EBC Memo 277: EPBD draft guidance on ‘fossil fuel boilers’ could include hybrid systems – EBC members invited to contact national authorities

 

In the context of the ongoing transposition and implementation of the recast Energy Performance of Buildings Directive (EPBD), the European Commission (DG ENER) is preparing a guidance on ‘fossil fuel boilers’, which are set to be phased out by 2040. Commission guidance documents, even though legally non-binging, are addressed at Member States and aim at offering clarifications and support on how to transpose and implement the elements of the new EPBD in this regard.

 

A leaked draft version of this guidance is available – please see the attached document (in English). According to the European Heating Industry association (EHI), this version could impact hybrid systems in the context of the phase out of ‘fossil fuel boilers’ by 2040 under the EPBD. The draft as currently written could lead Member States to also ban hybrid systems as a side effect, because the guidance refers to ‘fossil fuel boilers’ rather than ‘standalone fossil fuel boilers’.

 

Indeed, the current form is not targeting explicitly “stand-alone boilers.” It reads as if it refers to all boilers, including the boiler part of a hybrid system and could therefore lead to a similar misinterpretation at Member States level. In our understanding, the spirit of the text of the recast EPBD leaves room for hybrids systems. It is therefore crucial that the guidance is clear in excluding explicitly hybrid heating system from the scope of this guidance.

 

Context and previous guidance on phasing out of financial incentives

In October 2024, the European Commission had already released its EPBD guidance on phasing out financial incentives for stand-alone boilers powered by fossil fuels  by January 2025 (available here in all EU languages). This guidance is stating that “Based on the underlying rationale of Article 17(15) that the use of fossil fuels in boilers should not be incentivised, financial incentives should only be granted for hybrid heating systems with a considerable share of renewable energy, and only proportionately to the extent that renewables are used in the hybrid heating system. As a result, the installation of a heating system that is 100 % based on renewable energy should be incentivised more strongly than the installation of a hybrid heating system”. It thus introduces a principle of proportionality of incentives to hybrids, which was not present in the EPBD final text, and it is now being used by some Member States to reduce or eliminate the incentives for hybrids.

 

Indicatively:

• In France, since 2025, incentives can only be granted to hybrids relying on the heat pump for at least 70% of the year in total. In some colder areas, this threshold is too strict, so hybrids cannot get incentives anymore and benefit from a reduced VAT rate of 5.5%. According to EHI, the French government might cancel all incentives for hybrids, with as a direct consequence that people installing a hybrid device are encouraged to declare only the heat pump installation to ensure they can benefit from VAT reduced rate and the incentive.
• In Italy, the government is reportedly working on a decree “decreto bollette” that would exclude hybrid factory-made from getting incentives if they are not using at least 50% renewable fuels. According to EHI, the ministry always refers to the EU guidelines and closes any type of discussion even though it recognizes the potential for a different approach.
• It seems that there are similar discussions in The Netherlands to reduce support to hybrids at the moment, but nothing concrete so far and it is not clear yet that this is due to the guidance.
• In Czechia, a grant programme starting from January 2025 has changed, eliminating hybrid heat pumps from the scope of technologies that could receive incentives. In the previous version of this programme, hybrids were included as heat pumps.

 

From exchanges of heating stakeholders with the Commission, it seems that the Commission has no intention to reopen the already published guidance on phase out of incentives by 2025. However, the Commission has agreed to meet with the national ministries to clarify the already published guidance.

 

Next steps – Guidance on ‘fossil fuel boilers’

Regarding the ongoing work towards a guidance on ‘fossil fuel boilers’, set  to be phased out by 2040, the Commission mentioned that it will not refer to hybrid systems. However, it will also not specify that it is about “stand-alone boilers,” leading thus to lack of clarity. The final version of this guidance is expected to be published by the Commission by June 2025.

 

Considering growing concerns regarding the possible inclusion of hybrid heating systems in the phasing out of fossil fuel boilers, we invite you to contact your respective national authorities to clarify the state of play. As the Commission is expected to consult member states on the guidance documents under development, national ministries are thus key actors to ask for clarification and a clear exclusion of hybrids from the 2040-target phase out.

 

The Secretariat will continue to follow developments closely and stay in touch with relevant stakeholders working on the matter.