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Factories can replace some fossil-fuel heat with industrial heat pumps, electric boilers, and thermal storage, but electrification is not a universal drop-in fix. The strongest near-term opportunities are lower-temperature heat and steam; the emissions and cost benefits depend on the process, local electricity supply and prices, grid access, and how new equipment fits into the plant.
Why industrial heat is a major decarbonization opportunity
Industrial heat supplies processes such as drying, cooking, washing, evaporation, and steam generation. The International Energy Agency (IEA) says broad industrial sectors that rely primarily on low-temperature heat and steam account for roughly 70% of global industrial energy consumption. In those sectors, direct energy-related CO₂ emissions were nearly 3 Gt in 2023—about half of direct industrial emissions for the sectors described in the IEA’s report. These figures show the scale of the opportunity, not how much emissions any one plant can avoid. IEA, Renewables for Industry
The nearer-term fit is often in food, textiles, paper, chemicals, and other manufacturing that needs lower-temperature heat or steam. The IEA says commercially available heat pumps, electric boilers, and resistance heaters can meet much of the heat demand in these subsectors. In a separate outlook, the IEA projects electricity’s share of global industrial heat consumption to grow from 4% in 2024 to 12% in 2030. That is a forecast, not a measured 2030 outcome. IEA, Renewables 2025: Renewable heat
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Heat is not the only source of industrial emissions: some processes also produce emissions through chemical reactions or other operations. A UK government study of cement, glass, paper, olefins, refining, and food and drink found that most emissions in the processes it examined came from fossil-fuel combustion for heat. That finding applies to the processes covered by the study, not every industrial source of emissions. UK Department for Energy Security and Net Zero, 2024
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Which technologies can supply a factory’s heat?
The right equipment depends first on required temperature and steam pressure, then on heat sources, operating patterns, and the cost and availability of electricity. The IEA’s 2025 report describes established industrial heat pumps for heat up to 150°C and electric boilers for steam up to 350°C and around 70 bar. A separate IEA commentary discusses heat pumps serving needs up to 200°C in a broader framing; it is not the same as the report’s stated limit for established systems. A plant should check the specific application and equipment capability rather than treat either number as a guarantee for every installation. IEA, Executive summary IEA commentary, 9 December 2025
| Option | How it supplies heat | Best-fit considerations | Trade-offs and limits |
|---|---|---|---|
| Industrial heat pump | Uses electricity to raise heat from a source—often recovered waste heat—to a useful process temperature. | Can suit lower-temperature heat and steam where a suitable heat source is available; often uses less electricity per unit of heat than direct electric heating. | Higher equipment and installation costs than electric boilers can complicate the business case; process integration and achievable output temperature matter. The IEA describes established systems up to 150°C in its 2025 report. |
| Electric boiler | Converts electricity directly into heat or steam. | Can meet steam needs beyond typical heat-pump temperatures, provide backup, or operate in a flexible hybrid system. The IEA cites steam up to 350°C and around 70 bar. | Uses more electricity than a heat pump for the same heat output, so operating cost can be especially sensitive to electricity prices. |
| Thermal storage | Stores heat for later use; systems can use sensible, latent, or thermochemical storage. Materials described by the IEA include sand, cement, and bricks. | Can shift heat production toward hours when electricity is cheaper or renewable supply is more available, while meeting demand later. | Storage is not automatically economical: sizing, charging equipment, tariffs, and the plant’s operating profile determine its value. |
| Resistance heating | Uses electricity directly to produce heat. | Can serve some process-heating requirements where the equipment and temperature range fit. | Like an electric boiler, it does not upgrade ambient or waste heat, so it generally requires more electricity per unit of delivered heat than a heat pump. |
Heat pumps: efficient where heat sources and temperatures fit
A heat pump moves and upgrades heat rather than making all of it from electricity. That can give it a higher coefficient of performance (COP)—more units of heat delivered per unit of electricity consumed—than a resistance heater or electric boiler. Recoverable heat from a process, cooling system, or other source can improve the fit, but the required delivery temperature and integration with existing equipment must also work. The IEA notes that heat pumps can be economically attractive compared with existing gas boilers in some EU member states; its modeled range was 41–74 EUR/MWh across the countries examined. That range is a specific comparison, not a universal quote for a new installation. IEA, Executive summary
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Electric boilers: direct steam at higher temperatures
Electric boilers may fit a plant that needs steam at temperatures or pressures beyond the practical range of a heat pump, or that wants a controllable backup source. Their direct conversion of electricity to heat is simpler to compare than a heat pump’s heat-upgrading performance, but lower efficiency can mean higher running costs. The IEA found electric boilers remained more expensive in many of its modeled cases, while market conditions in Northern Europe offered opportunities. Those results vary with local power and fuel prices and should not be applied to a site without its own cost analysis. IEA, Executive summary
