The shift toward low-carbon heating is moving higher on the agenda at both EU and national levels, but the effects are not unfolding evenly across countries. Building rules, electrification targets, refrigerant regulation and future carbon pricing are all reinforcing the shift away from fossil-fuel heating. For heat pump manufacturers, the challenge lies in understanding not only the policy changes but how they are starting to shape markets across Europe.
The cumulative effect is becoming clearer
European policy has pointed toward higher-efficiency, lower-emission heating for years. What is changing now is how directly that is showing up in the market. In 2025, heat pump sales rose in 12 of 16 European countries, with 2.62 million units sold overall, taking Europe’s installed base to around 28 million. The overall direction is clearer and more commercially relevant.
One direction, different market responses
Europe is still a collection of distinct heating markets, and national policy choices continue to shape how quickly adoption moves. Recent developments across Europe suggest the same broader pattern: where support is clearer and more stable, markets tend to respond faster.
Germany and the UK are among the clearest examples of how stable policy support can help build momentum, while other markets show how quickly progress can soften when support becomes less predictable. Germany, for example, saw heat pumps account for almost half of all heating systems sold last year, a milestone in a market long associated with boilers.
A change in the commercial conversation
With the heat pump market recovering by 11% in 2025 after the slump of 2024, the commercial challenge for manufacturers now extends to making product and partnership decisions that will remain relevant as the market evolves. It is evident that policy clarity is playing a more visible role in determining where momentum builds first.
At Grundfos, we work with our partners across this changing landscape, supporting them as they respond to current market conditions while preparing for the longer-term shift in heating.