How one Swedish company is taking on Europe's 'forgotten' climate change problem

Aira aims to install heat pumps in five million European homes as it looks to decarbonise domestic heating on the continent

Swedish-owned company Aira aims to install five million heat pumps in European homes to decarbonise domestic heating by the end of the decade. Getty
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A new company has been launched to tackle carbon emissions from residential heating, something that has been described as “the forgotten problem of Europe”.

Vargas, a major Swedish investment group, has set up a direct-to-consumer heat pump company called Aira that aims to install the devices in five million European homes by the end of the decade.

The company – initially offering its services in Germany, Italy and the UK with plans to expand to more than 20 European countries – said that residential heating currently accounts for 10 per cent of European CO2 emissions.

“We think residential heating is the forgotten problem of Europe,” Harald Mix, chairman of Vargas, said at the launch of Aira in Stockholm.

He added that residential heating was the third-largest CO2 contributor in Europe, behind public electricity and heat production (19 per cent) and cars (12 per cent).

Now is the time to act. The planet is on fire
Harald Mix, chairman of Vargas

“Now is the time to act,” he said. “The planet is on fire. Most people agree on that. We think this is creating a lot of momentum.”

Aira has designed its own heat pumps, which are being produced at a 55,000-square-metre repurposed Volvo factory in Wroclaw, Poland.

The company will be up against other key heat pump manufacturers operating in Europe, such as Bosch, Viessmann and Panasonic.

Instead of paying a large upfront free, consumers will typically pay a monthly subscription of about £75 for the installation of the heat pump.

Aira says that these cost will be recouped by the lower energy bills, with the company claiming that heat pumps are four times more efficient that gas boilers.

Heat pumps, which use technology similar to that employed in refrigerators, use electricity to extract heat from the surrounding air.

Their impact on reducing carbon emissions is increased if renewable sources are used to provide power.

The company has been the focus of some negative press coverage, with some suggesting that the devices are unable to generate the same levels of heat as gas boilers, which are installed in the majority of UK homes.

Aira insists that half of households in the UK are already suitable for heat pumps, with half of the remainder needing modest changes to their heating systems.

Only 1 per cent of UK households, 4 per cent of Spanish households, 5 per cent of Polish households and 5 per cent of German households have heat pumps installed, compared to figures as high as 60 per cent in parts of Scandinavia.

Daniel Sarefjord, the chief executive of Aira in the UK, said there were “a lot of myths” about heat pumps and described the market for consumers as currently being “disjointed and fragmented”.

“There are many, many millions of homes [in the UK] that are heat-pump ready,” he said. “It may be that they have to change two or three radiators, some minor costs.

“Then there’s probably 20 to 25 per cent more that are heat-pump ready with fairly minor [changes], such as loft installation or cavity wall insulation.”

Consumers may wish to look at “green mortgage extensions” to finance the installation of heat pumps, Mr Sarefjord said. Installations will take place only in properties deemed suitable for the technology.

He said despite scepticism in some markets, heat pumps have been used for two decades in Sweden and “have always kept us good and warm”.

In the UK, Aira has a leadership team of about 15 and expects to have “a few hundred” people working for the company by the end of the year, with many engineers expert in other technologies being retrained so that they can work on heat pumps.

There are what Aira describes as “strong regulatory tailwinds” that should speed the adoption of the devices across Europe.

Currently, upfront investments of as much as €20,000 (Dh80,396) are required for heat pump installation, although subsidies of thousands of euros are available in some countries.

While residential heating is said to account for a tenth of Europe’s total carbon emissions, the proportions vary markedly.

In Sweden, 1 per cent of emissions are caused by direct combustion of fossil fuels to heat households, while that figure in Italy is 17 per cent, in the UK 16 per cent, in Belgium 12 per cent and in Germany 11 per cent.

Besides Aira, Vargas has other ventures in sectors such as low-emission steel production and the manufacturing of batteries for the automotive sector.

Updated: June 17, 2023, 4:00 AM