- EHPA calls for a clearer, simplified EU State Aid Framework to boost investment in clean tech.
- Recommends consistent structure, clearer timelines, and fairer access—especially for SMEs.
- Urges stronger support for industrial heat pumps, flexibility services, and thermal energy storage.
- Highlights need for Two-Way Carbon Contracts and fairer aid intensity for electrification vs. hydrogen.
- Advocates direct grants for ESCOs/EaaS and manufacturing support aligned with Net-Zero Industry Act.
“EHPA pushes for smarter EU State Aid rules to fast-track clean tech deployment, empower SMEs, and prioritize industrial heat pumps in the race to decarbonize Europe
The European Heat Pump Association (EHPA) has issued a comprehensive position paper in response to the draft State Aid Framework (CISAF) supporting the EU’s Clean Industrial Deal. EHPA welcomes the initiative but emphasizes the urgent need for a simplified, well-structured, and accessible framework to enable a swift green transition, particularly for industrial decarbonization.
Simplification as Strategy:
EHPA insists that simplification is more than just shortening procedures—it means designing a framework that all stakeholders can navigate easily, especially SMEs, which often lack the resources to decode bureaucratic complexities. Clear subsections outlining scope, requirements, aid granting, and disbursement processes are crucial to enhance transparency and reduce delays.
Predictable Timelines to Speed Up Action:
While the Draft acknowledges the importance of quick aid deployment, it lacks concrete deadlines. EHPA proposes indicative timelines (e.g., 6 months) for national authorities to make funding decisions post-approval, ensuring businesses can plan with confidence.
Industrial Heat Pumps and Flexibility Services Deserve Stronger Backing:
EHPA stresses that industrial heat pumps are central to achieving decarbonization, yet the current framework’s 36-month completion deadline is too rigid. These projects often face custom design and grid connection delays, justifying a 48-month flexibility window.
Heat pumps also play a pivotal role in flexibility services, yet current language risks excluding them due to their lack of direct electricity storage. EHPA calls for clear differentiation between storage and demand-response technologies and inclusion of interoperability schemes essential for scaling flexibility.
Contracts for Difference & Financial Fairness:
To support ongoing operational costs and reduce exposure to energy market volatility, EHPA recommends including Carbon Two-Way Contracts for Difference (CCfDs). This would ensure OPEX support and faster project deployment—especially compared to the slower pathways under current State Aid guidelines.
At the same time, EHPA points out a disparity: hydrogen projects receive 50% aid intensity, while electrification via renewable electricity only receives 35%. EHPA calls for equal support, especially for technologies like heat pumps that directly reduce emissions.
Manufacturing Support – Go Beyond Just the Heat Pump:
While EHPA welcomes aid for heat pump production, it emphasizes the need for state support across the supply chain, including for key components like compressors, heat exchangers, and inverters. These should be listed in a dedicated Annex, ensuring full clarity and eligibility under EU funding mechanisms.
ESCOs and EaaS Models: Unlocking Consumer Access:
EHPA proposes direct grants for Energy Service Companies (ESCOs) and Energy as a Service (EaaS) providers—business models that lower consumer barriers by covering upfront costs. These models are essential to mass deployment of heat pumps, but current funding instruments (loans or equity) don’t meet their unique needs.
Capacity Mechanisms Must Complement Flexibility:
The framework must prevent capacity mechanisms from displacing non-fossil flexibility investments. EHPA urges that capacity schemes be temporary and limited, enhancing rather than undermining grid efficiency and decarbonization.
No More Natural Gas Loopholes:
Pointing to the clear climate threat of continued gas reliance, EHPA recommends removing provisions that allow financial support for natural gas-based solutions, even in “justified cases,” unless they meet strict GHG reduction thresholds.