which specific procedures are laid down. Nevertheless, to tackle this sector effectively, MSs should endorse measures that address energy efficiency to reduce and more efficiently meet H&C demand and also consider the integration of renewable energy-sourced solutions to ensure a decarbonised H&C supply.

1.2. H&C Strategies in the EU Directives

The Energy Efficiency Directive (EED) was the first directive to be revised, seeing adoption in September 2023. This directive “significantly raises the EU’s ambition on energy efficiency”, establishing energy efficiency first principle as a key legal standing principle for the first time. The 2023 recast EED raises the EU energy efficiency target [3], with it becoming mandatory for EU countries to collectively ensure an additional 11.7% reduction in energy consumption by 2030, compared to the EU 2020 reference scenario projections. MSs agreed to achieve the EU target by setting indicative national contributions using a combination of objective criteria which reflect national circumstances. Regarding H&C, in articles 25º and 26º, the EED recast establishes a set of measures to be met by the MSs:

• A comprehensive H&C assessment as part of the National Energy and Climate Plans (NECPs), considering current and future H&C needs, as well as the economic viability and technical suitability of H&C solutions.
• An obligation for municipalities with more than 45,000 inhabitants to carry out local heating and cooling planning.
• An extended definition of efficient district heating and cooling (DHC) systems, introducing two possible definitions: the first (default option) based on a gradual inclusion of renewable and waste heat sources (recognised and equally considered as renewable energy) and the second based on decreasing CO₂ content per KWh.

Despite its ambitious proceedings, the directive’s national transposition is flexible, which highlights the need to define technical and financial support mechanisms to facilitate the full adoption and operationalisation of these provisions [4,5].

The Renewable Energy Directive (REDIII) was the second one to be revised and was subsequently adopted in October 2023. This directive strengthens the provisions already in force, reinforces the measures introduced in the previous 2018 directive, and adopts an ambitious binding target of 42.5% of renewable energy in the energy mix by 2030, with a non-binding target of a further 2.5% increase. As for H&C, the directive sets, for the first time, binding targets to be adopted by the MSs and a strong policy framework that will favour the integration of renewable sources in different areas.

More specifically, it includes the following provisions that have a direct impact on H&C:

• A binding target to increase the share of renewables in H&C by 0.8% per year from 2021 to 2025, and then by 1.1% per year from 2026 to 2030;
• An indicative target to increase the share of energy from renewable sources and waste heat in district heating and cooling by 2.2% per year from 2021 to 2030;
• A new indicative target for the share of renewables in industry, requiring an average annual increase of 1.6 percentage points for the periods from 2021 to 2025 and from 2026 to 2030;
• A new indicative target of 49% of renewable energy in buildings in 2030.

REDIII also considers the role of renewable electricity in meeting the renewable energy target in H&C and the contribution of waste heat towards the renewable energy targets in buildings, industry, and H&C. EU countries should promote renewable H&C to reach 49% of the renewables share in buildings by 2030. It should be highlighted that this energy should be produced on site or nearby or should otherwise be taken from the grid. Additionally, countries should also establish appropriate measures in their national regulations, building codes, and support schemes to further promote the uptake of renewable-based solutions in buildings.

Furthermore, the new article on district heating and cooling outlines how MSs can improve their use of renewable energy and waste heat, encouraging MSs to increase the share of energy from renewable sources and waste heat in district heating and cooling. The new target has been increased from 1 to 2.2% compared to the previous version of the directive, aiming to guarantee that waste heat and cold contribute to the renewable targets for DHC, H&C, industry, and buildings. MSs must also encourage large DHC system operators to connect third-party suppliers of renewable energy from renewable sources and waste heat. To reduce the cost of financing renewable H&C and waste heat and cold projects, MSs should establish coordination frameworks between the operation of the DHC systems and potential sources of waste heat and cold in the industrial and tertiary sectors or develop risk mitigation frameworks.

Finally, bioenergy will also have a role to play as the directive partially revised and reinforced the sustainability criteria for biomass [6,7].

