Experts highlight heat pumps as a crucial technology for achieving more sustainable, cost-effective, and secure heating solutions in homes and public buildings. According to the International Energy Agency (IEA), widespread adoption could lead to a reduction of 500 million tonnes in global CO2 emissions by 2030 — a significant contribution given that environmental concerns dominate the top risks outlined in the World Economic Forum’s Global Risks Report 2025.
While these systems are already more economical to operate than traditional gas boilers, with efficiency levels three to four times higher, their high upfront installation costs remain a major obstacle for many households. To meet climate targets, governments may need to offer financial incentives or subsidies to accelerate deployment.
Some skepticism remains about performance in extremely cold weather. However, studies indicate that even under sub-zero conditions, modern units maintain efficiency well above that of fossil fuel-based heating systems. For added reliability in harsh climates, hybrid setups combining a heat pump with a conventional boiler can be used, where the latter only activates during peak demand.
The mechanism behind heat pumps resembles that of refrigerators or air conditioners: they draw ambient heat from the outside air and amplify it for indoor use. Because they transfer rather than generate thermal energy, nearly all captured warmth reaches its intended space, making them highly effective.
In 2024, sales of heat pumps surpassed those of gas boilers by 30%, marking the widest margin on record, according to the IEA’s Global Energy Review 2025. China leads global installations, accounting for 30% of the total, driven by strong domestic manufacturing and national net-zero ambitions. The United States follows, with the European Union also expanding rapidly, particularly in Norway, which reports 632 units per 1,000 households.
Currently, heat pumps satisfy around 10% of worldwide space heating needs. Yet, they could displace over one-sixth of global natural gas consumption used for building heating. Their broader impact depends on how effectively countries implement existing climate commitments. Under current policy projections, demand for these systems is expected to double by 2035.
Trade growth in this sector has lagged behind other clean energy technologies, but future installation rates are projected to rise. Supportive policies, such as those in the US Inflation Reduction Act, are seen as essential for advancing both climate objectives and energy independence. Additionally, upcoming bans on new fossil fuel boilers across parts of Europe are expected to further boost adoption.
Building insulation plays a critical role in maximizing efficiency. Data from Denmark shows that well-insulated homes reduce electricity use by 30% compared to poorly insulated ones. The IEA notes that upgrading a home’s energy rating by two levels — for example, from D to B — can cut energy consumption in half. This not only lowers operating costs but also allows for smaller, less expensive heat pump units.
A recent UK study found that, with supportive measures like lower electricity prices and regulation of gas company profits, heat pumps could reduce household heating bills by approximately 50%.
— news from The World Economic Forum
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Could a heat pump be the answer to heating your home this winter?
This article has been updated. n nHeat pumps are a key way to make heating more sustainable, affordable and secure, say experts. n nThey could reduce global CO2 emissions by 500 million tonnes by 2030 – vital when environmental issues dominate the Forum’s Global Risks Report 2025. n nBut countries will need to subsidize heat pumps if they are to achieve their climate targets, as high installation costs are a barrier for many households. n nHeat pumps could make our homes, workplaces and public buildings more sustainable. n nThe International Energy Agency (IEA) estimates they could reduce CO2 emissions by 500 million tonnes by 2030. With environmental issues featuring in four of the top five risks to the world over the next 10 years, a global switch to heat pumps could be a step in the right direction. n nHeat pumps are already cheaper to run than conventional boilers, and research shows they are three to four times more efficient than traditional gas boilers, but their high initial cost is still a considerable deterrent. Countries will need to subsidize installations if they are to achieve their climate targets, the IEA says. n nSome people are also concerned they lack the efficiency of conventional boilers when the temperature outside is particularly low. However, research suggests that even at temperatures well below freezing heat pump efficiency is still significantly higher than fossil fuel systems. n nDiscover n nWhat’s the World Economic Forum doing about the transition to clean energy? n nMoving to clean energy is key to combating climate change, yet in the past five years, the energy transition has stagnated. n nEnergy consumption and production contribute