Europe HVAC Market To Surpass USD 99.27 Billion By 2030 As Record Heatwaves Accelerate Cooling Demand Arizton

Report Summary:

Market Size (2030): USD 99.27 Billion

Market Size (2024): USD 68.80 Billion

CAGR (2024-2030): 6.30%

Historic Year: 2021-2023

Base Year: 2024

Forecast Year: 2025-2030

Market Segmentation: Equipment, Heating, Air Conditioning, Ventilation, End-User, And Geography

Regional Analysis: Western Europe, Nordic, And Central & Eastern Europe (Cee)

Largest Region: Western Europe (56% Share In 2024)

Smart HVAC and IoT Innovations Drive the Next Wave of Energy-Efficient Replacements

As global energy demand continues to rise, tripling within the construction sector over the past two decades, the move toward smart, efficient, and connected HVAC solutions is accelerating. Space cooling already accounts for over 9% of global electricity use in 2024 and is set to approach 10% by 2025, pushing building owners to modernize faster than ever. Moreover, developed markets such as Europe are expected to surpass 157 million installed HVAC units by the end of 2024, driven by extreme heatwaves, stricter building energy codes, and stronger post-pandemic indoor air quality expectations. Alongside this, soaring electricity costs, where HVAC systems can consume up to 40% of peak commercial power bills, are prompting both businesses and households to replace outdated systems with smart, IoT-enabled technologies that enhance efficiency, reduce operational waste, and strengthen long-term energy management. This momentum is reshaping opportunities to lead the future of intelligent climate control.

Government Incentives Ignite Europe's Smart and Sustainable HVAC Revolution

Across Europe, a new wave of supportive government policies aimed at expanding renewable energy sources (RES) and cutting greenhouse gas (GHG) emissions is reshaping the HVAC market. Regulators are tightening decarbonization targets for both the power and transport sectors, while also moving toward future standards that may require large and mega projects to use renewable-powered appliances to qualify as green and sustainable buildings. This shift is creating strong momentum for advanced, energy-efficient HVAC solutions across residential and commercial spaces. Throughout 2024 and into 2025, accelerated incentives, stricter compliance frameworks, and renewed sustainability commitments are driving building owners and developers to adopt modern, high-performance HVAC systems that align with Europe's broader climate and energy transition goals.

Residential Sector Continues to Lead Europe's HVAC Market Growth

The residential sector remains the largest and most influential segment of Europe's HVAC market, supported by rising disposable incomes, a surge in high-rise construction, and a stronger shift toward sustainability and eco-friendly technologies. Demand is supported by steady renovation activity, interest in larger living spaces, and increasing adoption of renewable-powered systems such as geothermal HVAC. While consumers may show short-term caution in non-essential spending, long-term momentum in residential HVAC remains resilient, backed by construction growth and stronger sustainability priorities across Europe.

Regional Demand Shifts as Western Europe Strengthens Its Lead in the HVAC Market

The European HVAC market is experiencing strong momentum, driven by rising construction activity, rapid urbanization, expanding retail and industrial projects, and increased government investment in sustainable building development. Countries such as Germany, the UK, France, and Italy continue to lead demand, supported by regulations encouraging eco-friendly refrigerants and smart, energy-efficient HVAC technologies. Western Europe dominates the regional landscape, accounting for over 56% of the market in 2024 and poised to grow at a 6.60% CAGR, fueled by robust commercial infrastructure and higher consumer spending power. Within this region, air conditioning systems remain the largest and fastest-growing product segment, as rising temperatures and shifting climate conditions increase the need for efficient cooling solutions.