The Energy Performance of Buildings Directive (EPBD) was the third measure to be revised, seeing publication in April 2024 with the aim of achieving a fully decarbonised building stock by 2050. The importance of the building sector is unparalleled and, as the directive’s rationale outlines, this sector is accountable for 40% of the energy consumed in the EU and 1/3 of EU’s energy-related GHG emissions; in addition, approximately 80% of the energy used in EU residential sector is for H&C and domestic hot water (DHW). From the wide range of provisions set out in the new EPBD, the most relevant to the decarbonisation of the H&C sector are as follows:

• Minimum energy performance standards and trajectories for progressive renovation, covering both residential and non-residential buildings and setting targets for zero-emissions new buildings by 2030.
• The renovation of the worst stock in terms of energy performance (setting a target to increase the average energy performance of the national residential building stock by 16% by 2030 in comparison to 2020, and by 20–22% by 2035, considering the national trajectories).
• The definition of national Building Renovation Plans, which undoubtedly must address the reduction of H&C needs, should be implemented with supporting initiatives such as building renovation passports to guide building owners in their phased and deep energy renovations.
• The increased deployment of solar technologies in all new buildings and certain existing non-residential buildings where technically and economically feasible, and efforts to ensure that new buildings are solar-ready (fit to host solar installations).
• Gradual phase-out of boilers powered by fossil fuels, starting with the end of subsidies for stand-alone fossil fuel boilers from 1 January 2025.
• Energy Performance Certificates should include a detailed assessment of the performance conditions of heating, ventilation, air conditioning, and DHW systems, aiming to increase the planned replacement of H&C solutions with more efficient and renewable-based options [8,9].

1.3. National Energy and Climate Plans

The National Energy and Climate Plans (NECPs) were introduced by the Regulation on the governance of the energy union and climate action (EU)2018/1999 [10]. These are part of the Clean Energy for All Europeans package, adopted in 2019. This represents the most important national framework in terms of energy and climate planning, establishing the 10-year national energy and climate plans for the 2021–2030 period.

At the heart of energy policies are the NECPs, which cover all sectors of the national economy, identifying measures for each one and setting targets. Their structures are defined by the Commission’s Implementing Regulation [11] and encompass five dimensions: (i) decarbonisation, (ii) energy efficiency, (iii) energy security, (iv) the internal energy market, and (v) research, innovation, and competitiveness. Regarding H&C, most NECPs treat this issue as cross-cutting throughout the document, given its interaction with several areas of activity. Despite this decentralised approach, NECPs are expected to tackle H&C, i.e., set targets, identify options, and propose policies and measures. However, in most cases, H&C is not strongly addressed, and a more in-depth assessment is needed to identify weaknesses and options to strengthen the H&C framework. Thus, it can be stated that there is a need to review the robustness of policies and measures in terms of awareness, collaboration, decentralisation, norms, standards, incentives, and financial instruments, among other aspects.

Considering the recent provisions laid down by the Fit for 55 legislative package, and more specifically the requirements set in the main directives, it is paramount to take a critical look at the NECPs and identify the gaps and opportunities ahead for H&C decarbonisation. The way this process occurs may be perceived as an opportunity for the long-term implementation of the NECPs since these plans are to be exhaustively scrutinized and regularly updated. This is the framework of the work developed by the REDI4HEAT project, which aims to provide resources that assist with the NECP evaluation, as well as the identification of measures able to support H&C decarbonisation.

2. Methodology

The endorsement and evaluation policy are pillars of the LIFE Programme [12], the EU’s main funding instrument for the environment and climate action. The programme focuses on several areas, and it is within the Clean Energy Transition sub-programme that the REDI4HEAT project [13] is developed. Its work aims to assist MSs in the implementation of the RED III provisions on H&C, providing methodologies, resources, and tools that can be widely used by H&C stakeholders, from public authorities to businesses and organisations. This will allow the clear identification of the priorities that need to be tackled, as well as the establishment of further support measures able to effectively prompt the decarbonization of H&C, as schematically represented in Figure 1.

One of the tools developed is a guideline that intends to assist stakeholders and authorities in the assessment of national and local H&C policy documents [14], including NECPs. This guideline supports the robustness evaluation of policy documents on H&C decarbonisation, providing policy options that are to be further refined into effective policy measures, namely through the assessment of existing tools, resources, and best practices, available via an online Knowledge Sharing Centre [15].

2.1. Guideline for the Assessment of the H&C Sectors in the NECPs

Decarbonising H&C depends on the improvement of energy efficiency and savings, as well as on the transition to renewable energy sources. The guideline developed aims to support the assessment of national or decentralised policy documents related to H&C, particularly the NECPs, with a focus on enhancing the use of renewable sources for decarbonisation.

