The heat transition – i.e., the switch to renewable energies and climate-neutral technologies for heat supply – is a key component of the global energy transition. It affects not only the building sector, but also industrial processes, district heating, and cooling requirements. While some countries have already made considerable progress, others are still in the early stages.

Pioneers of the heating transition: Scandinavian countries

Sweden – almost completely decarbonized heat supply

Sweden is considered a prime example of a successful heat transition. As early as the 1990s, the country opted for high CO₂ taxes and the targeted expansion of district heating networks. Today, more than 90% of district heating is generated in a climate-friendly way, often using biomass, waste heat, and increasingly large heat pumps. Fossil fuels now play virtually no role.

Denmark – municipal planning as the key

Denmark has advanced the heat transition primarily through consistent municipal control. Each municipality draws up so-called “heat plans” that coordinate the expansion of heating networks or the promotion of heat pumps. Oil and gas heating systems have been heavily regulated since the 1980s. District heating also dominates here, fed by combined heat and power, waste heat, and biomass.

Finland – progress through a combination of district heating and heat pumps

Like its neighbors, Finland relies heavily on district heating, which is increasingly being supplied by heat pumps and renewable sources. A special feature is the use of large heat pumps that feed waste heat from industrial plants and data centers into the heating network. The goal is to completely replace fossil fuels by 2035 at the latest.

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Countries with moderate progress: France and the Netherlands

France – a mix of bans and subsidies

France has banned new oil and gas heating systems in new buildings since 2023 and is focusing on subsidy programs for heat pumps. What makes France unique is the high importance of electricity generation from nuclear energy, which facilitates the electrification of heat supply. Nevertheless, the expansion of heat pumps and heating networks still lags behind other European countries.

Netherlands – Heat pumps mandatory from 2026

The Netherlands plans to make the installation of heat pumps in new buildings mandatory from 2026. In addition, gas connections in new development areas have not been approved since 2018. Local authorities receive government support to convert neighborhoods to alternative heat supplies, such as local heating or geothermal energy. The aim is to significantly reduce the country's heavy dependence on natural gas (historically due to its own gas fields in Groningen).

Germany – Need to catch up and debate over the way forward

Germany is clearly at the beginning of the heating transition in comparison. Although there are ambitious targets, such as the mandatory 65% share of renewable energies in new heating systems, implementation is meeting with resistance. Subsidy programs for heat pumps and the planned expansion of district heating are important building blocks, but are being slowed down by high construction costs, a shortage of skilled workers, and acceptance problems.

A look at neighboring countries shows that Germany has so far mainly set the regulatory course, but now needs to invest heavily in practical implementation in order to avoid falling further behind.

United Kingdom – Phasing out gas heating systems

The United Kingdom has decided to ban the installation of new gas and oil heating systems from 2035. At the same time, programs are underway to promote heat pumps. Nevertheless, the high proportion of gas-based central heating systems in existing buildings remains a major challenge. Pilot projects on hydrogen as an alternative heating source have not yet demonstrated broad practical applicability, so the focus is clearly on heat pumps.

Austria, Belgium, and other EU countries – early bans

Austria: Oil and gas heating systems have been banned in new buildings since 2023. Existing systems are to be gradually replaced.

Belgium (Flanders): From 2025, new buildings may no longer be equipped with oil or gas heating systems.

Italy and Spain: These countries are focusing more on solar thermal energy and hybrid systems, but their strategies are less uniform than those of Northern Europe.

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USA – Market-driven heat transition

The heat transition has recently gained considerable momentum in the USA: heat pumps surpassed gas heating systems in sales figures for the first time in 2022, and over 18 million households are now equipped with them. Subsidies from the Inflation Reduction Act (IRA) (up to USD 8,000) are further driving the market. The U.S. Climate Alliance's goal is to have 20 million heat pumps by 2030. Studies show CO₂ savings of up to 64% in the building sector, but bottlenecks in skilled labor, high electricity prices, and social inequalities are slowing down expansion. Overall, electrification with heat pumps and supplementary green hydrogen is considered a key lever for decarbonizing heat supply.

The Trump administration's plans for the heat transition in the US are still unclear. A halt or rollback of financial incentives – for example, via the IRA – could weaken the market for heat pumps. Combined with favorable regulatory deregulation momentum, this could significantly slow down the ongoing transition to electric heat supply. However, it remains to be seen to what extent Congress, states, and private actors will be able to stabilize projects already developed as part of the heat transition.

China – dynamic expansion of heat pumps

China is accelerating the heat transition through targeted efficiency targets, massive production, and technological innovation. Heat pumps are set to increasingly replace fossil fuel heating systems – particularly in areas such as industry and district heating, which have been heavily coal-based to date. Thanks to clear policy instruments and extensive government commitment, China is well on its way to significantly advancing the decarbonization of the heating sector.

China plays a central role in the global heating transition market – both in the production and use of heat pumps. According to the IEA and Wikipedia, China is the world's second-largest market for space heating and hot water heat pumps, recording sales growth of 12% in 2023, while the global trend was -3%. Heat pumps accounted for about 8% of all heating appliance sales in 2022; in decentralized buildings, China accounts for a quarter of the global installed capacity – over 250 GW, which covers about 4% of the heating demand in the building sector.

As part of the national action plan of April 2025, government agencies are pushing for the upscaling of heat pump technology by mandating minimum efficiency increases of 20% for key products and promoting technological advances (such as high-performance high-temperature heat pumps or environmentally friendly refrigerants). In addition, heat pumps are to be used more extensively in public buildings, industry, agriculture, and transportation.

Large-scale heat pumps (e.g., for coupling with district heating) are already in use in cities in northern China to reduce the high coal dependency of over 80% in existing heating networks while utilizing industrial waste heat.

Under the IEA's Announced Pledges Scenario (APS), direct coal combustion for space and water heating could be reduced by 75% by 2030 and almost completely eliminated by 2040. Heat pumps would play a key role in the decarbonized heat supply of urban and rural areas by 2050.

China is also proving to be a pioneer in electrification: around 30% of final energy consumption already comes from electricity – more than in the EU or the US (~22%). Electrical engineering such as heat pumps, e-mobility, and clean power generation from solar and wind energy are driving this growth.

European Union – Framework and Strategy

The EU supports national strategies with energy efficiency directives and the European Green Deal. As part of the National Energy and Climate Plans (NECP), all member states had to outline how they intend to decarbonize heating and cooling systems. However, an analysis from 2024 reveals major differences: while some countries have presented concrete measures and timetables, others remain vague or unambitious.

Success factors in international comparison

Based on the experiences of various countries, the following factors can be identified as key to a successful heat transition:

1. Clear regulation: Restrictions and bans on fossil fuel heating systems create binding commitments.
2. Price signals: CO₂ pricing and subsidy programs make renewable heat attractive.
3. Municipal responsibility: Local heating networks and neighborhood solutions are crucial.
4. Technological focus: Heat pumps and large-scale heating networks are central pillars.
5. Social cushioning: Subsidies for low-income households ensure acceptance.

The heat transition: a global puzzle with clear role models

The heat transition is progressing at different speeds around the world. Scandinavian countries are demonstrating how consistent tax policies, municipal planning, and technological progress can lead to almost complete decarbonization. Other countries, including Germany, France, and the Netherlands, are not at the beginning of the process, but they need to increase the pressure to implement change.

Outside Europe, the US and China are focusing on dynamic market promotion, which could make heat pumps the global standard. The decisive factor everywhere remains that the heat transition can only succeed with a combination of political will, technological progress, and public acceptance.

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