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Countries across the world are signalling an end to the use of carbon intensive fossil fuels for heating and transport, with Norway being the latest country to increase the pressure on the oil industry by introducing a ban on the use of oil and paraffin for heating in all buildings from 2020. This combined with Norway’s pledge to ban the sale of fossil fuel cars by 2020, sets a high benchmark for other countries to follow.
The electric vehicle (EV) market is booming in Norway, EV sales have seen more than a 90% annual growth rate on average! This staggering shift in buying behaviours and consumer preferences shows that a clear Government vision and targeted policy can generate widespread and rapid change. Could this recent announcement initiate a similar step change in the heating industry?
The Environment Minister Vidar Helgesen thinks so, he has quite clearly stated that “those using fossil oil for heating must find other options by 2020,” and indicated that the legislation could be widened to include restrictions on the use of natural gas to heat buildings. This is a strong signal to industry and the public that Norway is committed to a cleaner and greener future and the markets have responded positively.
It is not just Norway making clear statements on the use of fossil fuels, on 6th July France announced that as part of its five-year plan to fulfil commitments under the Paris Agreement, it would ban all petrol and diesel vehicles by 2040 with the aim for the country to be carbon neutral by 2050. Germany and Belgium have also signalled a ban on all petrol and diesel cars, whilst Sweden has announced plans to become carbon neutral by 2045. The Netherlands has focused its efforts on moving away from natural gas as part of its pledge to reduce emissions by 80% by 2050. With these announcements and surely more to come across Europe, the future of fossil fuels is looking bleak.
In the UK, we are waiting for the Government to publish a Clean Growth Plan which will outline how the government plans to deliver carbon emissions reductions to meet the fourth and fifth carbon budgets. After a year of uncertainty and political instability, the plan is now expected in Autumn 2017. Claire Perry, the new Minister of State at BEIS, has stated that the plan must be ‘ambitious, robust and clear,’ and declared it a high priority. NIBE welcomes this commitment and hopes that the plan will provide a long-term, ambitious pathway to lower carbon emissions from our buildings.
As highlighted in the National Grid’s Future Energy Scenarios report, there is no one solution for the heating dilemma, we need a range of technologies to ensure a secure, low carbon energy mix. But the report states that to meet the two-degree scenario, heat pump deployment will need to increase substantially. The Clean Growth Plan must pave the way for the inevitable transition away from oil towards efficient, low carbon heating technologies or the UK could be left behind as other countries around the world embrace renewables. The solutions exist and industry is equipped to make the switch, but the right policy frameworks and government targets are needed to drive the transition.
Phil Hurley's Blog
The UK is committed to developing domestic green energy industries and tackling climate change. Heat pumps are one of a range of technologies that can substantially lower carbon and NOx emissions from UK buildings. Indeed with buildings becoming more energy efficient, the grid becoming increasingly powered by renewables, and the UK looking to support domestic energy industries and supply – the case for heat pump deployment is becoming stronger, especially in off-grid areas and new-build properties.
This report provides policy lessons from European markets that have successfully created the conditions for the deployment of heat pumps, and builds policy recommendations.
The UK Government in its Heat in Buildings consultation published in 2016 expressed its desire to ‘reduce the use of coal and oil in buildings, and how best to promote a transition away from high fossil fuel heating over the coming decades’. The consultation also highlighted the need to ‘consider which kind of policy interventions could support this change’.
NIBE firmly supports the Government’s efforts to develop policy to phase out coal and oil in buildings. The place to start is off gas grid buildings, a market dominated by carbon intensive fuels such as heating oil and subjected to higher and often volatile energy prices. There are some barriers for consumers looking to make the switch and Government has a role to play in enabling the transition to sustainable low carbon heating technologies like heat pumps.
All European markets that have successfully unlocked the potential of heat pumps, like Sweden and Austria, have taxed heating oil in line with its high carbon content and promoted the use of heat pumps where it makes most sense like new build and off gas grid properties. More recently, Norway announced that it will prohibit the use of heating oil by 2020.