Also, it helps with the identification of weaknesses, key measures, and specific implementation actions needed to improve policy documents. During this work, the assessment focus was on the NECPs. Given the common structural requirements established by the Commission’s Implementing Regulation [11], the guideline is applicable to all NECPs, covering a range of topics to evaluate how each plan addresses H&C decarbonization. The assessment is designed in two phases, each further divided into three and two steps, respectively, as depicted in Figure 2.

The 1st phase aims at analysing the NECP to identify weaknesses and gaps related to the predefined Strategic Policy Priority Areas (SPPAs) [16]. These areas group multiple policies around specific themes that reflect key intervention priorities aimed at accelerating the use of renewable energy sources in H&C. The goal is to assess how the policies and measures in the NECP perform within six SPPAs:

• Policy package per sector: residential (buildings), non-residential (buildings), industry, and DHC networks.
• Multi-level governance collaboration.
• Active involvement of local/decentralised authorities.
• The involvement of all key actors.
• Awareness raising and capacity building.
• Ensuring a smooth transition for vulnerable groups.

The assessment is carried out by evaluating how the criticality within each SPPA is addressed and grasping missing elements that could successfully support H&C decarbonisation. This evaluation is a three-steps process:

• Step 1 evaluates the relevance or importance of each SPPAs for the achievement of the H&C decarbonisation targets (with a focus on renewable energy deployment).
• Step 2 assesses the completeness of the proposed policies and measures outlined in the NECP, specifically in relation to the H&C decarbonisation target for each SPPA.
• Step 3 presents the scoring results for relevance (step 1) and completeness (step 2), which are automatically combined (multiplication of the relevance factor by the completeness factor) into a policy score. This is then used to rank the SPPAs accordingly and subsequently identify the Strategic Policy Priorities (SPPs). The policy score ranges from 1 to 10 and the highest scored SPPAs are the most relevant ones to tackle.

The 2nd phase focuses on identifying appropriate policy options to address the SPPAs prioritised in the 1st phase. This phase proposes a two-steps approach to identify appropriate policy options and determine the appropriate monitoring indicators:

• Step 1: Appropriate policy options are proposed based on the Key Success Factors (KSFs) that informed the methodology used to define the SPPAs. These KSFs are complemented by the Knowledge Sharing Centre, particularly the Heat Transition Toolbox, which provides useful tools and practices across European countries. Based on potential linkages between the SPPAs and these KSFs and tools, a list of policy options corresponding to the identified SPPs is proposed. The selection of the most appropriate policy options must consider the context of the MSs.
• Step 2: For each selected policy option linked to a KSF, a specific Key Performance Indicator (KPI) will be proposed to ensure the appropriate monitoring of the policy option implementation. Each KSF is associated with a KPI, which is a measurable value that allows us to monitor the effectiveness of a KSF in achieving the intended outcome or objective.

This assessment was conducted to analyse the NECPs from Croatia, Germany, Greece, Poland, and Portugal, which served as case studies. It is found that this assessment empowers policy advisors, not only to identify weaknesses but also to prioritise and recommend concrete actions for improvement. The structured approach using SPPAs, KSFs, and KPIs ensures that the recommendations are targeted and aligned with the overall goal of decarbonising H&C. Moving forward, these findings should trigger the development of specific, actionable measures to revise and improve the NECP, incorporating missing measures, strengthening existing initiatives, and enforcing the establishment of monitoring mechanisms based on defined KPIs. To this end, a robust portfolio of resources, as detailed in the next chapter, was assembled in an online Knowledge Sharing Centre to support the identification of adequate measures based on existing resources, previous initiatives, and best practices. The identified measures should be further detailed by consulting these resources to ensure that they effectively support the transition to sustainable H&C solutions.

