The IEA World Energy Outlook 2025 confirms it: heat pumps are driving the global clean energy transition. Heat pumps not only cut emissions but also improve energy efficiency and reduce reliance on fossil fuels. By 2035, they could meet nearly 40% of space heating demand in key regions, cutting gas use by 40 bcm and lowering emissions worldwide. Industrial heat pumps are reshaping competitiveness and electrification across Europe. IEA emphasizes that consistent policy measures are critical for the sustained adoption of heat pumping technologies. The message is clear: electrify, innovate, and accelerate.
The International Energy Agency’s (IEA) flagship World Energy Outlook (WEO) is the most authoritative source of global energy analysis and projections. Updated annually to reflect the latest energy data, technology, and market trends, and government policies, it explores a range of possible energy futures and their implications for energy security, access, and emissions.
The WEO 2025 highlights the accelerating role of heat pumping technologies in achieving global energy and climate goals. As nations strengthen their decarbonisation commitments, heat pumps across residential, commercial, and industrial sectors are emerging as a cornerstone of the clean energy transition. According to the IEA (p. 185–187), heat pumps are not only cutting emissions but also improving energy efficiency and reducing reliance on fossil fuels.
Heat pumps powering the global transition
According to the IEA (p. 184–185), global heat pump sales rose by 27% from 2020 to 2024 see Figure 4.11 below. After an exceptional surge during the 2022 energy crisis, sales temporarily declined but rebounded in early 2025, showing signs of renewed growth. The agency reports that heat pump deployment is driven by both cost competitiveness and strong regulatory incentives. In the United States and China, air-to-air heat pumps dominate due to their affordability, while in the Nordic countries, low electricity prices have made heat pumps the preferred heating choice. The IEA further notes that Japan, already a mature market, continues to expand its use of reverse-cycle systems and heat pump water heaters, supported by national subsidy programs (p. 186). By 2035, heat pumps are expected to meet nearly 40% of space heating demand in Japan and the United States, while their share doubles in the European Union and China. Globally, heat pumps are projected to displace around 40 billion cubic metres of natural gas and reduce the energy intensity of heating by up to 8% (p. 185). However, the IEA warns that stable policy support is essential, as fluctuations in gas and electricity prices or policy uncertainty could hinder continued adoption (p. 185–186).
Figure taken from: IEA (2025), Scenarios in the World Energy Outlook 2025, IEA, Paris https://www.iea.org/commentaries/scenarios-in-the-world-energy-outlook-2025, Licence: CC BY 4.0
Industrial heat pumps: driving competitiveness and decarbonisation
Industrial heat pumps (IHPs) are highlighted as a crucial enabler of industrial decarbonisation in the World Energy Outlook 2025. According to the IEA (p. 376–377), IHPs can provide low- and medium-temperature heat using only one-third to one-fifth of the energy required by conventional boilers. Their deployment would enhance European industrial competitiveness while reducing reliance on imported fossil fuels, currently accounting for over 90% of oil and 85% of natural gas use in the region. The IEA emphasises that IHPs are essential to meeting the EU Industrial Clean Deal goal of increasing the economy-wide electrification rate to 32% by 2030 (p. 376). Despite clear advantages, adoption remains limited due to high upfront costs and the need for facility reconfiguration. Yet, policies such as Germany’s carbon contracts for difference (CCfDs) and New Zealand’s capital support programs demonstrate how targeted measures can accelerate deployment (p. 377). The report also notes that in Europe, industrial heat pumps with a coefficient of performance (COP) of 3.5 are already cost-competitive with gas-fired alternatives, especially as electricity markets evolve and flexible demand mechanisms become more common (p. 377), see Figure 8.15 below.
Figure taken from: IEA (2025), Scenarios in the World Energy Outlook 2025, IEA, Paris https://www.iea.org/commentaries/scenarios-in-the-world-energy-outlook-2025, Licence: CC BY 4.0
Electrification and the path to net zero
In the Net Zero Emissions (NZE) Scenario, heat pumps are recognised as the central technology for decarbonising heating in buildings and industries. According to the IEA (p. 335), the share of space heating provided by heat pumps rises from around 12% today to 45% by 2050. In industry, their deployment supports a rise in electrification from about 40% today to more than 50% by 2035. High-temperature industrial processes are harder to electrify directly, but emerging technologies such as electric steam crackers, iron ore electrolysis, and hydrogen-based systems are under development and will complement heat pump-based electrification. Together, these solutions could prevent 2.2 gigatonnes of CO₂ emissions by 2050 under the NZE pathway (p. 335), see Figure 7.16 below.
Figure taken from: IEA (2025), Scenarios in the World Energy Outlook 2025, IEA, Paris https://www.iea.org/commentaries/scenarios-in-the-world-energy-outlook-2025, Licence: CC BY 4.0
Policy support and international collaboration
The IEA highlights that consistent policy measures are critical for the sustained adoption of heat pumping technologies. The World Energy Outlook 2025 lists multiple ongoing initiatives supporting deployment. For example, the EU Recovery and Resilience Facility funds national heat pump incentives, while the United Kingdom’s Clean Heat Market Mechanism and Canada’s Oil to Heat Pump Affordability Programme are designed to accelerate residential and commercial uptake (p. 469). Japan and China have updated efficiency standards for air conditioners and heat pumps as part of broader regulatory reforms (p. 469). These developments align with international collaboration under the IEA Technology Collaboration Programme on Heat Pumping Technologies (HPT TCP), where projects such as Project 60 (retrofitting heat pumps in non-residential buildings) and Project 62 (heat pumps for multi-family residential buildings) address exactly the integration, digitalisation, and performance themes emphasised in the Outlook.
The future of heat pump innovation
The IEA concludes that the next decade will determine how effectively heat pumping technologies contribute to global decarbonisation. As renewable electricity expands and smart control systems mature, heat pumps will become the backbone of electrified heating and cooling worldwide. According to the IEA (p. 335), they are no longer a niche solution but a central technology for achieving net-zero emissions and redefining the global energy landscape.
Source: World Energy Outlook 2025 – Analysis – IEA