Industrial Decarbonisation of Heat: Why It Matters for Your Business and How to Achieve It
Imagine a world where the products and materials we use every day are made without harming the environment. A world where the industrial sector, which accounts for more than a quarter of global greenhouse gas emissions, is carbon-neutral. A world where heating systems in factories and plants use clean and renewable energy sources instead of fossil fuels. This is the vision of industrial decarbonisation of heat, a process and technologies that can help us fight climate change and create a sustainable future.
Industrial decarbonisation of heat is the process and technologies of reducing greenhouse gas emissions produced by heating systems in various industrial sectors. It is a crucial component of achieving net-zero emissions and meeting the Paris Agreement goals of limiting global warming to well below 2°C, preferably to 1.5°C, compared to pre-industrial levels.
At the heart of this transition is the adoption of clean industrial heat. Historically, industrial operations have relied on the combustion of coal, oil, and natural gas to generate the steam, hot water, and direct high-temperature thermal energy required for manufacturing. Transitioning to clean industrial heat means replacing these fossil-fueled systems with low-carbon alternatives—such as industrial heat pumps, green hydrogen, biomass, and direct electrification—without sacrificing process reliability or product quality.
However, the industrial decarbonisation of heat is not an easy task. It involves overcoming technical and economic challenges, such as changing the design of furnaces, switching to alternative fuels or feedstocks, retrofitting existing facilities, and investing in new processes or technologies. It also requires collaboration and coordination among various stakeholders, such as industrial companies, policymakers, researchers, and environmentalists.
In this blog post, we will explore the benefits, challenges, and opportunities of industrial decarbonisation of heat. We will also discuss the five key pathways to reduce industrial emissions:
- Energy efficiency improvements
- Electrification of heat
- Use of hydrogen
- Biomass as feedstock or fuel
- Carbon capture, utilisation, and storage (CCUS)
What is Clean Industrial Heat?
To understand how to decarbonise industrial processes, we must first categorise how heat is used. Unlike residential heating, which operates almost exclusively at low temperatures, industrial processes require thermal energy across a vast spectrum. Clean industrial heat solutions must therefore be tailored to specific temperature tiers:
- Low-Temperature Heat (<150°C): Used widely in the food and beverage, paper, and textile industries for drying, washing, and pasteurisation. This tier is highly suited for direct electrification via industrial heat pumps and solar thermal systems.
- Medium-Temperature Heat (150°C to 400°C): Utilised in chemical manufacturing, oil refining, and plastic processing. Technologies such as electrode boilers, high-temperature heat pumps, and biomass steam generators are key to delivering clean heat in this range.
- High-Temperature Heat (>400°C): Essential for heavy industries like steel, cement, glass, and ceramics (often exceeding 1,000°C). Decarbonising this tier is the most challenging and relies on green hydrogen, electric arc furnaces, and CCUS.
The flowchart below illustrates how industrial operations can select the appropriate clean industrial heat pathway based on their specific process temperature requirements:
The benefits of industrial decarbonisation of heat
Industrial decarbonisation of heat can bring significant benefits to the environment and the economy. By reducing greenhouse gas emissions, improving air quality, and mitigating climate change impacts, transitioning to clean industrial heat can help create a cleaner and healthier planet for future generations. By creating new jobs, spurring innovation, and increasing competitiveness, it can also help boost economic growth and social value.
The environmental benefits
One of the main benefits of industrial decarbonisation of heat is that it can help lower greenhouse gas emissions, especially carbon dioxide (CO₂), which is the main contributor to global warming. According to a report by McKinsey, ammonia, cement, ethylene, and steel companies can reduce their CO₂ emissions to almost zero with energy-efficiency improvements, the electric production of heat, the use of hydrogen and biomass as feedstock or fuel, and carbon capture. These four sectors account for half of the industry’s CO₂ emissions and 15% of global CO₂ emissions. By decarbonising these sectors, the world can avoid 2.5 gigatons of CO₂ emissions per year by 2050, which is equivalent to the annual emissions of India.
Another benefit of industrial decarbonisation of heat is that it can help improve air quality and reduce health risks. By switching from fossil fuels to clean and renewable energy sources for heating systems, industrial decarbonisation of heat can help reduce local pollution and emissions of harmful substances such as nitrogen oxides (NOₓ), sulfur oxides (SOₓ), particulate matter (PM), and volatile organic compounds (VOCs). These pollutants can cause respiratory diseases, cardiovascular problems, cancer, and premature death. According to a study by the International Energy Agency (IEA), improving energy efficiency and electrification of heat in the industry could avoid 1.4 million premature deaths per year by 2050 due to improved air quality.