2.2. Available Resources

Over the years, EU MSs have endorsed several initiatives to reinforce the integration of renewables in H&C. The resources, materials, and lessons learned from these initiatives have been collected and made available in an online Knowledge Sharing Centre to inspire and support other MSs in replicating and adopting some of these initiatives in their specific circumstances. The Knowledge Sharing Centre presents a wide range of resources, namely, (i) Policies and Legislation, (ii) Best Practices, (iii) EU-related projects, (iv) Studies and Strategies, and (v) the Heat Transition Toolbox designed to support national, regional, and local stakeholders during their heat transition path. This Europe-wide toolbox provides a wide range of renewable H&C system specifications for individual end-users, as well as for entire heating networks, complemented by comprehensive guidelines for setting up businesses along viable models and implementing key financing strategies. Beyond technical support, these are also resources that extend to citizens fostering inclusive co-creation initiatives and promoting inclusive participation and awareness within communities. The tools are categorised according to their geographical scope (national or local), the sector of impact (district heating, residential buildings, non-residential buildings/industry or other), relevant stakeholders (government, energy industry, private investors, citizens, municipalities or local authorities), and category (financial, technical, market and capacity building, policy or other). In brief, more than 70 resources were mapped, 63% of these having local scope and 37% a national one. Concerning impact sectors, 41% of the measures decarbonization target district H&C networks, 19% target the residential sector, only 7% target the non-residential buildings/industry, and almost 33% impact other sectors. Finally, looking at the categories of tools, 46% have a technical focus, 18% are dedicated to market and capacity-building activities, 13% are dedicated to financial initiatives, 7% relate to policies, and 14% relate to other categories. The tools and resources available come from previous EU projects, national authority programmes, NGO initiatives, and even private organisations, aiming at supporting public authorities or stakeholders involved in H&C planning. Clearly, most of the initiatives examined have a technical focus, with a very strong emphasis on promoting the integration of renewable energies in DHC network systems. The residential sector is also well represented, while the non-residential building/industry sector needs to be enhanced. Thus, it can be inferred that policies to support the decarbonisation of the H&C sector are still lacking. In addition, the Knowledge Sharing Centre includes a total of 14 tools which benefit from a more detailed description (factsheet available for download) and provide added value from the user’s perspective. The factsheet comprises a specific section, named “tool evaluation”. It focuses on three main/key topics, “how to use”; “key benefits” and “cost aspects”, that can be of use when obtaining a more comprehensive assessment of a particular tool. The focus for these specific tools is on a variety of topics, ranging from local sustainable H&C plans to energy poverty and renewable energy communities. In terms of the detailed information provided, the approach used can be replicated to other tools and resources, thus contributing to improving the robustness of the Knowledge Sharing Centre and the quality of the online platform.

Nevertheless, and despite its obvious potential, the Knowledge Sharing Centre should not be seen as a closed tool with no room for improvement. It should be continuously updated, contributing to achieving an even more robust asset that can support the H&C transition.

3. Results

3.1. Initial Assessment of the NECPs

An initial assessment of the NECPs of the five countries, directed by the REDI4HEAT project (Croatia, Germany, Greece, Poland and Portugal) [17,18,19,20,21], was carried out prior to the methodological definition to provide a quick overview of the sector. One of the main findings concerning H&C was that the uptake of renewables remains relatively low compared to the power sector and is mostly limited to biomass, which is the dominant renewable source used in H&C. The analysis of the NECPs also showed a worrying lack of ambitious targets as well as adequate national policy and funding measures for the transition. In terms of local involvement in the definition of such policies, the situation varies considerably from country to country. However, given that H&C is mostly planned and managed at the municipal level, there is a general need to increase the involvement of cities and local authorities in the definition of sectoral policies, as well as the resources allocated in terms of funding, knowledge, and skilled workforce.

In brief, the NECP analysis found the following:

• Inefficient measures;
• Few incentives;
• Low penetration of RES, mostly biomass;
• Lack of ambitious targets;
• No heating and cooling plans;
• Lack off data and inconsistencies in data quality.

These results corroborate the need to provide further guidance and assistance to MSs to identify the gaps in their NECPs and to plan new measures that drive the decarbonisation of H&C.

3.2. Strategic Policy Priorities

The application of the NECP assessment methodology detailed in the guideline to the five case study countries led to the identification of the SPPs mapped in

Table 1. SPPs identified in the five focus countries.

Strategic Policy Priorities (SPPs)		Croatia	Germany	Greece	Poland	Portugal
SPP#1	Define policy package per sector	x	x	x		x
SPP#2	Multi-governance-level collaboration	x	x	x		x
SPP#3	Actively engage local/decentralised authorities			x	x	x
SPP#4	Engage all key actors				x
SPP#5	Create awareness and build capacities		x		x
SPP#6	Ensure a smooth transition for vulnerable groups	x		x	x	x

.

There is a clear focus on SPP#1, Define policy package per sector; SPP#2, Multi governance level-collaboration; and SPP#6, Ensure a smooth transition for vulnerable groups, as four of the five countries have selected these three SPPs. The focus within SPP#1 is on financial measures in the form of incentives for renewable heating solutions combined with energy efficiency measures. Within SPP#2, the focus is the much-needed cooperation between national and local/decentralised authorities to ensure the smooth implementation of high-level policies and strategies, as well as to include local plans and actions into the national context. SPP#6 focuses on energy-vulnerable consumers and the essential financial support to ensure a just energy transition.

