Exploding Demand for European China-Made Heat Pumps

Russia's Natural Gas Threat Sparks Widespread Love Calls for Heating Products like Heat Pumps
EU Heat Pump Market Expected to Grow Rapidly Due to Climate Change Issues in China

[Asia Economy Senior Reporter Cho Young-shin] As Europe faces the worst energy crisis in history this winter, demand for Chinese-made heat pumps is surging. Chinese media report that although heat pump demand has temporarily spiked due to the Russia-Ukraine war, demand in Europe is expected to continue growing steadily in the future due to climate change issues such as carbon neutrality.

Photo by Huanqiu Shibao Capture

According to Chinese media including the state-run Global Times on the 14th, China's largest home appliance company Midea Group is building a heat pump manufacturing plant in Italy. Midea Group is investing 60 million euros (approximately 84 billion KRW) to construct a heat pump production line and a research and development (R&D) center. This plant is scheduled to start producing heat pumps from the second quarter of 2024 and supply them across Europe.

A heat pump is a device that compresses refrigerant at high temperature and high pressure in a compressor, vaporizes it, then sends it to a condenser to release heat from a higher temperature side to a lower temperature side. Composed of a compressor, evaporator, condenser, and expansion valve, heat pumps are typically used for both heating and cooling.

The Global Times explained that Midea Group is building a heat pump production line locally in Europe because demand for the product is surging. The media added that heat pump exports increased by a remarkable 200% year-on-year through August this year.

China's Xinda Securities estimates that the European heat pump market will grow at an average annual rate of over 10% for the next five years. Xinda Securities analyzed that following the recent increase in heat pump demand due to Russia's natural gas supply threats, demand in Europe will continue to grow steadily due to climate change issues such as carbon neutrality.

In fact, the European Heat Pump Association (EHPA) forecasts that the European Union (EU) heat pump market size will double from an estimated 2 million units in 2021 to over 4 million units by 2026. It also predicts that EU heat pump demand will exceed 14 million units by 2031. Last year, the country with the highest heat pump demand was France, with 537,000 units sold. Following were Italy (382,000 units) and Germany (177,000 units), with these three countries accounting for half of Europe's total demand.

The International Energy Agency (IEA) also estimates that heat pump demand in Europe will increase. The residential heat pump usage rate, which was only 4% in 2015, is expected to rise to 12% by 2030 and exceed 34% by 2050.

Chinese media report that Chinese companies Gree Electric, Haier Smart Home, and Midea Group have competitive heat pump brands, and mid-sized heat pump manufacturers such as Funni and Lichu Dongfang also have strong product capabilities.

The Global Times cited statistics from the China Chamber of Commerce for Import and Export of Machinery and Electronic Products (CCCME), reporting that heating product exports from China to Europe increased by 14.4% year-on-year from January to August. Especially after August, when Russia's threat to cut natural gas supplies became a reality, demand for Chinese-made heating products in Europe surged.

This content was produced with the assistance of AI translation services.