A third benefit of industrial decarbonisation of heat is that it can help reduce climate change impacts and enhance natural carbon sinks. By lowering greenhouse gas emissions, industrial decarbonisation of heat can help limit global warming and its consequences such as sea level rise, extreme weather events, biodiversity loss, water scarcity, food insecurity, and social unrest. By using biomass or waste as fuel or feedstock, industrial decarbonisation of heat can also help increase the carbon storage capacity of forests, soils, and oceans. According to a report by McKinsey, using biomass as feedstock or fuel in the industry could sequester up to 1 gigaton of CO₂ per year by 2050.
The economic benefits
Another set of benefits of industrial decarbonisation of heat is related to the economic opportunities and advantages it can create for industrial companies and society at large. By investing in new technologies and processes, creating new markets and products, and enhancing energy security and resilience, clean industrial heat can help create new jobs, spur innovation, and increase competitiveness.
One of the economic benefits of industrial decarbonisation of heat is that it can help create new jobs. By accelerating the deployment of renewable energy sources, electrification of heat, hydrogen production and distribution, carbon capture and storage (CCS), and other decarbonisation technologies, industrial decarbonisation of heat can generate demand for skilled labour in various sectors such as manufacturing, construction, engineering, maintenance, and services.
Industrial decarbonisation of heat also presents economic advantages, such as fostering innovation and enhancing competitive edge. By adopting new technologies and processes that improve energy efficiency, reduce carbon emissions, and enhance product quality or performance, industrial companies can gain a competitive edge in the global market and attract more customers and investors. By developing new markets and products that use low-carbon or carbon-neutral materials or fuels, industrial companies can also diversify their revenue streams and increase their profitability. According to a report by McKinsey, decarbonising the industrial sector could unlock $10 trillion in investment opportunities by 2050.
A third economic benefit of industrial decarbonisation of heat is that it can help enhance energy security and resilience. By reducing the dependence on fossil fuels for heating systems, industrial decarbonisation of heat can help lower the exposure to price volatility, supply disruptions, geopolitical risks, and environmental regulations associated with fossil fuels. By increasing the use of renewable energy sources such as solar, wind, hydroelectricity, geothermal and biomass, industrial decarbonisation of heat can also help increase the diversity, reliability, and flexibility of the energy supply for the industrial sector. By improving the energy efficiency and performance of heating systems, industrial decarbonisation of heat can also help reduce the energy demand and costs for the industrial sector. According to a study by the IEA, improving energy efficiency and electrification of heat in the industry could save 13 exajoules of energy per year by 2050, which is equivalent to the annual energy consumption of Japan.
The challenges of industrial decarbonisation of heat
Industrial decarbonisation of heat is not an easy task. It involves overcoming technical and economic challenges that are specific to the industrial sector and its heating systems. These challenges pose barriers to the adoption and deployment of clean industrial heat technologies.
The technical challenges
One of the main technical challenges of industrial decarbonisation of heat is related to the feedstock emissions that result from the chemical reactions involved in the production of some industrial commodities, such as ammonia, cement, ethylene, and steel. These emissions account for 45% of CO₂ emissions from these sectors and cannot be abated by a change in fuels, but only by changes to processes. For example, producing ammonia requires breaking down natural gas into hydrogen and CO₂, which is then released into the atmosphere. Producing cement requires heating limestone to produce lime and CO₂, which is also vented. To reduce these feedstock emissions, alternative processes or technologies are needed, such as using hydrogen or biomass as feedstock, or capturing and storing or utilising CO₂ emissions.
Another technical challenge of industrial decarbonisation of heat is related to the high-temperature heat that is required for many industrial processes, such as melting iron ore, cracking ethane, or calcining limestone. These processes require temperatures ranging from 700°C to more than 1,600°C, which are difficult to achieve without combustion. Most of these processes use fossil fuels, such as coal, natural gas, or oil, to generate high-temperature heat, which results in significant CO₂ emissions. Reducing these emissions by switching to alternative fuels, such as zero-carbon electricity, would be difficult because this would require significant changes to the design of furnaces and boilers.
A third technical challenge of industrial decarbonisation of heat is related to the process integration that characterises many industrial systems. Industrial processes are highly integrated, meaning that any change to one part of a process must be accompanied by changes to other parts of that process. For example, changing the fuel or feedstock for one process may affect the quality or performance of the final product or require adjustments to other processes downstream or upstream. This makes it challenging to introduce new technologies or processes for clean industrial heat without affecting the overall efficiency and profitability of the system.
