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  • Writer's pictureKai Zhang

China Increased the Export of Air Source Heat Pumps to Europe

The recent energy shortage in Europe has stimulated the demand for energy-saving and heating appliances. And the export quantity of heat pumps from China to Europe has increased significantly.

 

We have learned from the China Household Electrical Appliances Association that since the beginning of 2023, the number of heating appliances such as electric heaters and electric blankets exported from China to Europe has surged. At the same time, air source heat pumps that use green energy have shown explosive growth.

 

Since 2022, as the Russia-Ukraine war continues to ferment, the European energy crisis has intensified, which has caused great trouble to the industry and people's livelihood of many European countries. While accelerating the transformation of the energy structure, many European countries are also launching a nationwide energy-saving campaign to deal with energy shortage.


heat-pump-project

According to Eurostat data, as of July 2022, the annual growth rate of energy price inflation in the EU reached 38.3%, with natural gas and electricity prices experiencing annual growth rates of 52.2% and 31.1%, respectively. Since August, energy prices have continued to grow rapidly. According to data from the European Electricity Exchange, the average price of the European power system on August 30th was 462.1 euros per megawatt hour, a 6-fold increase from the beginning of the year; On August 26th, the Dutch TTF benchmark natural gas futures closed at 339.195 euros per megawatt hour, a 5-fold increase from the beginning of the year.

 

The European market has always been the growth engine of China's home appliance exports, with continuous growth in the past six years. In 2021, the export value was 29.54 billion US dollars, an increase of 34.4%, accounting for 28.3% of China's total home appliance industry exports. However, since 2022, the prosperity of the European market has dropped significantly due to the Russia-Ukraine war, high inflation, currency depreciation and other factors. According to data analysis from the General Administration of Customs, the export value of China's home appliance industry to Europe from January to July 2022 was 14.93 billion US dollars, a decrease of 9.3%, marking the largest decline since 2009. Since the beginning of the year, it has been showing negative growth, significantly lower than the overall export performance of China's home appliance industry.


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From the perspective of segmented categories, since 2022, the export value of most household appliances to Europe has shown a downward trend. The growing categories mainly include air conditioning, electric water heaters, electric heaters, electric blankets, and hair dryers. The cumulative export value from January to July was 1.99 billion US dollars, 130 million US dollars, 490 million US dollars, 33.4 million US dollars, and 160 million US dollars, respectively. Among them, electric blankets led other categories with a growth rate of 97%. Among them, the increase in export volume of air conditioners, electric water heaters, and hair dryers has been flat, while the export volume of electric heaters and electric blankets has rapidly expanded. In addition, the growth trend of air source heat pumps is also very impressive, continuing the high-speed growth trend of 2021 as a whole.

 

According to relevant personnel from the Information Consulting Department of the China Household Electrical Appliances Association, these high growth categories all have a temperature regulating effect, indicating that European consumers are clearly expanding their procurement of heating products to prepare for the upcoming winter.


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From the three main growth categories of electric heaters, electric blankets, and air source heat pumps, Italy, Belgium, the Netherlands, Spain, and Germany have strong import demand for electric heaters. In terms of electric blankets, import demand from various countries has increased rapidly, with Greece, Italy, Poland, Germany, and the Netherlands all showing a doubling growth. In terms of air source heat pumps, China is currently the main supplier of air source heat pumps in Europe, with a market share of 60%; Multiple European markets have shown explosive growth, with China's exports of air source heat pumps to Bulgaria, Poland, Italy, and Spain increasing by 614%, 373%, 198%, and 71% respectively in the first half of the year.

 

Zhou Nan, Secretary General of the Household Appliance Branch of the China Chamber of Commerce for Import and Export of Machinery and Electronics, analyzed to a reporter from First Financial that the export situation of electric heating products this year is good, not only for the European market, but also for the first half of the year, with outstanding growth and significant growth in July. In addition, the export of air source heat pumps has significantly increased and has great potential. Because air source heat pumps are used for heating water heaters and underfloor heating, they are efficient and energy-saving, and mainly use air compression to fix thermal energy.

 

The so-called air source heat pump uses air as a heat source to transfer heat from outdoor air to indoor air in winter and indoor heat to outdoor in summer. The research and production of air source heat pumps in China made significant progress in the 1980s. Currently, the main products include household air source heat pump air conditioners, commercial air source heat pump air conditioning units, and heat pump cold and hot water systems.


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In 2021, China exported over 2 million air source heat pumps to Europe. The industry is optimistic that the export volume of China's air source heat pump products will exceed ten million units in the future. Several European and American countries, including the United States, Canada, Italy, Germany, and the United Kingdom, have implemented strong subsidy policies for the promotion of air source heat pumps. The subsidy for installing an air source heat pump in Europe can reach up to 5000 euros and will be implemented in batches.

 

According to sources from Wanhe Electric (002543. SZ), the sales revenue of its air source heat pump water heater in the first half of 2022 was 86.499 million yuan, a year-on-year increase of over 110%, with an export value of 7.841 million yuan, a year-on-year increase of over 143%.

 

The 2022 semi annual report of Midea Group (000333. SZ) also shows that Midea is increasing its efforts to upgrade its heat pump products. Midea's heat pump products started in 2003 and gradually expanded into a series of products including heat pump water heaters, pool machine heat pumps, commercial heat pumps, and a combination of space heating, cooling, and domestic hot water. According to data from Industry Online, the export value of Midea heat pump products increased by over 200% year-on-year in the first half of 2022.


home-water-heater-system

Air source heat pumps are one of the few industries in the heating and cooling industry that maintained growth in the first half of this year. According to data provided by Industry Online, the sales revenue of China's air source heat pump industry in the first half of 2022 was 7.193 billion yuan, a year-on-year increase of nearly 30%, of which domestic sales revenue was 3.743 billion yuan, a year-on-year increase of 6.82%; The export value was 3.45 billion yuan, a year-on-year increase of 68.2%.

 

Among the top exporting countries in the first half of 2022, Italy, Poland, Australia, and Spain all saw year-on-year growth of over 50%. Industry online analysis suggests that due to the increasing global demand for air source heat pump products, it is expected that the export of air source heat pumps will maintain a growth rate of at least 50% throughout 2022. In the export segmentation products, the growth of swimming pool heat pumps will gradually slow down, while the heating market will continue to be promoted with carbon neutrality policies, especially this year, the demand for heat pump heating in the European market is expected to increase significantly.


home-heating-cooling-system

According to calculations by Cinda Securities, the market space for household heat pumps in the European market will reach 37.73 million units in the future. Combined with the demand for updates and commercial and industrial heat pumps, it is expected that the long-term market demand for heat pumps in the European market will exceed 40 million units, with a corresponding market size exceeding 400 billion euros. Zhou Nan stated that not only Midea and Wanhe, but also multiple home appliance companies such as Gree, Haier, and Hisense are increasing their export business of air source heat pumps.


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