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1. In order to promote the use of renewable energy in the heating and cooling sector, each Member State shall increase the share of renewable energy in that sector by at least 0,8 percentage points as an annual average calculated for the period 2021 to 2025 and by at least 1,1 percentage points as an annual average calculated for the period 2026 to 2030, starting from the share of renewable energy in the heating and cooling sector in 2020, expressed in terms of national share of gross final consumption of energy and calculated in accordance with the methodology set out in Article 7. Member States may count waste heat and cold towards the average annual increases referred to in the first subparagraph, up to a limit of 0,4 percentage points. If they decide to do so, the average annual increase shall increase by half of the waste heat and cold percentage points counted to an upper limit of 1,0 percentage points for the period 2021 to 2025 and of 1,3 percentage points for the period 2026 to 2030.

Member States shall inform the Commission of their intention to count waste heat and cold and the estimated amount in their integrated national energy and climate plans submitted pursuant to Articles 3 and 14 of Regulation (EU) 2018/1999. In addition to the minimum percentage points annual increases referred to in the first subparagraph of this paragraph, each Member State shall endeavour to increase the share of renewable energy in its heating and cooling sector by the additional indicative percentage points set out in Annex Ia to this Directive. Member States may count renewable electricity used for heating and cooling towards the annual average increase set out in the first subparagraph, up to a limit of 0,4 percentage points, provided that the efficiency of the heat and cold generator unit is higher than 100 %. If they decide to do so, the average annual increase shall increase by half of that renewable electricity expressed in percentage points to an upper limit of 1,0 percentage points for the period 2021 to 2025 and of 1,3 percentage points for the period 2026 to 2030.

Member States shall inform the Commission of their intention to count renewable electricity used in heating and cooling from heat and cold generators the efficiency of which is higher than 100 % towards the annual increase set out in first subparagraph of this paragraph. Member States shall include the estimated renewable electricity capacities of heat and cold generator units the efficiency of which is higher than 100 % in their integrated national energy and climate plans submitted pursuant to Articles 3 and 14 of Regulation (EU) 2018/1999. Member States shall include the amount of renewable electricity used in heating and cooling from heat and cold generator units the efficiency of which is higher than 100 % in their integrated national energy and climate progress reports submitted pursuant to Article 17 of that Regulation.

1a. For the calculation of the share of renewable electricity used in heating and cooling for the purposes of paragraph 1, Member States shall use the average share of renewable electricity supplied in their territory in the two previous years.

1b. Member States shall carry out an assessment of their potential of energy from renewable sources and of the use of waste heat and cold in the heating and cooling sector including, where appropriate, an analysis of areas suitable for their deployment at low ecological risk and of the potential for small-scale household projects. That assessment shall consider available and economically feasible technology for industrial and domestic uses in order to set out milestones and measures to increase the use of renewable energy in heating and cooling and, where appropriate, the use of waste heat and cold through district heating and cooling with a view to establishing a long-term national strategy to reduce greenhouse gas emissions and air pollution originating from heating and cooling. That assessment shall be in accordance with the energy efficiency first principle and part of the integrated national energy and climate plans submitted pursuant to Articles 3 and 14 of Regulation (EU) 2018/1999, and shall accompany the comprehensive heating and cooling assessment required by Article 14(1) of Directive 2012/27/EU.

2. For the purposes of paragraph 1 of this Article, when calculating its share of renewable energy in the heating and cooling sector and its average annual increase in accordance with that paragraph, including the additional indicative increase set out in Annex Ia, each Member State: ◄ ————— (b) where its share of renewable energy in the heating and cooling sector is above 60 %, may count any such share as fulfilling the average annual increase; and (c) where its share of renewable energy in the heating and cooling sector is above 50 % and up to 60 %, may count any such share as fulfilling half of the average annual increase. When deciding which measures to adopt for the purposes of deploying energy from renewable sources in the heating and cooling sector, Member States may take into account cost-effectiveness reflecting structural barriers arising from the high share of natural gas or cooling, or from a dispersed settlement structure with low population density.

Where those measures would result in a lower average annual increase than that referred to in paragraph 1 of this Article, Member States shall make it public, for instance by the means of their integrated national energy and climate progress reports pursuant to Article 20 of Regulation (EU) 2018/1999, and provide the Commission with reasons, including of choice of measures as referred to the second subparagraph of this paragraph. Member States shall in particular provide information to the owners or tenants of buildings and SMEs on cost-effective measures, and financial instruments, to improve the use of renewable energy in the heating and cooling systems. Member States shall provide the information through accessible and transparent advisory tools.

3. On the basis of objective and non-discriminatory criteria, Member States may establish and make public a list of measures and may designate and make public the implementing entities, such as fuel suppliers, public or professional bodies, which are to contribute to the average annual increase referred to in paragraph 1.

4. To achieve the average annual increase referred to in paragraph 1, first subparagraph, Member States shall endeavour to implement at least two of the following measures:

(a) physical incorporation of renewable energy or waste heat and cold in the energy sources and fuels supplied for heating and cooling;

(b) the installation of highly efficient renewable heating and cooling systems in buildings, the connection of buildings to efficient district heating and cooling systems or the use of renewable energy or waste heat and cold in industrial heating and cooling processes;

(c) measures covered by tradable certificates proving compliance with the obligation laid down in paragraph 1, first subparagraph, through support to installation measures under point (b) of this paragraph, carried out by another economic operator such as an independent renewable energy technology installer or an energy service company providing renewable energy installation services;

(d) capacity building for national, regional and local authorities to map local renewable heating and cooling potential and plan, implement and advise on renewable energy projects and infrastructures;

(e) the creation of risk mitigation frameworks to reduce the cost of capital for renewable heat and cooling and waste heat and cold projects, allowing for, inter alia, the bundling of smaller projects as well as linking such projects more holistically with other energy efficiency and building renovation measures;

(f) the promotion of renewables heating and cooling purchase agreements for corporate and collective small consumers;

(g) planned replacement schemes of fossil heating sources, heating systems that are not compatible with renewable sources or fossil phase-out schemes with milestones;

(h) requirements at local and regional level concerning renewable heat planning, encompassing cooling;

(i) the promotion of the production of biogas and its injection into the gas grid, instead of its use for electricity production;

(j) measures promoting the integration of thermal energy storage technology in heating and cooling systems;

(k) the promotion of renewable based district heating and cooling networks, in particular by renewable energy communities, including through regulatory measures, financing arrangements and support;

(l) other policy measures, with an equivalent effect, including fiscal measures, support schemes or other financial incentives that contribute to the installation of renewable heating and cooling equipment and the development of energy networks supplying renewable energy for heating and cooling in buildings and industry.

When adopting and implementing those measures, Member States shall ensure their accessibility to all consumers, in particular those in low-income or vulnerable households, who would not otherwise possess sufficient up-front capital to benefit.

5. Member States may use the structures established under the national energy savings obligations set out in Article 7 of Directive 2012/27/EU to implement and monitor the measures referred to in paragraph 3 of this Article.

6. Where entities are designated under paragraph 3, Member States shall ensure that the contribution by those designated entities is measurable and verifiable and that the designated entities report annually on:

(a) the total amount of energy supplied for heating and cooling;

(b) the total amount of renewable energy supplied for heating and cooling;

(c) the amount of waste heat and cold supplied for heating and cooling;

(d) the share of renewable energy and waste heat and cold in the total amount of energy supplied for heating and cooling; and (e) the type of renewable energy source.