A fourth technical challenge of industrial decarbonisation of heat is related to the facility lifetime which limits the turnover rate of existing equipment and infrastructure. Industrial facilities have long lifetimes, typically exceeding 50 years with regular maintenance. Changing processes at existing sites requires costly rebuilds or retrofits that may not be economically viable or technically feasible. This makes it difficult to phase out old and inefficient equipment and replace it with new and low-carbon technologies for industrial decarbonisation of heat.
The economic challenges
One of the main economic challenges of industrial decarbonisation of heat is related to the high costs and low returns that discourage investments in low-carbon or carbon-neutral technologies and processes for industrial heat production. Decarbonising the industrial sector will cost between $11 trillion and $21 trillion through 2050, which is equivalent to 0.5% to 1% of global GDP per year. These costs include capital expenditures for new equipment and infrastructure, operating expenditures for fuel and feedstock, and transaction costs for policy implementation and market development. These costs may outweigh the benefits for many industrial companies, especially in sectors with low-profit margins, high capital intensity, long payback periods, and low carbon prices.
Another economic challenge of industrial decarbonisation of heat is related to the competitive pressures and trade exposure that constrain the ability of industrial companies to pass on the costs of decarbonisation to their customers or suppliers. Many industrial sectors face intense competition from domestic and foreign rivals that may not have the same decarbonisation targets or policies. This creates a risk of carbon leakage, meaning that reducing emissions in one region may lead to an increase in emissions in another region due to shifts in production or consumption patterns. To avoid this risk, industrial companies may need to align their decarbonisation strategies with their value chains and markets or seek policy support such as border carbon adjustments or sectoral agreements.
The opportunities for industrial decarbonisation of heat
Industrial decarbonisation of heat can open up new possibilities for innovation and collaboration across different sectors and regions. By adopting technologies and processes that can capture, store, reuse or avoid carbon emissions from heating systems, such as CCUS, hydrogen, electrification and waste heat utilisation, industrial decarbonisation of heat can enable a sustainable transformation of the industrial sector and support its transition to net-zero emissions. By implementing effective policy measures that can overcome barriers and create incentives for these technologies and processes, industrial decarbonisation of heat can also enhance cooperation and coordination among various stakeholders, such as industrial companies, policymakers, researchers, and environmentalists.
The technological opportunities
Industrial decarbonisation of heat is a key challenge and opportunity for achieving net-zero emissions in the industrial sector, which accounts for about one-quarter of global CO₂ emissions. To generate clean industrial heat, which has historically been dominated by fossil fuel combustion, a range of technologies and processes can be used to capture, store, reuse or avoid carbon emissions. Here are four technological opportunities:
1. CCUS Technologies
CCUS technologies can capture and store or reuse carbon emissions from industrial heating systems, which can account for a large share of the sector’s emissions. CCUS is particularly important to eliminate process emissions that result from chemical or physical reactions and that would not be addressed through fuel switching. CCUS can also enable the production of low-carbon hydrogen from natural gas or biomass, which can be used as a fuel for industrial heat generation. However, CCUS technologies are still costly and require further development and deployment, especially for applications such as cement, steel and chemicals production.
2. Hydrogen and Electrification
Hydrogen and electrification can reduce the carbon intensity of industrial heat generation by switching from fossil fuel combustion to low-carbon alternatives.
For high-temperature applications, hydrogen can be produced from renewable electricity (green hydrogen) or from fossil fuels with CCUS (blue hydrogen) and combusted to achieve the necessary heat.
For low- and medium-temperature applications, electrification via industrial heat pumps is highly efficient. The performance of these heat pumps is determined by their Carnot Coefficient of Performance (COPHP), which relates the absolute source and sink temperatures:
COPHP=Tsink−TsourceTsinkWhere:
- COPHP is the theoretical maximum Coefficient of Performance of the heat pump.
- Tsink is the absolute delivery temperature (the heat sink) in Kelvin (K).
- Tsource is the absolute waste or ambient heat temperature (the heat source) in Kelvin (K).
In practice, industrial heat pumps achieve 50% to 70% of this Carnot limit. This formula demonstrates that the smaller the difference between the source temperature (Tsource) and the target delivery temperature (Tsink), the higher the operating efficiency of the system, making waste heat upgrading incredibly cost-effective.
3. Energy and Resource Efficiency
Energy and resource efficiency measures can reduce energy consumption and costs for businesses by improving the performance of industrial processes and heating systems. Energy efficiency measures can include improving insulation, heat recovery, process integration and control systems. Resource efficiency measures can include reducing material use, increasing recycling and reuse, and switching to lower-carbon materials. However, energy and resource efficiency measures may face barriers such as lack of awareness, information or finance, as well as technical or regulatory constraints.
