Samsung and LG are strategically investing billions into the burgeoning European heat pump market. These Korean electronics giants are actively acquiring established firms to solidify their market position, anticipating strict EU decarbonization deadlines, even as the sector navigates a recovery from a two-year sales downturn.
Heat pumps, an essential technology that uses electricity to extract warmth from outdoor air instead of burning fossil fuels like gas or oil, are fundamental to the EU’s ambitious strategy to phase out traditional fossil fuel boilers. Both Samsung and LG proudly showcased their advanced post-acquisition product lineups at MCE 2026 in Milan during late March, Europe’s premier heating, ventilation, and air conditioning (HVAC) trade show.
This event marked Samsung’s inaugural joint exhibition with FlaektGroup, the German climate control specialist it acquired in November for an impressive 1.5 billion euros ($1.8 billion). Meanwhile, LG unveiled innovative systems integrating technology from OSO, the Norwegian hot water solutions firm it purchased last July for an undisclosed sum, further strengthening its portfolio in the European market.
These strategic acquisitions occur during a period of market re-adjustment. European heat pump sales experienced a 22 percent decline in 2024, marking a second consecutive annual drop after a significant surge driven by the 2022 energy crisis, as reported by the European Heat Pump Association. However, promising data from the International Institute of Refrigeration shows a 9 percent rebound in the first half of 2025, underscoring the undeniable long-term growth trajectory mandated by evolving regulatory frameworks.
The EU’s updated Energy Performance of Buildings Directive is a key driver, mandating zero-emission standards for all new public buildings by 2028 and extending this requirement to all new buildings by 2030. Furthermore, member states are obligated to outline plans for the complete phase-out of fossil fuel boilers by 2040. Concurrently, stricter regulations on fluorinated greenhouse gases will compel manufacturers to adopt refrigerants with significantly lower climate impact in heat pump systems starting from 2027.
Market analysis by BRG Building Solutions projects substantial expansion, forecasting that the European heat pump market will double its size, from 1.2 million units in 2024 to an impressive 2.4 million units by 2030, highlighting immense growth potential for sustainable heating solutions.
These impending refrigerant regulations are already profoundly influencing product development strategies. Samsung’s innovative new EHS All-in-One system, introduced in Europe this year, utilizes R32, a cutting-edge refrigerant whose global warming potential is approximately 68 percent lower than the widely used industry-standard R410A, demonstrating Samsung’s commitment to environmental responsibility.
LG has advanced even further with its Therma V R290 Monobloc heat pump, which operates on propane-based R290, a natural refrigerant boasting a near-zero climate footprint. Additionally, LG debuted a highly efficient, compact combo unit featuring a built-in water tank, specifically engineered to meet the spatial constraints of modern European apartments, enhancing its appeal in dense urban areas.
Commercial momentum is rapidly accelerating for both companies across Europe. Samsung has successfully secured a significant contract to supply its advanced heat pump systems for a large-scale residential redevelopment project in Cornwall, England. Similarly, LG is actively providing its energy-efficient units for new housing projects in Eindhoven and Ridderkerk in the Netherlands, contributing to sustainable urban development.
Beyond residential heating and cooling, this strategic expansion serves a crucial secondary objective. Samsung’s acquired FlaektGroup is a key supplier of sophisticated cooling solutions for hyperscale AI data center projects, including the monumental Stargate initiative. Concurrently, LG has forged an agreement to provide essential cooling systems for Microsoft data centers. The fundamental engineering principles behind residential heat pumps, encompassing compressors and heat exchangers, are directly transferable to data center cooling equipment, thus offering both Samsung and LG a robust dual revenue stream and expanded market opportunities from their strategic acquisitions.
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