EU Heating and Cooling Strategy

The European Commission is preparing a new, cross-cutting strategy for heating and cooling (the EU Heating and Cooling Strategy), which will also cover district heating systems. Originally announced for early 2026, the document is now expected during 2026.

Below are the main assumptions of the announced strategy and their significance for the district heating sector.

What the strategy is

The strategy is intended to support the delivery of the EU climate-neutrality goal by 2050 and the implementation of the "Fit for 55" package. By design it is not another major legislative revision but a directional document — organising and accelerating the implementation of directives already in force: on energy efficiency (EED), on the energy performance of buildings (EPBD) and on renewable energy (RED). The strategy is to be linked with the EU Electrification Action Plan, covering among other things the rollout of heat pumps and efficient cooling.

Main assumptions relevant to district heating

The strategy emphasises the decarbonisation of heating and cooling: increasing the share of renewable energy sources (geothermal, solar, sustainable biomass, waste heat), improving energy efficiency and reducing fossil-fuel consumption. The reference point for modernising existing networks and for public support is to be the new definition of an "efficient district heating and cooling system" set out in the EED.

An important element is the development of local heat and cooling planning. The strategy is to promote mandatory local heat plans and assessments of RES and waste-heat potential in larger cities, integrated with national energy and climate plans.

Directions for district heating systems

For district heating systems themselves, the strategy points to modernisation towards low-temperature (4th-generation) networks: reducing transmission losses, integrating heat pumps and flexible coupling with the electricity market. This is accompanied by a change in the fuel mix — moving away from coal and gas towards renewables and waste heat from industry, data centres, wastewater treatment plants or waste-to-energy plants (under tightened emission criteria).

The expansion and modernisation of district heating networks is treated as part of delivering national and local plans — particularly in regions with large, concentrated heat demand.

Implementation and financial instruments

The strategy assumes a fuller inclusion of heating and cooling — including district heating — in national energy and climate plans (NECPs) and other Energy Union governance frameworks, with clear emission-reduction pathways. Dedicated EU-level financial mechanisms are envisaged, supporting network modernisation, heat storage, renewables and vulnerable consumers — including pre-financing models and repayment from savings.

Better use of existing EU programmes — such as LIFE, the cohesion funds or InvestEU — is also expected, by linking them to the criteria for efficient district heating.