Report: Energy taxation in heating

Heat pump technologies are best in class with regards to energy efficiency, renewable energy, air quality and CO2 emission reduction.

Despite the significant energy savings, heat pump operating costs can still be higher compared to fossil energy – based solutions. This is the result of an imbalance in taxation levels and levies often favouring fossil energy and giving a disadvantage to electricity- based solutions.

Distorted energy prices are misleading consumers because the least sustainable heating technologies are perceived cheaper. The true cost of burning fossil energy is however not disappearing, it is instead, covered by society at large.

In this report, EHPA argues that in the “fit for 55 package”, the EU should ensure that customers are guided towards the cleanest, greenest and most sustainable solution by making it the economically most attractive heat decarbonisation option. The package should establish a CO2 price signal for heating and cooling including by reviewing taxation levels of all energy carriers, the introduction of a CO2 price and the phase out of fossil fuel subsidies.