The UK should also push forward in its efforts for decarbonisation in the off-gas grid markets and resist calls to maintain the status quo such as the recent report by OFTEC (the trade association for the oil heating industry). The report sets out OFTEC’s vision for the future of off grid heating, recommending the delivery of policy incentives to encourage the replacement of existing oil boilers with more efficient oil fuelled models while suggesting that at some point in the future biofuels will replace heating oil. But boilers installed today will continue to emit carbon over their lifetime and the development of mass market biofuel is uncertain.
The report also argues that technologies such as heat pumps are not cost effective or market ready for widespread deployment. NIBE stress that the Government should not be encouraging homeowners and businesses to install oil boilers, it goes against the Government’s emissions reduction targets and efforts to phase out oil and coal use, and promotes the use of an unsustainable and polluting limited resource.
The UK must be more ambitious than this. The Committee on Climate Change, in its 2017 Report to Parliament, released on 29th June, emphasised the need to significantly increase the delivery of heat pumps in cost effective locations. They remain the leading low carbon option for homes off the gas grid and are also one of the main options for reducing emissions from heating in buildings on the gas grid. The Committee estimates that at least 2.5 million heat pumps should be installed by 2030 in our homes if we are to meet the fifth carbon budget. If we are to move to a cleaner and greener future, coal and oil must be replaced by energy sources that do not cause irreversible damage to our planet. Renewables are the only energy secure, future proof solution. The UK needs to look at the policy levers used by successful Scandinavian countries to phase out oil in off gas grid buildings by 2025. Heat pumps are a proven low carbon solution and they are only bound to become more cost efficient for decarbonisation purposes as installation costs reduce with scale and the electricity grid carbon intensity steeply declines. On the other hand, as the future availability of biofuel in the UK market for domestic heating remains speculative.
NIBE UK Managing Director Phil Hurley commented:
‘Replacing oil with oil will not address the higher carbon and air pollution emissions from these heating systems in the off-grid market, instead these systems will continue to spout out pollution for the next 20 years. In off-grid areas there are sustainable alternatives such as heat pumps which provide clean, green energy. NIBE will continue working in close collaboration with policy stakeholders to realise the potential of heat pumps in the UK and develop policy that reflects their benefits. As part of this effort, NIBE will develop more detailed analysis on appreciating the risks of promoting an approach that maintains the status quo to heating off gas grid buildings.’
NIBE are one of the UK’s leading manufacturers of heat pumps and the market leading heat pump manufacturer in Europe. NIBE also develops a wide range of other renewable heating technologies. NIBE focuses solely on the renewable heating market in accordance with its principles of offering low carbon, efficient products that deliver energy for life. With a growth model that focuses on marketing directly to the consumer and collaborating with specialist installers, NIBE brings unique insight into the UK renewable heat market as well as unrivalled understanding on what has worked in other European renewable heat markets.
The votes have been counted, and the results are coming in. Whilst there remains some uncertainty about the characteristics of the new government, what we do know is that all the major parties agreed to tackle climate change and high energy costs. We, at NIBE, will welcome the opportunity to work with the political parties to develop solutions that drive innovation, grow the market and ensure that homes are warm, comfortable and affordable to heat.
Both the Conservatives and Labour in their election manifestos spoke about their wish to deliver energy that is reliable and affordable, and that the UK should continue to meet its global commitments on climate change. Renewables are the only real energy-secure, future-proof solution to the meeting the climate change targets.
A week before the General Election, Donald Trump announced that the USA would be pulling out of the Paris Agreement on Climate Change. The announcement was not unexpected but still came as a shock to those of us committed to tackling climate change and the transition to a low carbon economy. Addressing climate change is the greatest challenge the world faces, we have a social duty to work together to reduce our impact on the environment and a moral obligation to ensure that the well-being of future generations is not harmed by what we do today.
