Fortum’s feedback on the EU’s Heating and Cooling strategy

The EU Commission is preparing the Heating and Cooling (H&C) strategy with the aim to publish it by the end of March 2026. Heating and cooling account for 50% of EU’s energy use, with 70% coming from fossil fuels. The H&C strategy aims to decarbonise, increase energy efficiency, enhance energy security, and integrate heating and cooling with low-carbon electricity systems.

Fortum operates DHC in Finland and Poland. H&C Nordics’ Espoo Clean Heat (2 TWh) targets carbon neutrality by 2029 using heat pumps, electric boilers, thermal storage and biomass. Waste heat from data centers will cover 40% of its production. H&C Poland’s (3,4 TWh) ambition is to decarbonise its heat production and sales by 2027.

Scaling up low carbon DHC infrastructure (networks and production) offers most cost-efficient and fastest pathway to de-carbonise the buildings sector. We think that the H&C strategy should address benefits of electrified and de-carbonised heating and cooling both from DHC system and from electricity system perspective. There are several benefits for the society from electrified DHC: for the environment, energy system integration and efficiency, and technology & innovation.

Fortum’s key recommendations

• Accelerate national implementation of FF55 legislation (RED3, EED, EPBD) to de-carbonise DHC and on-site H&C systems with a view towards 2040;
• Define core regulatory enablers for decarbonisation, electrification and energy system integration and ensure regulatory predictability to support long-term investments and transitions;
• Recognize Member State diversity in regulation, market structures and technological readiness, and establish an EU-level knowledge center to monitor heat market transitions and share best practices;
• Promote electrified and decarbonised DHC as a scalable and efficient solution in urban areas and empower DHC operators with mandates and incentives for planning and deployment;
• Design long-term financing schemes to support CAPEX-heavy decarbonisation projects;
• Boost waste heat reuse and treat it on par with renewable energy and
• Prioritize CAPEX support for industrial decarbonisation.