Boiler, Solar Industries Oppose Heat Pump Renewable Label
“Will you kill small businesses to save large corporations!” “Air-source heat is not renewable energy!”
At 2 p.m. on the 13th, approximately 200 people holding placards reading “Withdraw the Deceptive Air-to-Air Heat Pump Ordinance” chanted slogans in front of the Ministry of Climate, Energy and Environment in Government Complex Sejong. Behind the protest site, a banner fluttered: “Air-to-air heat pumps powered only by electricity, a major source of carbon emissions.” The participants were small business owners and field technicians from 15 related organizations, including boilers, mechanical equipment, and solar power.
They gathered in protest against the ministry’s legislative notice last month to revise an ordinance designating air-to-air heat pumps as renewable energy. Participants argued, “Air-to-air heat pumps are not an energy source that can be classified as renewable energy,” and added, “Providing institutional benefits to specific large corporations under the pretext of expanding renewable energy undermines trust in the entire decarbonization policy.”
As Minister Kim Sung-whan of the Ministry of Climate, Energy and Environment has accelerated the spread of heat pumps, which utilize heat from the air for heating and hot water, as a key means of decarbonization, small businesses in boilers, equipment, and solar power have stepped in to apply the brakes. The industry appealed that if heat pumps are widely adopted, approximately 600,000 jobs across related industries—such as boiler manufacturing, installation, maintenance, equipment design, and piping materials—could be threatened.
◇ “Policy Killing SMEs and Benefiting Large Corporations”
The ministry announced a plan last month to supply 3.5 million heat pumps by 2035, aiming to reduce 5.18 million tons of greenhouse gases. To this end, it allocated 5.83 billion Korean won in this year’s budget and is pushing for a subsidy of up to 7 million Korean won per household for installation. Simultaneously, it accelerated policy implementation by legislatively notifying a revised ordinance recognizing air-to-air heat pumps as renewable energy.
In response, the boiler and equipment industries protested, “The heat pump market is already dominated by large corporations like LG and Samsung, which account for over 90%,” and added, “Given the structural similarity of heat pumps to air conditioners, large corporations with existing cooling technology have an advantage, and the government is institutionalizing this.” Small businesses cannot compete due to funding and technological gaps, and heat pumps, being structurally simple, are difficult to absorb existing boiler equipment personnel.
The industry further warned that even a large-corporation-dominated market may not last long, and the market could eventually be taken over by Chinese companies. They argued that, as seen with solar power and electric buses, where markets formed under eco-friendly policies were quickly dominated by Chinese companies with price competitiveness, the same pattern could repeat. One industry official said, “Chinese-made heat pumps are 50–60% cheaper than domestic products,” and added, “Eventually, even large corporations may end up importing and selling Chinese products.”
◇ “Unclear Carbon Reduction Effects”
Existing eco-friendly industries, including solar, geothermal, and water-source heat, also oppose the inclusion of heat pumps in renewable energy. As the government announced that heat produced by heat pumps would be recognized as renewable energy in the certification of new zero-energy buildings (ZEB) and would receive additional points for energy-saving performance, building owners are likely to meet mandatory standards more easily with heat pumps, which are relatively low in cost and construction complexity. The industry worries that this could naturally push out existing renewable energy installations, such as solar panels.
Controversy continues over the carbon reduction effects of heat pumps. As outdoor temperatures drop, the coefficient of performance (COP) of heat pumps decreases, leading to a sharp increase in electricity consumption. Given South Korea’s climate, where winter temperatures often fall to -7 to -10 degrees Celsius, the efficiency degradation issue is more pronounced. With approximately 60% of domestic electricity currently generated from fossil fuels like coal and LNG, questions arise whether heat pumps, which run on electricity, are truly more eco-friendly than boilers using city gas. One energy industry official said, “Reviewing exceptions to the progressive electricity rate system to reduce heat pump electricity costs shifts unverified policy costs to other consumers.”
The ministry stated, “Starting with 2,500 units subsidized by the national treasury this year, we plan to gradually expand supply,” and added, “We will focus on single-family homes with solar panels to prevent abrupt transitions.” Regarding concerns about the spread of Chinese products, it said, “We will grant additional points for thermal efficiency and greenhouse gas reduction coefficients to help domestic products protect the market.”
Professor Yoo Seung-hoon of Seoul National University of Science and Technology said, “If 3.5 million heat pumps are supplied, a surge in winter electricity demand is inevitable,” and emphasized, “Rather than urban apartments, the market should start with limited sectors like single-family homes on the outskirts of cities, and a step-by-step approach is needed while verifying electricity demand and carbon reduction effects.”