Europe's Sizzling HVAC Market: Opportunities and Challenges

Last updated: 16 October 2023


In recent years, Europe's air conditioning (AC) market has seen significant growth, driven by the pressing issue of global warming and rising temperatures. This surge in demand for ACs has resulted in a nearly 60% increase from 2014 to 20211. To capitalize on this growing industry, it's essential to grasp the current landscape and the opportunities and challenges it presents.

Current Market Snapshot: Market Size and Key Players

The estimated value of the European AC market reached approximately $30 billion in 20222. Key players in this market are primarily European and Japanese manufacturers. Notable European brands include Electrolux and Bosch, while Toshiba, Hitachi, and Daikin are major Japanese players. Carrier Global represents the American presence in Europe.

Geographical Trends

Within the EU, Southern European countries, notably Italy, have emerged as the largest markets due to their warmer climates. Italy's purchase of over 1.5 million units in 2021 significantly surpassed Spain and France3.


The EU's AC market is subject to the Ecodesign and Energy Labelling Directive (Regulation No 206/2012), which outlines specific requirements for ACs sold in the EU4. These requirements cover minimum energy performance, noise levels, and product information. However, it's crucial to note that some EU countries may impose stricter regulations, and non-EU European nations may have differing rules.

Popular Products

In Europe, various AC types are available but split and multi-split ACs are the most popular choices. European consumers prioritize power and cost efficiency due to elevated electricity prices, partially influenced by the Russo-Ukrainian War, as well as sustainability concerns.

Future Outlook:


  1. Costs: High electricity prices remain a significant barrier to AC adoption in Europe.
  2. Noise: Noise generated by AC units continues to be a source of concern, particularly in urban areas.
  3. Environmental Concerns: Meteorologists have warned that doubling AC unit adoption in cities like Paris could raise local temperatures significantly5.



  1. Market Growth: Forecasts anticipate the European AC market doubling in size over the next decade, primarily driven by the effects of global warming and rising temperatures.
  2. Low Household Penetration: ACs are not yet widely adopted in European households, with a penetration rate of only around 19%, compared to 90% in the US6.
  3. Energy Efficiency: Companies that can offer energy-efficient ACs or alternative cooling solutions with reduced energy consumption are poised to thrive in this expanding market.


In navigating this dynamic landscape, businesses in the AC industry must not only embrace the opportunities but also address the challenges conscientiously. By developing energy-efficient and sustainable solutions that cater to the diverse needs of European consumers, companies can thrive in the burgeoning European AC market while contributing to a cooler and more sustainable future.

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