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Europe HVAC Market Analysis

The Europe HVAC Market size is estimated at USD 28.67 billion in 2024, and is expected to reach USD 38.75 billion by 2030, growing at a CAGR of 6.20% during the forecast period (2024-2030).

• Many buildings worldwide, including schools, offices, homes, and factories, still rely on fossil fuels, particularly natural gas, for heating, leading to large amounts of greenhouse gas emissions. Moreover, the current global energy crisis implies that there is an urgent need to move to more affordable, reliable, and cleaner ways of heating buildings. In this context, heat pumps, which can efficiently provide heating to buildings and industries, are one the key technologies to make heating more secure and sustainable.
• According to the IEA, heat pumps have the ability to minimize global CO2 emissions by a minimum of 500 million ton by 2030, equating to the yearly CO2 emissions of all cars in Europe.
• As a result, governments are looking forward to introducing stringent regulations, including mandating the incorporation of heat pumps. This is expected to positively impact the market studied. The European Union also announced the installation of 60 million more heat pumps by 2030, which is in line with the EU targets. This could cut the European Union's gas demand for buildings by 40% by 2030 compared to the 2022 levels and decrease its energy import bill by EUR 60 billion (USD 64.28 billion).
• In March 2023, the European Commission announced key changes to state aid guidelines, which should boost the heat pump sector. The EU wants more relaxed rules on subsidies for specific European sectors to avoid losing out to the Inflation Reduction Act, the US's green technology plan. The sectors include heat pumps and others like wind turbine and battery manufacturing. The European Union has planned to install 10 million heat pumps between 2023 and 2027.
• The industry is heavily controlled by distributors and component suppliers operating in different regions. The raw materials required to manufacture HVAC equipment are electronics, plastics, and compressors. Honeywell is a company that provides AC compressors. The dependence on suppliers for enhanced HVAC systems increases their bargaining power and the production cost of the product. Therefore, the switching cost of these suppliers to other companies is also high. This adds up to the competition in the market, challenging the market's growth.
• The importance of a proper ventilation system was highlighted by the COVID-19 pandemic, and several regional governments have promoted HVAC systems to reduce the spread of the virus. This has boosted the market.

Europe HVAC Industry Segmentation

The market is defined by the revenue generated from the sale of heating, ventilation, and air conditioning equipment offered by different market players for a diverse range of end users. The market trends are evaluated by analyzing the investments made in product innovation, diversification, and expansion. Further, the advancements in the construction industry across the residential, industrial, and commercial sectors drive market growth in the studied market.

The European HVAC equipment market is segmented by equipment (air conditioning/ventilation equipment [single split/multi-splits, variable refrigerant flow (VRF), air handling units, chillers, fans coils, packaged and rooftops, and other air conditioning/ventilation equipment], heating equipment [boilers/radiators/furnace and heat pumps]), by end-user industry (residential, commercial, and industrial), and by country (United Kingdom, Germany, France, Italy, Spain, Russia, Nordic Countries, Rest of Europe). The report offers the market sizes and forecasts in terms of value (USD) for all the above segments.