3.3. Measures to Foster the Decarbonisation of the H&C Sector

Following the identification of the SPPs and the guidelines provided by the policy options, each country defined measures to address each of the SPPs [22].

The partners identified a total of 45 different measures used to achieve the different SPPs. These measures were places in the categories of policy, financial, technical, market and capacity, and other, as presented in

Table 2. Summary of measures defined by MSs to address the SPPs.

Strategic Policy Priorities		Measures Category	Nr.
SPP#1	Define policy package per sector—DHC	Policy	3
		Financial	1
		Technical	1
		TOTAL	5
	Define policy package per sector—residential	Policy	5
		Financial	4
		Market and capacity	1
		TOTAL	10
	Define policy package per sector—non-residential	Policy	2
		Financial	3
		Technical	1
		TOTAL	6
	Define policy package per sector—industry	Policy	2
		Financial	2
		Technical	2
		TOTAL	6
SPP#2	Multi governance level—collaboration	Policy	1
		Technical	1
		Market and capacity	2
		TOTAL	4
SPP#3	Actively engage local/decentralised authorities	Policy	1
		Market and capacity	1
		TOTAL	2
SPP#4	Engage all key actors (i.e., from private sectors)	Policy	1
		Market and capacity	2
		Other	1
		TOTAL	4
	Create awareness and build capacities	Market and capacity	2
		Other	2
		TOTAL	4
SPP#6	Ensure a smooth transition for vulnerable groups	Policy	1
		Financial	2
		Technical	1
		TOTAL	4

. The subsequent tables present the measures defined in each category, as well as the resources available within the Knowledge Sharing Centre that inspired the measure and can further support its detailed definition.

3.3.1. SPP #1: Define a Policy Package per Sector

The measures addressed at DHC, as presented in

Table 3. Summary of the measures and resources addressing DHC.

District Heating & Cooling (DHC)
Categories and Measures	Resources
Policy measures
Support efficient solutions and integration of renewables in DHC	DHC+ Technology Platform [23] REWARDHeat—Serious Game [24] REScoop.eu—Support for European citizen energy cooperatives [25]
Review of current DHC regulation and strengthening of consumer protection on the different federal levels	DHC+ Technology Platform [23]
Support and strengthen the role of renewable energy communities and public energy communities for the operation of DHC networks	REScoop.eu—Support for European citizen energy cooperatives [25] German Heat Planning Act [26] ICLEI—Enabling Energy Communities—A toolkit for just transition regions [27] ConnectHeat—Community engagement for clean heat [28]
Financial measures
Restrictions on financing of non-efficient DHC	EU taxonomy for renewable investments [29] Womble Bond Dickinson: Heat Networks: Procuring Finance [30]
Technical measures
Connection to DHC supplied by RES or meeting EE standards	Danish Energy Agency: Technology Catalogues [31] Heat Network Analyst: A GIS Programme Extension for Local Authorities and Specialist Planners [32]

, focus essentially on policy measures to enforce the integration of RES into DHC networks and exploit the role of energy communities.

The measures addressing the residential sector, as described in

Table 4. Summary of measures and resources addressing residential sector.

Residential Sector
Categories and Measures	Resources
Policy measures
Indicative energy labelling for H&C appliances in the building certificate	HARP—label for existing heating appliances [33]
Ban fossil fuel systems	Environmental Fund (EF)—“Eficiência Energética em Edifícios da Administração Pública Central” [34]
Building codes (limit annual primary energy demand) for new construction (and deep renovation) include an obligatory share of RES	One-Stop Shops for Residential Building Energy Renovation in the EU [35]
Support RES energy generated on site or nearby + energy storage for lowering the energy transition cost and grid decongestion	REPLACE—Making H&C for EU consumers efficient, economically resilient, clean and climate-friendly [36]
Setting up reliable and meaningful monitoring of the transformation of the heat supply	Danish Energy Agency: Technology Catalogues [31]
Financial
Special—lower—electricity prices for supplying heat pumps	Electricity Market Reform Directive [37]
Incentive for RES in H&C incl. taxation (e.g., deduction), via building renovation	EU funding strategy for four regional H&C projects [38] VAT reduction for solar panels, solar water heaters, and heat pumps [39] Fonds Chaleur: Renewable H&C Funding [40] REPLACE—Making H&C for EU consumers efficient, economically resilient, clean and climate-friendly [36]
Promote attractive financing conditions for the installation of RES H&C	Danish Energy Agency: Technology Catalogues [31]
Facilitate access to finance	EU funding strategy for four regional H&C projects [38] Fonds Chaleur: Renewable H&C Funding [40]
Market and capacity
Consulting—providing guidance	One-Stop Shops for Residential Building Energy Renovation in the EU [35]

, focus on policy restrictions on fossil fuel systems via building codes, while also addressing the need for financial incentives to enforce the adoption of RES-based solutions.

