In order to achieve the target of 20 per cent energy savings by 2020, the EU needs to augment its efforts on energy efficiency measures especially in the residential sector, which contributes to 27 per cent of total EU energy consumption. Micro–CHP is the next generation solution with high efficiency, and is a replacement option for millions of boilers installed in Europe that operate at lower efficiencies. When compared to a condensing boiler, an engine based micro–CHP unit could save nearly 1.7 tonnes CO2 annually for a typical family home.