The Policy, Regulatory and Standards Landscape

This chapter maps the policy, legal and standards framework that governs the design, sale, installation and servicing of commercial chillers and heat pumps in Europe. The framework operates on three interlocking levels: (1) international agreements that set the overall trajectory for the refrigerant phase-down, (2) EU-level regulations and directives that translate that trajectory into binding market rules and (3) technical standards that determine what is practically buildable and installable under those rules.

Because natural refrigerants sit at the intersection of climate policy, chemicals policy and product safety, developments at any one of these levels can materially change the competitive position of natural refrigerant-based equipment relative to synthetic alternatives.

The regulatory starting point for the entire refrigerants sector is the 1987 Montreal Protocol on Substances that Deplete the Ozone Layer, which phased out chlorofluorocarbons (CFCs) and, later, hydrochlorofluorocarbons (HCFCs) on the basis of their ozone-depleting potential.

The hydrofluorocarbons that came afterward had no ozone-depleting potential but carried high global warming potential. Their rapid market growth after the HCFC phase out prompted the 2016 Kigali Amendment to the Montreal Protocol, under which parties committed to a phase down of HFC production and consumption. The EU, as an early mover, front-loaded its own HFC phase-down well ahead of the Kigali schedule through successive f-gas regulations.

The Kigali Amendment is important to the use of natural refrigerants in commercial chillers and heat pumps in Europe for two reasons. First, it sets a global floor. Countries outside the EU are also reducing HFC availability, which supports the long-term investment case for natural refrigerant technology even in markets where near-term EU-style GWP bans do not yet apply. Second, it created the diplomatic and technical infrastructure – national HFC quota systems, reporting obligations, technology and safety standard exchange – that the EU’s own F-gas Regulation builds directly upon.

The EU’s first F-gas Regulation in 2006 introduced containment, leak checking, recovery and technician certification obligations for equipment using f-gases but did not restrict their use directly. Its containment provisions required operators of stationary refrigeration, air-conditioning and heat pump equipment to have systems checked for leaks, to keep records of the type and quantity of f-gas held in each system, and to use only certified technicians for installation, maintenance, servicing and decommissioning. Equipment above defined charge thresholds also had to be fitted with automatic leak-detection systems checked annually.

The 2014 revision to the EU F-gas Regulation was the first to impose a hard EU-wide HFC supply quota and phase-down schedule, alongside targeted equipment bans and an obligation for technician certification training to include general information and safe handling practices for alternative refrigerants, including naturals. The quota system allocated annual, tradeable allowances to individual HFC producers and importers in bulk, calculated from each undertaking’s historical share of the EU market, with the EU-wide cap reduced in a series of discrete steps through to 2030.

From 2017 the same quota system was extended to cover HFCs pre-charged in imported refrigeration, air-conditioning and heat pump equipment. This first phase down was designed to cut EU HFC supply by 79% between 2015 and 2030 on a CO₂-equivalent basis and is what began pushing synthetic refrigerant costs upward and creating space for commercial natural refrigerant chillers and heat pumps.

The 2024 revision to the EU F-gas Regulation is the single most impactful piece of legislation to the market for commercial chillers and heat pumps using natural refrigerants. The 2014 regulation’s trajectory, while assertive for its time, was calibrated against a weaker set of international and domestic commitments than the ones the EU had signed up to by 2020. Furthermore, the 2014 regulation had enforcement gaps, especially when it came to illegal trade.

The 2024 revision to the EU F-gas Regulation added the customs-integration and refillable-container rules specifically to close that gap. The quota systems hitting pre-charged equipment were tightened, and 23 additional f-gases were brought into scope.

The 2024 EU F-gas Regulation has accelerated the HFC phase down considerably: The EU-wide quota falls from 82.3 million metric tons CO₂-equivalent (2023 baseline) to approximately 42.9 million metric tons CO₂-eq for 2025–2026 (a 48% cut versus 2023), roughly 21.7 million metric tons CO₂-eq for 2027–2029 and continues stepping down toward a full ban on placing HFC equipment on the market from 2050.