The measures addressing the non-residential sector are presented in

Table 5. Summary of measures and resources addressing non-residential sector.

Non-Residential Sector (Including Public Buildings)
Categories and Measures	Resources
Policy
Setting up reliable and meaningful monitoring of the transformation of the heat supply	Danish Energy Agency: Technology Catalogues [31]
Support energy generated on site or nearby from RES for direct use in H&C, namely via the establishment of minimum shares	Get2c: Municipal Climate Action Map [41] Waste Heat: Manual for the estimation of regional waste heat potential [42]
Financial
Promote energy storage, namely via supporting lending products for RES installations, such as green mortgages and green loans	Get2c: Municipal Climate Action Map [41] Waste Heat: Manual for the estimation of regional waste heat potential [42]
Promote green financing schemes for decarbonization of H&C systems, namely via building energy efficiency renovation	EU funding strategy for four regional H&C projects [38]
Special/lower electricity prices for supplying heat pumps	Electricity Market Reform Directive [37]
Technical
Combine EE & RES renovation	Danish Energy Agency: Technology Catalogues [31]

and focus mainly on financing measures, schemes for green financing, lower energy prices, and support to invest in renewable energy-based solutions.

The measures relating to the industrial sector are presented in

Table 6. Summary of the measures and resources addressing the industrial sector.

Industrial Sector
Categories and Measures	Resources
Policy
Set the minimum share of RES in industrial H&C processes	Waste heat calculator [43] sEEnergies/ReUseHeat—Database for Industrial Excess Heat [44] Pandapipes [45]
Foster the roll out and adoption of high-temperature heat pumps, 500 kW to 10 MW	Spirit [46]
Financial
Introduce financial incentives to switch from fossil H&C systems to direct RES systems for H&C in industrial processes	Waste heat calculator [43] sEEnergies/ReUseHeat—Database for Industrial Excess Heat [44] Pandapipes [45]
Promote green financing schemes for the decarbonization of H&C systems
Technical
Foster the evaluation and use of potential waste heat	Waste Heat: Manual for the estimation of regional waste heat potential [42] Waste heat calculator [43]
Define audit procedures to evaluate H&C needs and identify RES solutions	Leapto11 [47]

and are, also, very much focused on financing-based measures and the need to prompt green financing schemes and support upfront investment in renewable heating solutions. On the policy side, the establishment of compulsory targets for the integration of renewable energy is listed alongside with the need to provide technical support for the uptake of specific solutions such as waste heat conversion.

3.3.2. SPP #2: Multi-Governance-Level Collaboration

The measures proposed to enforce multi-governance level-collaboration are presented in

Table 7. Summary of measures and resources addressing multi-governance-level collaboration.

Categories and Measures	Resources
Policy
Promote energy communities with the involvement of public authorities and buildings	ICLEI— How Member States can empower energy communities [48] REScoop.eu—Support for European citizen energy cooperatives [25]
Technical
Make the data of the Energy Performance Certificates and Energy Audits public and accessible for all	REPLACE—Making H&C for EU consumers efficient, economically resilient, clean, and climate-friendly [36]
Create a database for RES and EE in local and regional authorities and make it public	Best practice—access to data [49]
Market and capacity
Promote multi-level dialogue at national/regional/local to guarantee the alignment of national targets	SHIFFT—co-creation and stakeholder engagement for sustainable heating [50] Heat Roadmap Europe—Low-carbon H&C strategies for Europe [51] A 10-point plan to accelerate the EU heat transition [52]
Evaluate solar potential of existing buildings at national level	Valentin Software GmbH: T*SOL [53] Solites: online calculator for solar local and district heating systems [54]

, focusing on the need to push for data availability on H&C needs and potential sources to support this, e.g., from building performance certification schemes, as this will also enable the involvement of local actors and ensure the alignment of national and local targets.

