IEA Global Energy Review 2025: Main Takeaways for Heat Pumps
The International Energy Agency (IEA) has just released its Global Energy Review 2025, offering a comprehensive snapshot of the global energy landscape in 2024, a year shaped by record-high temperatures, digitalisation, electrification, and a surge in clean energy adoption. Growth in energy-related carbon dioxide (CO2) emissions continues to decouple from global economic growth. This trend had been even stronger if weather in 2024 had remained consistent with 2023. The deployment of solar PV, wind, nuclear, electric cars, and heat pumps since 2019 now prevents 2.6 billion tonnes of CO2 annually, which is equivalent of 7% of global emissions.
The report highlights a 2.2% increase in global energy demand, with electricity demand rising even faster at 4.3%. Impressively, 80% of the growth in electricity generation was met by renewables and nuclear, marking a critical shift in the global power mix.
The factors behind the rising global electricity use were mainly increasing cooling demand resulting from extreme temperatures, growing consumption by industry, the electrification of transport, and the expansion of the data centre sector.
Spotlight on heat pumps
The report also reveals that despite their critical role in decarbonisation, global heat pump sales declined by 1% in 2024, recovering somewhat after a 10% year-over-year drop in the first half see Figure 1. The IEA attributes the decline to:
Sharp declines in Europe, the third-largest heat pump market, are down 21%, marking the largest decline ever recorded in the region, both in relative and absolute terms. This drop was largely driven by Germany, where sales fell by almost 50%, and by France, where they declined by 25%, were the primary contributors, largely due to:
- High electricity prices relative to natural gas
- Political and regulatory uncertainty
- A slowdown in new building construction
Strong rebound in the U.S. — The second-largest heat pump market sales rose by 15% overall, with a 30% jump in the second half of the year. Heat pumps continued to gain market share over fossil fuel systems and outsold natural gas furnaces by 30%, a record high.
In Japan, the fourth-largest heat pump market, sales increased by over 5%, recovering after a weak start to the year. Sales of both air-to-water systems (which are mainly used for domestic hot water in Japan) and air-to-air systems (which are typically used for space heating) increased on an annual basis.
China remains the largest heat pump market globally, holding the largest share of manufacturing capacity for heat pump units and certain key components, such as compressors. However, growth stagnated by year-end, despite continued manufacturing leadership.
Figure 1: IEA (2025), Heat pump sales for selected regions, 2019-2024, IEA, Paris https://www.iea.org/data-and-statistics/charts/heat-pump-sales-for-selected-regions-2019-2024, Licence: CC BY 4.0
What next?
The IEA notes that heat pumps, alongside solar PV, wind, EVs, and nuclear, are already avoiding 2.6 billion tonnes of CO₂ annually. The recent dip in sales serves as a reminder that supportive policy frameworks, affordability, and market certainty are essential to keep momentum going.
Read the full Global Energy Review 2025 here: https://www.iea.org/reports/global-energy-review-2025