Beyond the overall quota, Annex IV of the Regulation sets a series of GWP-based placing-on-the-market bans that directly impact commercial chillers and heat pumps:

These thresholds are the primary driver of the technology transition this report tracks. They set the dates by which HFC- and most HFC/HFO-blend chillers and heat pumps above the relevant GWP ceiling can no longer be legally placed on the EU market, and they explain why manufacturers are reengineering product lines around natural refrigerants.

For manufacturers of natural refrigerant equipment, the practical effect of the 2024 EU F-gas Regulation is to convert what was, under the 2014 version, a gradually rising cost and compliance burden on synthetic refrigerants into a series of hard market-access deadlines. The heat pump capacity thresholds in Annex IV align closely with the 30–400kW capacity range that is the focus of this report, and which for chillers is even narrower.

This means that by the early 2030s the large majority of new commercial chillers and heat pumps sold in this range will need to use a refrigerant with a GWP at or below 150. This is a ceiling that synthetic HFC/HFO blends may struggle to meet without moving into PFAS-scrutinized HFO territory.

The F-gas Regulation does not itself restrict HFOs, which with a near-zero GWP are capable in principle of meeting the aforementioned GWP≤150 thresholds. A separate, parallel regulatory process, the proposed universal restriction on PFAS under the EU’s REACH Regulation, is what makes the medium-term future of HFOs considerably less certain.

The restriction proposal, submitted to the European Chemicals Agency on January 13, 2023, by the national authorities of Denmark, Germany, the Netherlands, Norway and Sweden, defines PFAS broadly as any substance containing at least one fully fluorinated methyl or methylene carbon atom. Under this structural definition, most HFO refrigerants used or proposed for use in chillers and heat pumps (for example R1234yf, R1234ze and blends built on them) fall within the proposal’s scope, as do many HFC/HFO blends.¹

The proposal has moved through two rounds of scientific committee review since submission:

Several legal commentators note that the SEAC’s draft opinion found the HVAC&R-specific derogations proposed by the dossier submitters “not justified” as drafted. This was on the basis that a blanket safety-standard carve-out would be too broad and administratively unworkable. The SEAC has instead proposed narrower, time-limited derogations. The general-use HVAC&R derogation that industry associations had sought, allowing the continued use of PFAS refrigerants wherever national safety codes prevent the use of a flammable or toxic alternative is, in the draft opinion as published, narrower and more conditional than initially proposed.

The SEAC is expected to finalize its opinion by the end of 2026. It will be transmitted along with the RAC’s final opinion to the European Commission, which is then to prepare a draft amendment to Annex XVII of REACH. This is expected to occur within three months of receipt, and it will lead to a qualified-majority vote by member states in the REACH Committee (55% of member states representing at least 65% of the EU population).

Restrictions adopted under this route typically apply 18 months after entry into force, subject to whatever transition periods and derogations are ultimately agreed. On this timeline, a REACH Annex XVII PFAS restriction affecting refrigerant HFOs could realistically enter into force toward the end of this decade.

The interaction between the F-gas Regulation’s GWP≤150 thresholds and a prospective PFAS restriction on HFOs is the single most important source of regulatory uncertainty facing commercial chillers and heat pumps with synthetic low-GWP refrigerants. If both instruments proceed broadly as currently drafted, manufacturers of commercial chillers and heat pumps would face a narrowing set of compliant synthetic options by the early-to-mid 2030s.

Given this, natural refrigerants would not be a compromise or a niche fallback option but rather the technology best positioned to meet both regulatory challenges at once, cutting climate impact and eliminating persistent chemical pollution in a single transition.

Chillers and heat pumps are subject to EU product efficiency legislation under the Ecodesign framework and the Energy Labelling Regulation. These set minimum energy performance requirements and, for many product categories, a comparative efficiency label. They interact with refrigerant choice because seasonal efficiency calculations are sensitive to the thermodynamic properties of the refrigerant used and to how systems are tested.

