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Navigating trade barriers for HVAC: The EU’s self-imposed protectionism challenge
While the EU intends to be a single market of 450 million people, its Member States sometimes enact their own laws to protect domestic producers. This fragmentation disadvantages companies within the EU and globally. Experts discuss the complexities and what they mean for the HVAC sector.
Standards
Today’s European HVAC market is significantly influenced by the Energy Performance of Buildings Directive (EPBD) and the Ecodesign Directive (see our comprehensive article here). However, challenges in enforcing and adopting these critical regulations across Member States reveal that while the EU's single market seeks harmonisation, fragmented building requirements—driven by national and regional priorities—often hinder cohesive implementation and progress.
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Speaking on the issue is Claus Händel, Senior Technical Consultant at the German Association for Buildings and Indoor Environment (FGK), explaining that buildings can have different legal requirements depending on where you are within the EU, often allowing for national or regional specialisations. “Everyone has an eye on the local traditional side,” he says. “Typically, for ventilation, there is always a consideration of national specialities — whether steered from the construction side, machine perspective, or Ecodesign. We have the European single market, and now it’s a battle between whether HVAC products be considered construction products or machines.”
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How to categorise HVAC technologies is a challenge that has been ongoing for a while now, says Dominik Flikweert, Head of Public Affairs EMEA, Systemair Group. “Most HVAC products fall within the scope of Ecodesign, and the EU’s Construction Products Regulation can only complement that where safety is not sufficiently covered. At the same time, machines, such as ventilation units, are an essential appliance in buildings, and the EPBD stipulates efficiency and performance requirements that HVAC needs to fulfil.”
This is a very high-level issue, adds Händel. “If we follow sustainability targets and consider lifecycle assessment (LCA), the legislative tracks for construction and machines differ significantly. The question then becomes: how should products be declared? Should we declare HVAC products as construction appliances or as machines?” This burdens manufacturers, as they might be required to navigate and comply with both tracks, adding layers of bureaucracy.
What we need is to steer in one unified direction that sufficiently addresses the requirements of both. This is also an area where Member States can strategically play their cards.
For manufacturers with a presence in multiple different Member States, this scenario would be a challenge— and we are already experiencing this to some extent, says Händel. “If we proceed with Environmental Product Declarations (EPDs) as they currently stand, for example, each Member State has the possibility to adopt its own programme with separate certifications for each. This is because EPDs are tied to the construction sector and are influenced by national requirements. If we had a clear, unified declaration for a common product standard across the EU, it would greatly simplify the process for customers, end-users, and manufacturers alike. With one certification valid throughout the EU, the burden of navigating multiple programmes and certifications would be eliminated.”
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Who is driving protectionism and why?
According to Händel, there is currently a trend where some Member States assert their influence more strongly, not just as a form of protectionism but also as a way to showcase their independence and preserve their own traditions in the construction sector. “There is a concern that more will follow this example. We already see it in Member States like Poland, Germany, and France, where they have the inclination to protect their own methods and claim superiority through their unique approaches. This creates challenges for the industry as a whole.”
This trend is particularly concerning for European manufacturers, says Händel, as it makes navigating the market increasingly complex. “Some organisations argue that having local specialities is a strength of the industry, claiming that ‘manufacturers accustomed to local customs might have an advantage.’ ” However,” Händel Says, “the European market fragmentation creates significantly larger challenges for European companies, especially for smaller companies, as they do not always have the means to scale up both within Europe and internationally. It is therefore indispensable to pursue a level playing field inside the EU, and that forward-thinking and strict requirements ensure market growth.”
Flikweert says, “In my opinion, Europe has yet to fully unlock the potential of its single market. The principles of a European single market have been applied unevenly. While some progress has been made with goods, labour, and capital, we are still far from achieving a genuinely integrated single market in which companies can compete with each other on a level playing field.
Realising this vision by establishing a true European Single Market could unleash immense market forces to drive the economic growth Europe urgently needs right now to jumpstart its economy.”
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In a way, it is also normal that everyone wants to ensure that the legislative framework is beneficial for them, and this can lead to conflicting opinions within the same organisation, says Händel. “It happens that a company tries to protect its own domestic market (e.g., in Germany or France) while advocating for open markets in the rest of Europe. If you speak with an export manager, they will likely push for market openness. On the other hand, those responsible for local operations often favour a degree of protectionism.” This highlights that even within the same company, there is often no clear consensus on this issue.
Flikweert says this issue has been highlight in the context of Environmental Product Declarations (EPDs) . “Certain Member States intentionally adopt EPD rules that are serving their own companies, fostering sales of their, often outdated, solutions. This means that European companies are not only faced with a plethora of EPDs, depending on the Member State or region, but also with discriminatory rules.”
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The case for a unified approach
As a representative of an association, Händel says he believes in the opportunities an open market offers, “Otherwise, protectionism in the form of national regulations that demand specialised products can block innovation, ultimately leading to failure.” For us, this is a call to all companies, he notes. “We need to unite to follow a clear path to implement indoor environmental quality parameters—not just in the EU but also in individual Member States and globally. The latter is an additional element highlighting the importance of strengthening the single market, as it enables us to drive the discourse and standard-setting worldwide. This also means that others will determine economic and product standards for us if we, as Europeans, cannot establish a joint perspective
Händel adds that it is also critical to develop this unified European view quickly, and the industry must support this effort. “Right now, we lack alignment among Member States, which weakens our position, “ he says. “At the EU level, we must convince Member States that what we are fighting for is the strength of European manufacturing. Ventilation, for instance, is a European-led technology — advanced, efficient, and of high quality. This is an issue that Europeans need to solve, as solidifying our position will also strengthen us globally.”