Agora Energiewende proposes a levy on fossil fuel boilers to accelerate decarbonization, support EU industry, and meet climate goals. The EU incentive system would introduce a charge on gas boilers and reinvest the revenue into companies developing low-carbon heating solutions.
Europe needs stronger incentives for clean heating
Without new incentives, decarbonizing building heating in Europe will remain a distant goal—for decades. Sales data for alternatives like heat pumps confirm this trend. The lack of action doesn’t just harm the climate; it also weakens the EU’s industrial competitiveness, preventing it from capturing key market shares in clean tech sectors.
“At the current transition pace, the EU risks losing significant growth potential in clean heating appliance sales,” warns Emeline Spire from Agora Energiewende, a German think tank that analyzed the future of low-carbon heating in Europe. “This policy cycle is crucial for developing innovative approaches that can reignite the transition and strengthen Europe’s competitive edge in clean technologies.”
also read Draghi, EU Competitiveness Report: The Decarbonization Chapter
50 million new gas boilers in 15 years? The risk is real
The transition to clean heating is at a standstill—right when it should be accelerating.
Sales of clean heating appliances have dropped back to 2021 levels after peaking during the energy crisis. If no new incentives are introduced, fossil fuel boilers will continue to dominate the market well into the 2030s. According to Agora Energiewende’s report, more than 50 million new gas boilers could be installed by 2040.
A Charge on Fossil Fuel Boilers: The Proposed Solution
The think tank suggests a bold yet structured approach: the EU Clean Heat Market Instrument. This initiative would introduce financial incentives for manufacturers, including a charge on gas boilers. The revenue generated would be reinvested in companies expanding their share of low-carbon heating solutions.
The mechanism closely mirrors the EU Emissions Trading System (ETS). The proposal also includes a gradual increase in the charge rate to ensure long-term effectiveness.
This policy would complement the Emissions Trading System for heating (ETS2), set to launch in 2027. According to the report, this strategy would make clean heating technologies more accessible while stabilizing carbon pricing. The expected outcome? A smoother transition, greater investment security, and a competitive boost for the EU clean tech sector.