Two different regulatory categories, or lots, are most relevant to this report’s scope:

Both regulatory pairs date to 2013 and are currently under review. The revision is expected to tighten minimum efficiency requirements, extend scope to hybrid heat pumps and modernize test methods.²

A separate, related workstream covers commercial refrigeration and, indirectly, chillers: a public consultation on Ecodesign and Energy Labelling requirements for commercial refrigeration opened on December 4, 2025, and industry associations have pressed the Commission to keep scope, test conditions and label design consistent across the heater, water heater and chiller/cooling dossiers, including proposals to extend combined heating-and-cooling products up to 1MW (284TR) heating and 2MW (568TR) cooling capacity under a single framework.

None of this legislation restricts refrigerant choice directly, but because natural refrigerant systems, particularly CO₂ transcritical and propane units, can post efficiency advantages at part-load and in free-cooling operation, the specific test methods and load profiles ultimately adopted will influence how competitive natural refrigerant equipment appears on the resulting energy label.

The modified Energy Performance of Buildings Directive (EPBD) entered into force across the EU on May 28, 2024. Member states were required to incorporate it into national law by May 2026.³ It is the principal EU instrument driving demand for commercial heat pumps through several mechanisms.⁴

The revised Renewable Energy Directive sets a binding EU-wide target of at least a 49% renewable energy share in the buildings sector by 2030 and requires member states to increase the share of renewable heating and cooling annually. Ambient heat captured by heat pumps counts toward this target.

The REPowerEU Plan’s target of at least 30 million additional heat pump installations by 2030 is the clearest statement of the political priority placed on heat pump deployment. It is one reason the 2024 F-gas Regulation includes a safeguard mechanism specifically for heat pump HFC supply rather than applying the phase down uniformly across all equipment categories.

REPowerEU, launched by the European Commission in May 2022 in direct response to the loss of Russian gas, is the broader energy security program within which the 30 million heat pump target sits. REPowerEU also called for a doubling of the annual heat pump deployment rate relative to the pre-2022 baseline and was accompanied by a dedicated EU Heat Pump Action Plan. This included non-regulatory measures, skills and training support, streamlined permitting for renewable heating installations and a call for member states to reduce electricity taxes and levies relative to those on gas to narrow the running-cost gap between heat pumps and fossil boilers.⁵

REPowerEU functions less as a source of binding equipment requirements than as the political anchor that other instruments discussed in this chapter refer back to. It is cited in the F-gas Regulation as a constraint on how aggressively the Commission can allow HFC supply to tighten. Funding for member states’ recovery and resilience plans allocated under REPowerEU has co-financed national heat pump subsidy schemes that sit alongside other EU-level frameworks.

A second emissions trading system (ETS2) extends EU carbon pricing for the first time to fuel combustion in buildings and road transport sectors. ETS2 is an upstream system: The obligation to surrender allowances falls on fuel suppliers rather than on building owners or occupiers directly. However, the cost is expected to pass through to end users via fuel prices, giving oil- and gas-fired heating a rising carbon cost compared to natural refrigerant heat pumps running on electricity.⁶

ETS2 was originally due to become fully operational, with certificate surrender obligations, from 2027. In late 2025 the Council of the EU and European Parliament agreed to postpone this to 2028, citing concerns about energy affordability. Monitoring and reporting obligations did begin in 2025, and full auctioning and price discovery are expected from 2027 ahead of the first compliance surrender in 2028. A Social Climate Fund, financed in part by ETS2 auction revenue, will be used partially to co-finance building renovation and clean-heating investments, including heat pumps.⁷

ETS2 is best understood as a demand-side complement to the F-gas Regulation’s supply-side restrictions. Where the F-gas Regulation constrains what refrigerant a new chiller or heat pump may use, ETS2 is designed to make the fossil-fired alternative to a heat pump progressively more expensive to run, reinforcing the underlying investment case for electrified, natural refrigerant-based equipment.

The Net-Zero Industry Act (NZIA), adopted in 2024 as part of the Green Deal Industrial Plan, designates heat pumps and geothermal energy as one of eight priority “strategic net-zero technologies.” They are eligible for the Act’s fastest permitting tracks, “net-zero strategic project” status and preferential access to public and private financing instruments. The NZIA sets an EU-wide ambition of manufacturing at least 40% of the strategic net-zero technologies the EU needs domestically by 2030.⁸

The NZIA is industrial rather than product policy. It does not set GWP limits, efficiency requirements or safety rules and does not by itself favor natural over synthetic refrigerant equipment. Formally classifying heat pump manufacturing as strategically important gives EU heat pump and chiller manufacturers (including natural refrigerant specialists) a claim on streamlined permitting for new or expanded factories, on public procurement and financing criteria.

