Decarbonization and electrification of buildings in France: the replacement of fossil fuel boilers very far from the objectives

LCP Delta, a research and consulting firm specializing in the energy transition, revealed in its analysis of decarbonization and electrification of buildings that France has fallen behind on its objectives despite a clear political commitment. A year ago, France, which could have been one of the first markets in Europe to quickly replace its fleet of fossil fuel boilers, is today very far from this objective.

Last September, the government set the ambitious goal of tripling heat pump production by 2027 to reach a capacity of one million units per year. However, this goal seems difficult to achieve due to the current market slowdown. Several factories are operating at under-capacity, and workforce reductions are being considered to adapt activity to current demand.

For Thomas Barquin, Senior Consultant and Head of Research on Decarbonization of Heating: "The heat pump market in France is going through a difficult period, hit by rising inflation which is weighing on household budgets, the crisis in the new construction sector, and persistent confusion around aid schemes such as MaPrimeRénov'. This uncertainty is exacerbated by ongoing discussions aimed at limiting subsidies to equipment produced in France or Europe, which could prolong the confusion for consumers."

The heat pump market in decline: a sector in danger?

Decarbonization and electrification of buildings in France are two major axes to achieve the climate objectives set for 2050. In the new construction sector, the RE2020 environmental regulation now sets strict carbon and energy performance standards for new constructions and to reduce dependence on fossil fuels. The heat pump will consolidate its dominant position in this sector, but the real challenge remains renovation where gas boilers still represent a viable solution for many consumers.

Here is a market report produced by the LCP Delta firm:

Sales of heat pumps used in heating (air-water, geothermal, hybrid and air-air) are set to fall rapidly in 2024, almost -30% compared to 2023. France nevertheless remains the main market for heat pumps in Europe with a total of 400.000 systems sold by the end of the year, followed by Italy and Germany, which are also seeing their sales fall this year.
Between 2022 and 2024, the market lost more than 150.000 units in volume across all technologies. Air-water heat pumps are the hardest hit, while air-air heat pumps used for heating are stable / slightly down.
LCP Delta estimates that in 2035, approximately 750.000 heat pumps dedicated to heating will be sold, which represents a 30% increase compared to the number of pumps sold in 2023 and a CAGR of 5% for the period 2024-2035. The new construction sector will be key for the heat pump during this period as the RE2020 environmental regulation, which limits the use of gas technologies in new constructions, will be extended to collective housing from January 2025.

For Thomas Barquin, Senior Consultant and Head of Research on Decarbonization of Heating: “France appeared set to restrict the installation of boilers in renovation and replacement projects this decade. However, following a consultation last summer, the government ultimately decided not to impose such restrictions. As a result, sales of gas boilers have increased this year. However, the government has confirmed the exclusion of gas condensing boilers from the CEE scheme from 2024, while their eligibility for the reduced VAT rate and the Eco-PTZ is being thoroughly reassessed.”

Illustrative image of the article via Depositphotos.com.