European HVAC market holds up better than expected in the energy and cost of living crisis

Credits BSRIA

Last December, BSRIA published its In-depth European Air Conditioning reports covering the residential and commercial markets in France, Germany, Italy, Spain, and the UK.

Hugh Brenchley, Project Manager at BSRIA WMI reports “The European AC market has held up better than expected considering the energy and cost of living crisis in the region. That, and the heatwaves of last summer, have inevitably affected the different product segments and verticals in varying ways”. 

The energy price shock of 2022 and the further sharp rise in prices due to inflation helped increase overall market values but volumes also increased as supply chains recovered post Covid. The reports highlight country and product variations as European economies recovered at different rates. 

The renovation sector comes across strongly as new builds stumble. Detailed vertical analysis shows how the office sector is faring against a workforce working partly from home and how the retail sector is performing as more consumers purchase online. Other drivers affecting the performance of the AC market include the heatwaves experienced across Europe in the summer 2023. 

Legislation affecting the industry is explored at both country and European level. In France, for example, the end of the white certificate scheme (CEE), introduced in 2021, was scaled down with reduced objectives in 2023 with a consequential impact on the chiller market. In Europe, as the F-Gas regulations come into effect, the reports explore which refrigerants are expected to gain share in the coming years. The last European trialogue meeting on the revision of the F-gas regulation between the European Parliament, Council, and the Commission, on the 5th October 2023, ended in an agreement, the details of which are contained in the report. 

Several players have expressed concern over the practicality of implementing the changes. In some countries, air-conditioning players are reported to be in conversations with governments to negotiate and finalise new incentive schemes, with a view to helping their country achieve its ambitious decarbonisation targets, as well as re-boosting the AC market.