3.3.3. SPP #3: Actively Engage Local/Decentralised Authorities

The measures proposed to address the active engagement of decentralised authorities are presented in

Table 8. Summary of measures and resources addressing active engagement of decentralized authorities.

Categories and Measures	Resources
Policy
Support the definition of local H&C plans Set up regional and local financial support programs to implement the plans	Heat Roadmap Europe—Low-carbon H&C strategies for Europe [51] Danish Energy Agency: Technology Catalogues [31] Best practice—European City Facility [55]
Market and capacity
Capacity-building programs to provide information, training and awareness-raising on the implementation of the new NECP (and supporting legislation) at national, regional and local level	Get2c: Municipal Climate Action Map [41] REPLACE—Making H&C for EU consumers efficient, economically resilient, clean and climate-friendly [36]

, focusing the need to support local authorities’ capacities and provide capacity-building initiatives, as well as guidance for the preparation of local H&C plans.

3.3.4. SPP #4: Engage All Key Actors

The measures proposed to address the engagement of all key actors are presented in

Table 9. Summary of measures and resources addressing engagement of all key actors.

Categories and Measures	Resources
Policy
Availability of information on H&C sources in buildings	CEEB system: The Central Register of Building Emissions [56]
Market and capacity
The creation of One Stop Shops (OSSs) to support the development of EPC/ESCO projects for public entities	One-Stop Shops for Residential Building Energy Renovation in the EU [35]
Increasing knowledge and skills in Energy Performance Contracting and PPP models for building renovation	Enpal Academy—efficient training and retraining to generate more skilled labour [57]
Other
Promote ESCO services for the H&C sector	European heating industry: Heating systems installers—Expanding and upskilling the workforce [58]

. They highlight the ESCO model to support the uptake of renewable H&C solutions, and the need to raise awareness and improve capacity building, particularly at the level of public authorities.

3.3.5. SPP #5: Create Awareness & Build Capacities

The measures addressing the need to create awareness and build capacities are showed in

Table 10. Summary of measures and resources addressing need to create awareness and build capacities.

Categories and Measures	Resources
Market and capacity
Increase cities authorities’ capacity towards RES transformation	Warmtenetwerk: Roadmap for Municipalities and Housing Associations [59] In-PLAN project [60] KWW: Data Compass for Municipal Heat Planning [61]
Training installers to work with RES technologies	European Heating Industry: Heating systems installers—Expanding and upskilling the workforce [58] Enpal Academy—efficient training and retraining to generate more skilled labour [57] Skills for the Energy Transition [62]
Other
Campaign to raise public awareness	HARP—label for existing heating appliances [33] BMWK: “Dialogue: Energy Change” Awareness Campaign [63]
One-stop-shops: Prepare communication campaign to support the substitution of H&C equipment	One-Stop Shops for Residential Building Energy Renovation in the EU [35]

, focusing on public authorities’ needs, as well as H&C professionals and consumers who also need to be involved in the energy transition process.

3.3.6. SPP #6: Ensure a Smooth Transition for Vulnerable Groups

Finally, the measures to address the transition for vulnerable consumers are presented in

Table 11. Summary of measures and resources addressing transition for vulnerable consumers.

Categories and Measures	Resources
Policy
Program to decrease energy poverty	Transition Point Portugal [64] Campaign “Not A Home Without Energy” [65] STEP project/H2020 [66]
Provide tailor-made information to vulnerable households on the cost-efficient methods to integrate RES in heating and cooling	SHIFFT—Co-creation and stakeholder engagement for sustainable heating [50] A 10-Point Plan to accelerate the EU heat transition [52]
Financial
Prioritize incentives to finance the replacement of low performing H&C appliances	HARP—label for existing heating appliances [33]
Support lending products for RES installations with storage, such as green mortgages and green loans, secured and unsecured, and ensure that they are offered widely by financial institutions	SHIFFT—Co-creation and stakeholder engagement for sustainable heating [50] A 10-Point Plan to accelerate the EU heat transition [52]

and focus on programmes to address energy poverty, provide specific information to these consumers, and define specific financing programmes.

Firstly, the bulk of the identified measures address the need to define appropriate policy packages, focusing on the residential sector and the need to foster the replacement of fossil fuel-based solutions, both at the policy and financial level. Conversely, regarding the non-residential sector, attention is given to financial instruments such as green mortgages and loans. However, the industrial sector requires a more detailed analysis due to the diverse heating needs across processes and temperature ranges. As for DHC networks, stronger policy measures are needed to increase the share of renewables in the energy mix. Finally, the other policy priorities are equally addressed, focusing on stakeholder engagement, capacity-building initiatives and measures to address vulnerable consumers.