to two-thirds of global emissions, and 81% of the global energy system is still based on fossil fuels, the same percentage as 30 years ago. Plus, improvements in the energy intensity of the global economy (the amount of energy used per unit of economic activity) are slowing. In 2018 energy intensity improved by 1.2%, the slowest rate since 2010. n nEffective policies, private-sector action and public-private cooperation are needed to create a more inclusive, sustainable, affordable and secure global energy system. n nBenchmarking progress is essential to a successful transition. The World Economic Forum’s Energy Transition Index, which ranks 115 economies on how well they balance energy security and access with environmental sustainability and affordability, shows that the biggest challenge facing energy transition is the lack of readiness among the world’s largest emitters, including US, China, India and Russia. The 10 countries that score the highest in terms of readiness account for only 2.6% of global annual emissions. n nTo future-proof the global energy system, the Forum’s Centre for Energy & Materials is working on initiatives including Clean Power and Electrification, Energy and Industry Transition Intelligence, Industrial Ecosystems Transformation, and Transition Enablers to encourage and enable innovative energy investments, technologies and solutions. n nAdditionally, the Mission Possible Partnership (MPP) is working to assemble public and private partners to further the industry transition to set heavy industry and mobility sectors on the pathway towards net-zero emissions. MPP is an initiative created by the World Economic Forum and the Energy Transitions Commission. n nIs your organisation interested in working with the World Economic Forum? Find out more here. n nSo what is the potential of heat pumps? Here are four charts that show how they work and what they can do to warm our indoor spaces, while helping to stop the climate warming even further. n n1. How do heat pumps work? n nHeat pumps use similar technology to that of a refrigerator or air conditioner. They extract heat from a source – the surrounding air – and amplify this heat. n nHeat pumps are much more efficient than boilers, because they transfer heat rather than generate it. Almost all of this heat reaches the space intended to be warmed. n nThe technology is effective even in cold climates. By extracting latent heat from the outside air, modern heat pumps can operate efficiently at temperatures well below freezing. For added resilience in the coldest conditions, they can be installed as part of a hybrid system, working alongside a conventional gas boiler that provides supplementary heat only when needed. n n2. Which region is installing heat pumps fastest? n nIn 2024, heat pump sales outpaced gas boilers by 30%, the largest gap ever recorded, reports the IEA’s Global Energy Review 2025. n nThe chart above shows that China leads the way in heat pump installations, with the country responsible for 30% of the global total, according to the IEA. The US comes next, followed by the EU – largely led by Norway, which has 632 heat pumps installed for every 1,000 households. n nChina’s dominance is partly due to the fact that it’s a leader in heat pump manufacturing; the country’s net-zero plans are also helping to increase demand. n n3. How much of global heating demand can they cover? n nOver one-sixth of global natural gas demand is for heating buildings – so heat pumps could make a significant dent in emissions if widely installed. Currently, they cover about 10% of global space heating demand, but the potential is there for a much greater reach. n nThe extent to which heat pumps can be rolled out depends on whether nations deliver what they’ve written into their existing policies or climate pledges. In the chart above, STEPS refers to countries’ Stated Policies Scenarios on heat pumps, with demand for them expected to double by 2035. n nThe IEA reports that trade in heat pumps has grown less rapidly than other clean energy technologies, but that installations are set to increase in the coming decades. Government support for heat pumps – as originally laid out in the US Inflation Reduction Act, for example – is needed for nations to achieve their climate and energy security goals, says the IEA. Bans on new fossil fuel boilers across Europe will also help. n n4. Which homes will benefit most? n nInsulating buildings is a key component of improving energy efficiency and reducing emissions. The data from Denmark in the chart above demonstrates that heat pumps in the best-insulated homes use 30% less electricity than those with poor insulation. n nImproving a home’s energy rating by just two grades (from D to B) can halve energy demand, the IEA says. Making buildings more energy-efficient also means households can use lower-capacity heat pumps, which are cheaper to install. n nA recent study in the UK found that heat pumps could cut heating bills for British people by around half – but only if the government takes steps to make electricity cheaper and reins in gas companies’ profits.