The Middle East war has led to a surge in Europe's heat pump heating demand; China's heat pump export model needs to change

Against the backdrop of the Middle East war driving up energy prices, China’s heat pump export prospects to the European market look promising this year. At the same time, the European Union is about to release an “Industrial Accelerator” bill, and the China-to-Europe heat pump export model is also facing a shift.

On April 3, Wang Sucheng, a senior analyst at industrial research firm Industry Online, told Yicai that from January to February 2026, China’s heat pump export value increased by more than 50% year-on-year. Of that, February’s export value rose 81.8% to 930 million yuan, with the main destinations being European markets. The Middle East war has driven a frenzy in oil and natural gas prices over nearly a month, which will further boost growth in Europe’s demand for heat pumps.

According to Industry Online data, over the past five years (2021 to 2025), the global sales of air-source heat pumps achieved a compound annual growth rate of 7.6%. In 2025, global sales reached 4.46 million units, up 5% year-on-year. In Europe, sales of air-source heat pumps in 2025 reached 1.502 million units, up 29% year-on-year. In 2025, China exported 803,000 air-source heat pump units to Europe, up 32% year-on-year.

After this year’s outbreak of the Middle East conflict, Europe has faced tight energy supply. The UK has recently issued new rules requiring that newly built residential buildings in England must install heat pumps and solar panels. “High oil and gas prices are pushing a transition in energy and heating methods. In the future, the growth space for Europe’s district heating market is huge, and the replacement of traditional energy-based heating with heat pumps is expected to accelerate,” Wang Sucheng said.

In addition to demand for heat-pump heating in Europe’s newly built homes, the future upgrading of Europe’s existing stock market of 140 million to 150 million wall-mounted boilers will also increasingly choose heat pumps. Wang Sucheng expects that Europe’s heat pump market growth in 2026 will reach double digits.

At present, China is the world’s largest producer and consumer of heat pumps. In 2025, China’s heat pump output reached 3.579 million units, down 6.5% year-on-year. Wang Sucheng expects that while pressure on growth in China’s domestic heat pump market will remain this year, with a surge in demand from overseas markets such as Europe, the growth rate of China’s heat pump output in 2026 is likely to turn positive again.

Chinese companies are also actively expanding into Europe’s heat pump market. Last month, at the heating and air conditioning exhibition held in Milan, Italy, Haier launched a “heat pump and hot water integrated solution,” and Gree also rolled out an all-purpose heat pump supporting modes such as cooling, heating, and hot water. Previously in Europe, Midea acquired HVAC companies such as Clivet, and its annual heat pump production capacity in Italy is 300,000 units.

Xiao Youyuan, chairman of Sanyou Technology, told Yicai that production of some factories making heating boilers in Europe has been stalled. As Europe’s heating market is shifting toward more energy-efficient heat pumps, this is an opportunity for Chinese companies. However, there are also risks and uncertainties: with the European “Industrial Accelerator” bill coming out, more support will be given to local brands, which will have some impact on imported products.

Xiao Youyuan believes that if Chinese companies in the future expand the European market purely through export channels, they will be affected. It is expected that some European boiler companies will roll out certain heat pump projects, but Chinese companies still need to strengthen local brands and channels. Sanyou plans to set up a joint venture with European companies for heat pump R&D and supply cooperation, and will also acquire some local distribution channels.

(This article is from Yicai)