4. Discussion

The provisions on H&C from the three main directives require ambitious strategies to be set in motion by all MSs. Despite the transposition of these into the national frameworks, the NECPs set the basis for an integrated approach to tackling issues of energy and climate. The NECP assessment guidelines enables the identification of the SPPs that a country must address, as well as the definition of appropriate measures to tackle each SPP within its pathway toward the decarbonization of the H&C sector. Despite its added value, the guideline is a qualitative analysis and very much dependent on the evaluator’s perception. This may be considered a limitation of the methodology. The analytical process of conducting the assessment to the five countries NECPs allowed us to test the methodology and furthermore identify the SPPs and corresponding measures each country needs to adopt.

This constituted a critical step in supporting the revision of the NECPs, conducted between 2023 and 2024, facilitating the integration of several of these measures into the updated NECPs.

Following this foundational stage, which set the basic ground for MSs to critically assess their strategy towards H&C and progress, grasping effective measures that can support the establishment of a clear and robust path towards decarbonization, the process must evolve to a more practical phase. To this end, it is essential to engage with the relevant stakeholders in collaborative discussions to co-develop initiatives that can effectively tailor and implement the proposed measures to the MS context. Once the relevant KPIs are identified, the expected impact of each measure on the decarbonization trajectory can be estimated.

The outcome of this process will be a comprehensive database of measures that supports the transition of H&C. Each measure will be detailed in a dedicated factsheet, including its category, associated KPI, proposed implementation initiatives, and the estimated impact regarding the specific geographical context for which it is intended.

This initiative is essential to foster stakeholder engagement and ensure the establishment of a stable and enabling framework in which all actors involved in the decarbonization process can operate effectively.

5. Conclusions

The three directives closely related to the energy efficiency and renewable energy are perceived as pillars of the Fit for 55 legislative package. These set mandatory targets for several economic sectors and outline key measures and steps to be taken at a national level to ensure the necessary energy transition.

The NECPs are an essential document within the EU framework, materialising the EU targets in the national context. These set the baseline and define targets to increase energy efficiency and renewable energy integration in each MS. As a transversal document, set up to be defined, monitored and regularly updated by all Member States, it is a perfect example of how MSs can cooperate and exchange best practices to implement energy transition actions.

The REDI4HEAT project aimed to contribute to this exchange and to provide resources that help MSs to identify the opportunities within their NECPs to more effectively address the decarbonisation of H&C.

From an initial comparative assessment of the MSs’ NECPs, it was possible to identify and outline six SPPAs that need to be addressed to successfully establish strategies and propose measures able to boost H&C decarbonisation.

Building on this, an evaluation methodology was developed to assess how the NECPs address H&C. This methodology is also applicable to other policy documents that cover H&C at national, regional, or local levels, including those beyond the European context. Furthermore, it facilitates the identification of the SPPs that MSs should prioritize to effectively define a pathway toward the decarbonization of H&C. In addition, the methodology offers guidance on relevant policy options to support the operationalization of a coherent and effective strategy for addressing each SPP.

In line with the guidance on policy options, and supported by a toolbox of available resources, a broad portfolio of measures has been identified to support the decarbonization of the H&C sector and effectively assist MSs in acting. These measures are defined per SPP and categorized as follows: policy, financial, technical, market and capacity and other. Most of the measures address the need to define a policy package per sector—residential, non-residential and industry—while the engagement of local/decentralized authorities is the SPP with the lowest number of suggested measures. This portfolio of measures is a key result and an essential asset that can contribute to the definition of effective pathways towards the decarbonisation of H&C in EU MSs.

Looking ahead, it is essential to maintain key stakeholders’ engagement and to promote dialogue across all policy levels, from national to regional and local, ensuring a coherent and stable policy framework. The implementation of the proposed measures should be tailored to the geographical, social, and economic specificities of each MS, guiding policies to both push the market towards competitive green H&C solutions and pull consumer demand for accessible, efficient, and renewable-based options. Furthermore, a strong commitment to developing competences and skills is essential across all levels of the value chain—from policymaking by public authorities, to market professionals involved in planning, installation, and maintenance, to organizations working with consumers on energy literacy—ensuring that consumers remain at the center of the transition strategy.