Whilst the USA moved away from the international agreement, Theresa May, Jeremy Corbyn and other leading politicians stressed their commitment to the Paris Accord and criticised the decision. We must not let Trump’s choice change our stance on climate change, if anything we should increase our efforts to tackle it and shout louder to bring international stakeholders together.
The UK has been and must continue to be a world leader in global action against climate change, but at home, we have much more to do to reduce our impact on our environment. Emissions from homes and non-domestic buildings account for 17% of the UK’s direct greenhouse gas emissions. Efforts by successive governments have failed to encourage significant penetration of low carbon heating technologies in buildings, as opposed to greater success in the fields of electricity and belatedly transport.
As the Government will focus on delivering Brexit, a British Industrial Strategy and plan to reduce emissions, the time has never been better to put a stop to the combustion of fossil fuels in off-grid homes and encourage a greater penetration of heat pumps in the UK. By using local natural power, we can build a more sustainable future for our children and grandchildren.
The UK has managed to significantly reduce its emissions from the power sector as more renewables come onto the grid. This means that electrically powered heat pumps have even greater carbon reduction potential. Using the Committee on Climate Change’s projections for 2027, heat pumps will produce emissions which are 90% lower than oil boilers. This is why oil boilers should not be being installed in our homes; they are unsustainable, polluting and carbon intensive.
NIBE are keen to work with any new government to develop policies that support the deployment of affordable, low carbon heating solutions for homes located off the gas grid. These homes are subjected to higher and often volatile energy prices which is a particular concern for those living in fuel poverty. Many parties have put forward an ambition for the UK to have lower energy costs - we welcome this, however energy bill tariff caps are not the way to achieve lower energy costs. Reducing energy demand, changing consumer behaviours and fuel switching is the only way to deliver lower energy costs today and provide a cleaner, greener future!
Phil Hurley's Blog
Air quality is a hot topic and featured in the main party manifestos published last week. But dangerous emissions from heating have not been given the attention it deserves. Last year ClientEarth successfully took the UK Government to the High Court over what the court ruled to be illegally poor plans to tackle the country’s current air quality crisis. Levels of NOx in the air have regularly exceeded safe and legal levels in the UK, and the court ruled that the Government should develop a new plan to tackle these issues “as quickly as possible.”  After some delay, this plan was published on 5th May 2017. With 40,000 UK deaths linked to air pollution, and related health problems costing the UK economy more than £20 billion every year, the Government must take radical steps to tackle this issue.
The Government’s plan focused solely on transport and whilst road transport accounts for 34% of UK NOx emissions, the remaining two-thirds come from other sources including domestic heating. It is essential that these sources are also tackled. An obvious solution is the replacement of oil boilers with low emission, future-proofed heating systems.
There are 1.1 million oil boilers in the UK, together they emit 4,540 tonnes of NOx per year. This is equivalent to the emissions from over 2.3 million Euro 5 (2009 standard) diesel cars, driving a typical annual mileage. This suggests that running an oil boiler is equivalent to running two additional diesel cars per household!
One of the key proposals from the Air Quality Plan is a diesel car scrappage scheme. Whilst the Government focuses on taking diesel vehicles off the road, they could additionally be helping off-grid households to switch away from oil, providing similar benefits. There is much crossover between the need to support users of old diesel cars to buy new low-emission cars, and off-grid homes saddled with old, inefficient and dirty oil boilers. The Government can help these households make the necessary switch from a polluting fossil fuel technology, to a modern low pollution heating system. Heat pumps offer consumers renewable and reliable heat without the high carbon and NOx emissions associated with the use of oil. Rolling out an oil boiler scrappage scheme across the UK would provide that support.
Boilers installed today will continue to spout pollution for the next 20 years until they are replaced. Using the Government’s numbers on the costs of NOx emissions to society (health costs etc.), the emissions from oil boilers have a social cost of more than £66 million a year (if we monetise the CO2 impact of heating oil this figure would be even higher, but that will be covered in one of my next blogs). More needs to be done to encourage homeowners to replace their systems before they reach the end of their life and install efficient, low emission heating systems like heat pumps. Not only will this reduce air pollution, improve well-being and health, it will also reduce carbon emissions thus contributing to tackling climate change. The truth is, renewables are the only real energy-secure, future-proof solution to the UK’s energy crisis.