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Storage and hybrid systems: shift when heat is made
A storage system can let a facility charge when electricity is less expensive or more readily available and draw on stored heat when production needs it. Pairing an electric boiler with storage, or retaining a fuel boiler as backup, may help manage price swings and grid constraints. But storage adds equipment and must match the plant’s actual demand cycle. In the IEA’s modeled configurations, hybridisation did not improve the levelized cost of heat for heat pumps, so flexibility should not be assumed to make every heat-pump project cheaper. IEA commentary, 9 December 2025
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What operating projects show—and what they do not
Industrial electrification is already deployed in different forms. Examples reported by the IEA include a 5 MW process-steam heat-pump installation at a fishmeal manufacturer in Norway and 56 MWh of electrified heat and thermal storage at a corn processor in Hungary. The IEA also describes a brewery in Spain with a 30 MW solar-thermal system, plus thermal-storage units of 100 MWh in the United States and 33 MWh in Thailand. These examples involve different technologies; they are evidence of deployment, not a like-for-like set of all-electric heat-pump projects or proof that the same economics apply elsewhere. IEA commentary, 9 December 2025
How to tell whether electrification fits a particular plant
A credible comparison considers the whole heat system, not just the purchase price of a boiler or heat pump. A site assessment should map heat sources and sinks, regulatory issues, and design and implementation options. The Sustainable Energy Authority of Ireland’s guide recommends this integrated approach. SEAI, Electrification of Industrial Heat Guide
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- Reduce avoidable heat demand. Assess waste-heat recovery, insulation, process controls, and plant-level thermal optimisation first. The IEA identifies these as comparatively low-cost measures that can reduce fuel use and shrink the capacity and investment required for later electrification. The U.S. Department of Energy’s Industrial Technologies Office reports that process heating accounted for 51% of onsite manufacturing energy use in 2018, and that about one-third of process-heating energy ultimately becomes waste heat. IEA, Executive summary U.S. Department of Energy, Finding Efficiencies in Process Heat
- Map process requirements. Record each heat demand’s temperature, steam pressure, flow, schedule, and tolerance for interruption. Match those requirements to equipment capability rather than choosing by technology label alone.
- Identify usable heat sources. For heat pumps, determine whether a reliable source of recoverable heat is available and whether its temperature and location suit the process. Estimate the COP under the expected operating conditions.
- Model delivered-heat costs. Include installed equipment, electricity and fuel prices, tariffs, efficiency, hours of operation, storage, applicable carbon costs, and any flexibility revenue that is genuinely available. The IEA’s cost illustrations use 2024 price inputs and exclude uncertain grid-connection costs, so their modeled results are not universal project prices. IEA commentary, 9 December 2025
- Check grid capacity and timing. Confirm whether the site can secure the required connection and power capacity, what it will cost, and whether delays affect project timing. A technically suitable system may not be feasible on the desired schedule if grid access is limited.
- Compare emissions using the electricity actually supplied. Estimate emissions for the local or contracted electricity mix and the fuel and process being displaced. Replacing direct fossil-fuel combustion can reduce onsite emissions, but increased electric heat is not automatically zero-carbon heat; the generation mix determines its emissions impact.
- Plan the retrofit. Check plant layout, process integration, downtime, operating resilience, controls, maintenance, and workforce skills. Consider whether storage, backup heat, or staged installation is needed to keep production reliable.
In an IEA example based on German 2024 prices, an electric-boiler-and-thermal-storage hybrid could more than halve average electricity costs for heating relative to a standalone electric boiler. A modeled arrangement combining an electric boiler, an existing gas boiler, and storage reached an average purchased electricity cost of EUR 12/MWh. That figure is an electricity-purchase cost, not the levelized cost of heat, and depends on the modeled assumptions; it is not a forecast for other plants. IEA commentary, 9 December 2025
Why progress varies by region
Electricity prices, taxes, network charges, grid capacity, and access to project finance can change the same technology’s appeal from one location to another. The IEA identifies grid planning, electricity taxes and network charges, capital and operating-cost support, workforce training, and interoperable standards as policy priorities. Its 2025 analysis describes energy-price and grid constraints in the EU, substantial additional electricity demand in China despite coordinated policies, and capital, grid, and finance constraints in ASEAN industrial parks. A plant’s local tariff and grid connection therefore matter as much as broad technology potential. IEA, Executive summary
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For perspective, the IEA estimates that less energy-intensive industries use around 30% of global industrial energy, with about 75% of their heat demand below 200°C. That highlights a sizable addressable temperature range, but it does not mean every process in those industries can use the same equipment or be electrified at the same cost. IEA commentary, 9 December 2025
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