Belgium still has the highest electricity-to-gas price ratio in the EU

Heat pumps made headlines again this week because of a new analysis by Belgium’s energy regulator CREG. The conclusion? Despite subsidies, heat pumps are rarely more attractive than traditional gas boilers, at least not financially.

The timing couldn’t be better: it’s been exactly one year since we last updated our electricity-to-gas price ratio chart, a key metric in understanding the economics of heat pumps. So, we decided to revisit the numbers and what they say about the future of residential heating in Belgium.

Let’s start with the basics. Our homes account for about 18% of Belgium’s total CO₂ emissions. That’s one of the highest per-capita rates in Europe. It’s not hard to see why: we live in relatively large, older houses spread across a fragmented urban landscape. As a result, residential heat demand is high, and still 90% fossil-fueled. Heat pumps are often touted as one of the core solutions. They run on electricity and can deliver up to four times more heat than the energy they consume. Unlike gas boilers, they don’t emit CO₂ directly and align well with a decarbonized power system. But despite rising interest, large-scale adoption in Belgium remains stuck in second gear. Why? Because the economics still don’t work. Even with subsidies, heat pumps have a higher upfront cost. For the investment to pay off over time, the lifetime cost of heating must be lower than sticking with gas. Given their efficiency, heat pumps don’t need electricity to be cheaper than gas. Still, the ratio does need to stay below a certain threshold: about 1.6 to 2.4 times, depending on how well-insulated the home is.

Today? Belgium’s ratio is 3.9. For the fifth time in six years, we top the European leaderboard, albeit not in a good way. The only recent exception was 2022, when gas prices spiked after Russia invaded Ukraine.

This story isn’t new for us, as we have tracked it in newsletters before. Unfortunately, the core problem hasn’t changed: electricity is still taxed more heavily than gas. That’s not just an economic oddity – it’s a policy failure. It punishes electrification, delays investment, and risks derailing a cornerstone technology of the energy transition. Now for the good news: this is fixable. The upcoming ETS 2 scheme will put a carbon price on fossil heating fuels, potentially closing the price gap. Policymakers have also floated the idea of shifting taxes away from electricity and onto fossil fuels, something that should move from talk to action. And while not captured in our analysis (or that of the CREG), the presence of rooftop solar can dramatically improve the heat pump’s case for homeowners.

In short, this week’s headlines were right: heat pumps are still a tough sell today. But they don’t have to be tomorrow. Fixing the tax imbalance would be a good place to start. At Ortelius, we help clients decode the complex interplay of technology, economics, and policy in Europe’s energy transition. If you're navigating investment decisions or evaluating low-carbon solutions, we’ll help you cut through the noise with evidence, not ideology.