4. Low-Temperature Industrial Waste Heat Utilisation
Low-temperature industrial waste heat utilisation can reduce the use of primary fuels and increase the overall efficiency of the energy system by using excess heat from industrial processes for other purposes, such as district heating or cooling, power generation or desalination. Low-temperature industrial waste heat (up to ≈250 °C) accounts for about 60% of the total waste heat potential in the UK. However, low-temperature industrial waste heat utilisation faces challenges such as high costs, lack of demand, technical difficulties and regulatory barriers.
The policy opportunities
Another opportunity for industrial decarbonisation of heat is related to the implementation and coordination of effective policy measures that can create incentives, reduce risks, and enable collaboration for the development and deployment of low-carbon or carbon-neutral technologies and processes for industrial heat production. There are four types of policy measures that can support industrial decarbonisation of heat: carbon pricing or standards, subsidies or tax credits, financing or infrastructure development, and public-private partnerships or sectoral agreements.
Carbon pricing or standards can help create incentives for industrial companies to reduce their emissions by imposing a cost on carbon emissions or setting a limit on emission levels. For example, implementing a carbon tax or cap-and-trade system can help internalise the social cost of carbon emissions and encourage investments in low-carbon technologies. Implementing a carbon border adjustment mechanism can help prevent carbon leakage and level the playing field for domestic producers.
Subsidies or tax credits can help reduce risks for industrial companies to invest in low-carbon technologies by lowering their upfront costs or increasing their returns. For example, providing grants or loans for research and development (R&D) or demonstration projects can help overcome technological barriers and uncertainties. Providing production tax credits or investment tax credits for low-carbon products or equipment can help improve their competitiveness and profitability.
Financing or infrastructure development can help enable industrial companies to access capital and resources for low-carbon technologies by facilitating funding sources or providing public goods. For example, creating green banks or bonds can help mobilise private financing for low-carbon projects. Providing public infrastructure such as renewable power plants, hydrogen pipelines, or CO₂ storage sites can help lower costs and increase the availability of low-carbon inputs.
Public-private partnerships or sectoral agreements can help foster collaboration among various stakeholders for low-carbon technologies by creating platforms for dialogue, coordination, and cooperation. For example, creating industry associations or councils can help share best practices, set voluntary targets, and monitor progress. Creating cross-sectoral alliances or coalitions can help align interests, leverage synergies, and scale up solutions.
Conclusion
In this blog post, we have discussed how to achieve net-zero emissions in the industrial sector by transitioning to clean industrial heat. We have explored the benefits, challenges, and opportunities of industrial decarbonisation of heat, and discussed the five key pathways to reduce industrial emissions: energy efficiency improvements, electrification of heat, use of hydrogen, biomass as feedstock or fuel, and carbon capture, utilisation, and storage (CCUS).
Industrial decarbonisation of heat is a process and technology for reducing greenhouse gas emissions produced by heating systems in various industrial sectors. It is a crucial component of achieving net-zero emissions and meeting the Paris Agreement goals of limiting global warming to well below 2°C, preferably to 1.5°C, compared to pre-industrial levels.
Transitioning to clean industrial heat can bring significant benefits to the environment and the economy. By reducing greenhouse gas emissions, improving air quality, and mitigating climate change impacts, it can help create a cleaner and healthier planet for future generations. By creating new jobs, spurring innovation, and increasing competitiveness, it can also help boost economic growth and social value.
However, this transition also faces technical and economic challenges that pose barriers to the adoption and deployment of low-carbon or carbon-neutral technologies and processes for industrial heat production. These challenges include feedstock emissions, high-temperature heat requirements, process integration, facility lifetimes, high capital costs, low returns, competitive pressures, and trade exposure.
To overcome these challenges and seize the opportunities for industrial decarbonisation, there is a clear need for innovation and collaboration in the industrial sector and beyond. By developing and deploying new technologies and processes that can reduce or eliminate carbon emissions from heating systems—such as high-efficiency industrial heat pumps, green hydrogen, sustainable biomass, and CCUS—we can transform the industrial sector and move it towards a low-carbon future. By supporting and enabling these technologies with effective policy measures, such as carbon pricing, subsidies, green financing, and public-private partnerships, we can foster cooperation and coordination among industrial companies, policymakers, researchers, and environmentalists alike.
Achieving clean industrial heat is not an easy task. It requires vision, leadership commitment, and immediate action from all parties involved. But it is a necessary and highly rewarding endeavour that will safeguard industrial competitiveness while securing a sustainable, low-carbon future for generations to come.
If you want to learn more about the Industrial Decarbonisation of Heat and its opportunities and impact, you can contact us at info@enertherm-engineering.com. You can also follow us on LinkedIn for the latest updates and news.