If the Government is committed to addressing air pollution, it must also consider the full impact of fossil-fuel based heating. Introducing a boiler scrappage scheme to install ultra-efficient renewable technology like heat pumps alongside the diesel car scrappage scheme, will encourage homeowners to change their inefficient, polluting boilers now rather than allowing them to continue to pollute the environment, damage health and contribute towards climate change over the coming years.
 Courts and Tribunal Judiciary (2016) https://www.judiciary.gov.uk/judgments/clientearth-v-secretary-of-state-for-the-environment-food-and-rural-affairs/
 Royal College of Physicians (2016) https://www.rcplondon.ac.uk/projects/outputs/every-breath-we-take-lifelong-impact-air-pollution
 DEFRA (2017) https://www.gov.uk/government/news/new-air-quality-plan-published-for-consultation
 DEFRA (2015) https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/460398/air-quality-econanalysis-damagecost.pdf
NIBE Industrier AB has acquired 80% of the shares in HT S.p.A., Susegana, Italy (“HT”). The company will become part of the NIBE Element business area.
HT has its headquarters in Susegana, Italy, and has produced highly engineered heating solutions for heating, ventilation and air conditioning, commercial food products, packaging and other industrial applications since 1978. HT’s heating product range consists of cartridge heaters, PTC heaters, strip heaters and heating systems.
HT has one production facility in Italy and two in Romania. Revenue in 2016 amounted to approx. EUR 23 million with an operating margin of 14%. The company has approx. 330 employees.
“The acquisition of HT adds another well-known brand to our European element business providing cost synergies and commercial advantages to the NIBE Group. Their market and technical position and customer base will provide yet another platform for profitable growth,” says Gerteric Lindquist, CEO of NIBE Industrier AB.
The company will continue to run its operations under the present management of Mr. Costante Dall´Anese and Mr. Veniero Peroni. Both Mr. Dall´Anese and Mr. Peroni will remain part owners of HT. NIBE has the option to eventually acquire the remaining 20% of HT S.p.A.
HT will be consolidated into the NIBE Group as from 1 May 2017.
Hello “It´s in our nature”! NIBE Energy Systems to launch new products and a new brand promise at ISH 2017.
The ISH exhibition held in Frankfurt am Main is the world’s largest showcase for energy efficient heating, air-conditioning technology and renewable energies. For the 9th time in a row, NIBE Energy Systems will be there –this year loaded with new products, the largest booth ever and a new brand statement, “It´s in our nature”. A message that salutes the power of nature.
At ISH in Frankfurt am Main, 14-18 March, NIBE Energy Systems will be presenting a broad product portfolio that encompasses heating/cooling, hot water and ventilation. NIBE Energy Systems will be showcasing a strong, wide and smart range of products that meet the expectations of today and tomorrow. Alongside the product range, NIBE Energy Systems will also be presenting the latest in inverter-controlled heat pumps, ground source heat pumps, exhaust air heat pumps and air/water heat pumps and championing the NIBE F2120 with its groundbreaking efficiency and SCOP of over 5.0. Visit our stand and find out about all our new products, such as the NIBE F1355-28, NIBE AMS 10-6,NIBE F2040-6 and NIBE F2120.
“As a premium brand in the market, quality and efficiency are guiding principles for NIBE Energy Systems. At ISH we are excited to be presenting innovative progress in heating solutions as well as a clear and important message. Energy-efficient, innovative and user-friendly products is in our nature, and we are proud to be meeting visitors with great solutions for a greener world and perfect indoor climate. In other words, maximum comfort and minimum carbon footprint,” says Kjell Ekermo, Director, NIBE Climate Solutions.
