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Understanding the regulatory uncertainty in Europe’s HVACR market
The EU’s regulatory landscape is undergoing a number of changes, creating challenges for the HVAC sector due to uncertain timelines and potentially varying rates of local and regional market adoption. Experts discuss how these changes impact efforts to implement efficient solutions across the built environment and affect manufacturers producing them.
Standards
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The HVAC market in the European Union (EU) is experiencing significant transformation, profoundly influencing efforts to implement efficient solutions that ensure optimal indoor air quality (IAQ) throughout the built environment.
Commenting on this is Claus Händel, Senior Technical Consultants at the German Association for Buildings and Indoor Environment (FGK), who discusses that two main drivers influencing the European market are the recently revised Energy Performance of Buildings Directive (EPBD) and the expansion of Ecodesign requirements towards sustainability.
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The unfolding story of EPBD and Ecodesign
The EPBD sets minimum energy efficiency requirements for building construction and renovation projects. For the first time, it also includes IAQ requirements, explains Dominik Flikweert, Head of Public Affairs EMEA, Systemair Group.
“Being a ‘Directive,’ the EPBD now must be implemented into the national legislation of EU Member States by 29 May 2026. Given the short deadlines of the first requirements already being in 2028, the EPBD’s effects are already noticeable on the market with a higher demand for efficient and sustainable building appliances.”
Händel highlights that the impact of the EPBD could have been larger if not for the interference from Member States. “The European Parliament initially proposed IAQ requirements that would apply throughout the EU, but the Member States believe it is up to them to deal with it.
In the end, the EU’s competence is setting energy efficiency and sustainability requirements for buildings. At the same time, Member States specify for themselves the additional requirements that should be set in national legislation.
While the EPBD sets benchmarks for buildings, direct product requirements can be found in Europe’s Ecodesign regulations. “While HVAC has been subject to Ecodesign rules since the early 2000s, it is taking too long to review and update these measures,” says Händel. “If we look at fans, for example, the finalisation of the updated requirements has been pending nearly 10 years.” Ecodesign and Energy Labelling measures for ventilation units have faced the same issue, he says, noting that review of these legislations was halted due to resource constraints within the EU and has just restarted.
Händel notes that it is becoming urgent to finalise the revision of the Ecodesign and Energy Labelling rules for ventilation by 2026. “Otherwise, it will have to follow the new Ecodesign for Sustainable Products Regulation (ESPR), which requires additional information in relation to material efficiency, so there is really a pressure to finalise.”
Time constraints within Ecodesign
When it comes to Ecodesign, the rules apply directly and equally across the EU. This framework has been pushing for significant developments for over a decade towards more sustainable products, such as advances in fans and ventilation units with heat recovery. We have seen continuous progress in these fields, making it promising for the sector. “Overall, the EU single market principle has worked effectively in the context of Ecodesign, says Händel. “However, as we reach a point where additional requirements may emerge, we must be cautious about overloading the process with excessive bureaucracy.”
Flikweert warns that delayed revisions to Ecodesign regulations could have noticeable repercussions , undermining the original intent. "Many manufacturers invest early to comply with stricter upcoming legislation, but the old rules remain in effect," he says. "As a result, outdated, inefficient appliances stay on the market, and Europe misses opportunities to swiftly promote adopting more sustainable solutions, benefiting both citizens and the manufacturing sector."
The challenge of Member States’ adoption of EPBD
When it comes to EPBD, the influence is largely indirect and slightly more complicated. “While the EPBD provides a solid framework, implementation often aligns with the Member States’ own strategies and regulations,” says Händel. “In some cases, the EPBD is adopted with minimal changes, but in larger Member States like France and Germany, local and regional governments often have their own interpretations and approaches, which can be an issue.”
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This tendency is especially concerning with the new mandatory lifecycle assessment (LCA) requirement for building projects, says Flikweert. “Such LCAs, underpinned by Environmental Product Declarations (EPD), already exist in voluntary form and have been mandatory in limited cases (e.g., Belgium). They are valuable tools in helping to select the most sustainable product for a building project, and proper EPDs are time-consuming and costly. Given their importance and the effort that goes into creating accurate, verifiable EPDs, it is of utmost importance that these frameworks are created and implemented harmoniously throughout the EU. Unfortunately, Member States insist on maintaining the right to establish their own local EPD schemes, which would to increasing costs for customers and end-users and an administrative burden on the industry.”
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Understanding the market fragmentation within the EU’s HVAC sector
Händel also highlights how, in the context of Europe’s single market, challenges emerge with the Construction Product Regulation and the EPBD as the issue of fragmentation extends to within EU Member States. “Even within these countries, requirements are not always centralised,” he says. “For instance, regions across Germany and Belgium have their own implementations of construction rules, whereas France and the Netherlands adopt a more centralised approach. But even member states with centralised implementation might create a fragmented market, complicating efforts at harmonisation on the EU level."
Flikweert notes that such market fragmentation limits the growth potential of European companies, as they need to adapt products and documentation for each Member State or even region.
While such local specifications may seem attractive as a tool for certain policymakers to shield their local manufacturers from competition, it will only lead to higher prices for customers and end-users, lower innovation levels, and increased difficulties for European companies to scale up and be able to face global competition.
To address this, Händel advocates that the EPBD should follow the same implementing frameworks as the Ecodesign Directive or the Machinery Directive, which ensure that products meet CE marking standards that can be used universally across the EU. Basing building project requirements on similar frameworks will shape the certainty and clarity that customers, investors, and manufacturers of construction materials and appliances desperately need.
(This is the first instalment in a two-part series on the EU market’s fragmentation. Read our extensive article exploring protectionism and open market debate here: Navigating trade barriers for HVAC: The EU’s self-imposed protectionism challenge)