Europe's thermal insulation market hits €20.6 billion — and it all comes down to one thing: regulation

The European thermal insulation market reaches €20.6 billion in 2026 and is pointing toward recovery — but with clear winners and losers depending on each country’s energy policy. The great energy efficiency thermometer in Europe has two very different faces: while Turkey records growth of +16.2%in value in the thermal insulation sector, Italy falls -10.9% following the end of its Superbonus programme. The data reveals that regulation and public incentives are, today, the primary driver — or brake — of the market.

This is the central finding of the IC Market Forecast – Thermal Insulation 2026, published by Interconnection Consulting. The report confirms that the sector has moved past its post-pandemic hangover and is poised for a steadier phase ahead, with market value expected to grow by 2.3% in 2026. This growth will be driven primarily by a renewed approach to energy efficiency in the residential sector, which is projected to account for 65% of total market demand. Mineral wool is forecast to lead on the product side with a 40.8% market share, while prices are expected to hold firm compared to previous years, even as high interest rates and weaker construction activity continue to create headwinds.

The regional divergence is stark. Turkey leads European growth (16.2%) thanks to stricter insulation requirements and rigorous enforcement of energy efficiency regulations across both new builds and renovations. Bosnia follows with +10.0%, driven by rising energy and electricity costs alongside EU-backed subsidy programmes, while Portugal records +6.2% growth, benefiting from its national recovery plan and increasing demand tied to energy certification requirements in the property market.

At the other end of the spectrum, Italy suffers the sharpest blow. The scaling back of the Superbonus — a fiscal incentive programme that had transformed the renovation sector — triggered a -10.9% contraction. The Nordic countries (-7.9%) and Slovenia (-6.6%) also retreated, weighed down by weakening residential construction and broader economic headwinds. The pattern across all underperforming markets is consistent: where policy incentives disappear or stall, so does demand.

“Markets that successfully align regulation, energy costs, and renovation incentives will outperform the European average over the next growth cycle,” says Robert Lukac, author of the study.

Looking ahead, the outlook is cautiously optimistic. The European thermal insulation market is projected to reach €23.860 billion by 2029, sustained by renovation demand and long-term decarbonization targets. The shift toward high-performance and sustainable insulation materials is expected to shape both market dynamics and competitive positioning in the years ahead.

The competitive landscape is shaped by major international players including Austrotherm, Bauder, Baumit, Ceresit, Etex, Kingspan, Knauf, Owens Corning, Rockwool, Ruukki, Saint-Gobain, Sto, Wacker and Xella, all playing a central role in driving innovation and defining the future of European insulation.