By using a climate system built on self-learning smart technology, users can easily minimise energy consumption, without having to sacrifice comfort.
At the same time, the importance of reducing carbon dioxide emissions is widely recognised. NIBE Energy Systems has incorporated this into its development and new brand message to emphasise nature’s role in human lives.
“It´s in our nature” means that we recognise the power of nature. When we develop our products, we ensure that they are equipped as much as possible to run on natural power, no matter what the outdoor climate conditions. NIBE Energy Systems converts this power into a perfect indoor climate. Naturally, with the least possible environmental impact,”says Magnus Axelsson, Market Communication Manager, NIBE Energy Systems.
At ISH 2017, 14-18 March, 2,500 exhibitors and 200,000 visitors will be teaming up to learn about the innovative future of heating and cooling products and renewable energy solutions. NIBE Energy Systems has attended ISH since 2001 and, in 2017, the stand area will have grown to 650 square metres. You can find NIBE in Hall 8.0, stand D65.
“2016 was a strong year for NIBE with a considerable increase in both sales and profit. The year was distinguished by an intense period of acquisitions, primarily in North America, stable organic growth and a successful preferential rights issue, together ensuring good future growth,” said Gerteric Lindquist, MD and Group CEO of NIBE
NIBE reports a significant increase in both sales and profit in the company’s 2016 year-end report.
“2016 was a strong year for NIBE with a considerable increase in both sales and profit. The year was distinguished by an intense period of acquisitions, primarily in North America, stable organic growth and a successful preferential rights issue, together ensuring good future growth,” said Gerteric Lindquist, MD and Group CEO of NIBE.
“The sales target of SEK 20 billion by 2020 now seems within reach – when the acquired companies are included calculated on a rolling 12-month basis, the Group’s sales amount to more than SEK 17 billion. The acquisition of Enertech Group was approved by the Swedish Competition Authority and it will be consolidated as of 1 March 2017.”
“The recent acquisitions strengthen NIBE Climate Solutions’ position and it is now one of the leading suppliers of sustainable end-to-end solutions in climate control in both Europe and North America.”
“Thanks to long-term, passionate, methodical efforts, the NIBE Element business area has now definitely exceeded a 10% operating margin, and by a good margin.”
“The NIBE Stoves business area has also passed a milestone. With the partial acquisition of Canadian company Fireplace International Ltd, it now has a solid platform in North America and Australia.”
“We have a timely product programme and business philosophy. Profitability is stable and we’re well prepared for additional acquisitions. In a world where it is difficult to make predictions, we remain cautiously optimistic about 2017.”
NIBE Industrier AB has acquired 50% of the shares in heat pump company CGC Group of Companies Inc. in Ontario, Canada, with an option to acquire the remaining 50% of the shares no later than spring 2022.
CGC was founded in 1995 and is headquartered in Mississauga, just outside Toronto, with its manufacturing facility in the nearby town of Fergus.
The company has about 80 employees, sales of approximately SEK 120 million (CAD 18 million) and an operating margin of 19%. CGC mainly targets commercial properties under the well known brands Bulldog Heat Pump, Compax and Varipak.“We now have an additional platform for heat pumps for commercial properties in North America and see good growth opportunities both in Canada and the US,” says Gerteric Lindquist, CEO of NIBE Industrier.
It’s really inspiring to continue the work of developing CGC together with the current owners and founders, Bill Browne and Bob Rutherford. Together they have more than 70 years of experience in the heat pump industry and they will continue to lead the company in strict accordance with our usual acquisition model.”CGC will be included in the NIBE Climate Solutions business area and will be consolidated from 1 February 2017.
The purchase price is not specified because the acquired business will only constitute a small part of the NIBE Group.
For more information: Benny Torstensson, NIBE Industrier AB: +46 433-73 070NIBE Industrier AB is required to disclose the information in this press release under the Market Abuse Regulation and NASDAQ Stockholm’s rules and regulations for issuers. The information was submitted by Benny Torstensson for publication on February 13, 2017 at 08.00.