Regulation sets what refrigerants may be placed on the market and by when. Standards determine how equipment using those refrigerants may be safely designed, installed, operated and serviced. Because most natural refrigerants used under this report’s scope are either flammable, toxic in high concentrations or operate at high pressure, standards compliance is often the binding constraint on deployment even where the underlying refrigerant is fully compliant with the F-gas Regulation and REACH.

EN 378 is the principal European safety standard for stationary refrigeration and heat pump equipment. It sets maximum refrigerant charge limits by occupancy category and machinery room ventilation requirements, based on the ISO 817/ASHRAE 34 safety classification system.⁹ Under this classification, CO₂ is A1 (non-flammable), propane and isobutane are A3 (higher flammability), and ammonia is B2L (toxic, lower flammability).

EN 378’s charge limits historically constrained propane and ammonia systems to relatively low refrigerant charges in occupied spaces, which pushed early natural refrigerant chiller and heat pump designs toward smaller, modular or outdoor-only configurations. EN 378 is periodically revised to reflect updated risk assessments and field experience, and recent revisions have progressively raised permissible charge limits for flammable refrigerants in several applications.

IEC 60335-2-40 sets the detailed appliance-level safety requirements that apply alongside EN 378’s system-level requirements. These include maximum charge, leak detection, ventilation and ignition-source control for flammable refrigerants. Successive editions of the standard have specifically addressed the growing use of flammable refrigerants in heat pumps and air-conditioning equipment, and manufacturers’ ability to bring higher-charge propane or flammable HFO/HFC-blend systems to market has depended directly on these editions keeping pace with F-gas Regulation-driven refrigerant transitions.¹⁰

Both the 2014 and 2024 F-gas Regulations require technicians who install, service, maintain, repair or decommission equipment containing f-gases to hold a national certification. The 2024 regulation extended this certification logic to alternative refrigerants used as substitutes, requiring member states to ensure appropriate training is available for technicians working with flammable, toxic or high-pressure natural refrigerants. Industry associations have flagged this as a practical bottleneck to natural refrigerant deployment. Notwithstanding the underlying equipment regulation, the scale of retraining required across the existing HVAC&R installer base is formidable.

Chillers and heat pumps using hydrocarbon refrigerants at charges or in configurations where EN 378’s ventilation and charge-limit provisions alone are not judged sufficient to eliminate an explosive atmosphere risk fall additionally within the scope of the EU’s ATEX framework and Directive 1999/92/EC on employer obligations for workplaces where explosive atmospheres may occur.

In practice, most commercial hydrocarbon chillers and heat pumps in the 30–400kW range are designed to keep refrigerant charge and ventilation within EN 378 limits specifically so as to avoid ATEX-rated component costs. ATEX classification becomes a live design consideration for larger hydrocarbon charges, indoor plant rooms with limited ventilation or non-standard installation configurations.

EN 378 and IEC 60335-2-40 set EU-harmonized minimum requirements. Member states, and in several cases individual municipalities or fire authorities, still retain discretion to impose additional local requirements on flammable or toxic refrigerant equipment. These could include stricter machinery room location rules for ammonia systems near occupied buildings, additional permitting for hydrocarbon charge thresholds or fire brigade notification requirements for larger installations.

This local layer is the practical mechanism behind the safety-requirement exemptions referenced throughout the F-gas Regulation’s Annex IV thresholds and, prospectively, in the PFAS restriction’s HVAC&R derogation debate. Where a national or local safety authority will not permit a flammable or toxic natural refrigerant charge sufficient for a given application, a synthetic refrigerant with a higher GWP limit remains available under both regimes. National and local safety code variation is therefore one of the more durable sources of country-level difference in natural refrigerant uptake, independent of the EU-level regulatory trajectory described elsewhere in this chapter.