Buildings are responsible for 40% of the energy consumption in the EU, and a reduction of the energy consumption of buildings is considered necessary by the EU in order to reach its energy saving goals. One of the actions taken is the adoption of the Energy Performance of Buildings Directive (EPBD) that is implemented in the member states’ national Energy Performance (EP) regulations. Since innovation can contribute to better energy performance of buildings, it is important that EP regulations do not become a barrier to innovation. The EU wants to encourage innovation, but there is a lack of systematic evaluation on how EP regulations impact innovation. The purpose of this thesis is to contribute to a better understanding of the impact of EP regulations on innovation in the HVAC sector. A more specific aim is to compare the EP regulations in two EU member states and discuss the expected impact of the regulations on innovation based on five specific characteristics. The selection of the compared member states France and Sweden is justified by on-the-job observations indicating differences between their respective EP regulations. The theoretical framework for this thesis shows that the impact of regulation on innovation is largely dependent on how the regulation is designed, with specific regulation design characteristics being relevant for the impact on innovation. Five characteristics, namely: stringency, flexibility, certainty, transparency and enforcement, were included in the analysis model presented in this thesis and used to analyze the qualitative data. Data was collected through semi-structured interviews with professionals in France and Sweden and a desk study. The results suggest that the EP requirements of French regulation are stringent, which according to the theoretical framework can be expected to drive innovation. The French approach with using a complex regulatory calculation method for calculating a building’s EP is considered to imply less flexibility and freedom for innovation. The complexity of the calculation method can lead to less transparency, which according to the theoretical framework can have a negative impact on innovation. France has already presented future EP requirements. The increased certainty can be expected to increase firms’ innovative ambition. If enforcement is weak, the regulation is not to be expected to drive innovation. Few new buildings are checked for compliance in France but there are penalties for non-compliance. The Swedish EP regulation is considered less stringent, but the Swedish approach with compliance based on measured energy use of a finished building implies high flexibility and transparency. In Sweden the future requirement levels have not yet been presented which can create uncertainty. There is a risk that compliance falls between the jurisdictions of national authorities that define the requirements and local authorities are responsible for enforcing them. The French EP regulation, with high stringency, certainty and enforcement but less transparency and flexibility than the Swedish, is expected to have a stronger impact on HVAC innovation. The French regulation can be a driver to HVAC innovation that is adapted to the regulation, but risks becoming a barrier to innovations that are not included in the regulatory EP calculation method. There seems to be both advantages and disadvantages with the Swedish EP regulation from an innovation perspective, depending on which characteristics are considered. Based on the results of this thesis one cannot state that the Swedish EP regulation drives or hinders innovation in the HVAC sector. ; Validerat; 20150520 (global_studentproject_submitter)