Energy should provide comfort and security – not uncertainty. Yet today, too much of Europe’s heating and cooling still depends on imported fossil fuels, exposing households and businesses to volatile prices and geopolitical risks. Europe already has the clean heat resources and technologies to change this; now we must connect them through smarter, integrated heating and energy systems.
By Dan Jørgensen, European Commissioner for Energy and Housing
Published in Hot Cool, edition no. 5/2026 | ISSN 0904 9681 |
There is no denying the scale of the challenge. Heating and cooling account for around half of the European Union’s energy demand and more than a quarter of its greenhouse gas emissions. For European households, the challenge is even more pronounced: in 2023, space and water heating represented almost 78% of the final energy consumption, with most of this demand still being met by fossil fuels.
The reality is clear, but so is our response: we need cleaner heating and cooling in Europe. This is about much more than cutting emissions. It is about making energy more affordable for citizens, cities, and companies. It is about strengthening Europe’s energy security and boosting our competitiveness by making better use of local energy resources.
Delivering the clean transition of the heating and cooling sector is one of Europe’s biggest energy opportunities and a key priority for the Commission. This is where district heating and cooling come in.
District heating: Connecting Europe’s energy system
District heating and cooling can become a cornerstone of Europe’s clean energy transition. Unlike individual heating and cooling technology, a district heating and cooling network connects homes and businesses with different parts of the energy system. It enables the integration of clean heat sources and the recovery of waste heat. It also supports electrification, for example, by providing valuable flexibility to electricity networks.
Today, around 19,000 district heating systems operate across the European Union. Together they serve around 80 million citizens through almost 200,000 km of networks and already provide around 13% of the EU’s heating supply.
But this is only the tip of the iceberg – because the next generation of district heating systems can do much more. They can integrate large-scale heat pumps, geothermal energy, renewable heat, and sustainable biomass. They can also utilise recovered industrial heat and waste heat from data centers. At the same time, they can interact dynamically with the electricity system by absorbing surplus renewable electricity, reducing curtailment, and providing flexibility during periods of peak demand.
This integrated approach benefits the entire energy system. Sweden already demonstrates what is possible. There, modern district heating provides flexibility equivalent to around 10 GW of peak electricity capacity. This illustrates why heat and electricity should increasingly be considered complementary energy carriers, as well as interconnected elements of local energy systems. Better integration between electricity and heating systems can reduce the need for costly grid investments while improving the resilience and efficiency of Europe’s energy infrastructure.
Turning wasted heat into a valuable energy resource
Europe is rich in clean heat resources. The challenge is not their availability; it is rather connecting them to where they are needed.
One of the greatest opportunities is waste heat. Every day, factories, wastewater treatment plants, supermarkets and data centers release enormous amounts of usable heat into the atmosphere. Available estimates suggest that waste heat corresponds to almost 30% of total EU energy use, equivalent to nearly half of all fossil fuel consumption.
Not all of this energy can be recovered in practice, but the potential remains substantial. Waste heat from industrial processes, commercial buildings and data centers could provide a stable and local source of energy for homes, businesses, and public buildings connected to heat networks. With the Energy Efficiency Roadmap, the Commission calls for waste heat recovery to cover at least 11% of EU heat demand.
This potential will not disappear as our economy electrifies. On the contrary, the growth of data centers and the increasing demand for cooling will create new sources of recoverable heat. The question is how we can connect these sources with nearby demand in an economically viable and technically efficient way.
Geothermal energy represents another major opportunity. It provides reliable, locally produced heat around the clock and can complement electrification and other renewable energy sources. Yet Europe still exploits only a small share of its geothermal potential. Better geological data, targeted technical assistance, risk-sharing mechanisms and improved access to finance can unlock much greater deployment across the Union.
From potential to deployment
The technologies that we need already exist. And in many cases, they are made in Europe. The EU is home to world-leading companies producing the technologies that make district heating and cooling systems possible, from heat pumps to smart network solutions. Therefore, by rolling out these systems, we are not only investing in cleaner energy, but also in European innovation, manufacturing, competitiveness, and jobs.
The challenge now is deployment. Electricity and heating systems are still too often planned separately, even though they increasingly depend on each other. Too many projects are delayed by lengthy permitting procedures and financing constraints, as well as fragmented planning and insufficient coordination between local authorities, network operators, industry and investors.
Removing these barriers is now one of Europe’s most important tasks. That is why the Commission will present a European Heating and Cooling Strategy, developed in close coordination with the Electrification Action Plan.
Together, these initiatives will accelerate the deployment of clean district heating and cooling, strengthen the integration of electricity and heating systems, unlock the potential of waste heat and geothermal energy, and improve access to financing for strategic investments. They will also encourage stronger cooperation between cities, utilities, industries, and data centers, ensuring that local energy resources are used where they create the greatest value.
Europe already has the technologies. Europe has the industrial capacity. Europe has the clean heat resources.
Now we must connect them. By doing so, we can lower energy bills, strengthen our energy security, support the European industry, and build a heating system that is cleaner, smarter, and truly made for Europe’s future.