We, EU HVAC industry AGs, represent the interests of more than 4,900 SME firms active in installation, commissioning and maintenance of heating, AC, and ventilation devices, are under threat from upcoming EC regulations (expected full compliance by 2015) to phase out such devices that are non-energy efficient, noisy, non-aesthetic and contribute to CO2 generation. These regulations are Directive 2004/8/EC (amending Directive 92/42/EEC) and Directive 2002/49/EC. The European Commission is EN ISO 13790 standard for AC and heating systems and for ‘Calculation of Energy Use for Space Heating' in buildings. EC regulations call for phasing out AC, ventilation and heating systems that do not meet ecological requirements, complying with the EPBD and EU phase-out of HCFC by 2015. Our industry has to conform with Directives 2002/95/EC and 2002/91/EC on aesthetic nature of the buildings while the majority of our technologies are split heat pump devices which require a large external heat exchanger on the ground or in the air. Our members therefore require a small modular heat pump technology which can be simply retrofitted into any room of a domestic home or building. We must research and develop the next generation of modular, air to air source heat pumps intended for single-room applications. The retrofit technology will provide local control of heating, cooling and ventilation with a wireless central monitoring station. New scalable heat pump should be able to achieve a superior 4.7 COP rating, a very low external noise level of 35db and a low price point as well as optimal life-cycle cost regime. This project will also cover the requirement for new ventilation systems, which are not based on exploiting exhaust air. Our proposed heat pump will provide ventilation and improve buildings energy efficiency, by utilizing and not exhausting hot air from a room. The novel heat pump may be positioned as a retrofit into ventilation canals for centralised heating and cooling systems.