Industrial heating is a major climate challenge. Heat constitutes over two-thirds of all energy demand in the industrial sector globally, yet only a small fraction of this demand is met by renewable energy sources, with fossil fuels being the dominant source of energy. In Europe, natural gas is the dominant fuel used in the industrial sector. Decarbonizing the industrial sector and reducing reliance on imported fossil fuels will require shifting heat production towards cleaner sources, including electrification technologies powered by low- or zero-carbon electricity.

This two-part report series on Electrifying European Industry provides a comprehensive analysis of the potential for electrification of industrial processes and steam generation in Europe. The first report, Part 1: Electrification of Industrial Processes, focuses on the electrification of heat production in key industrial processes, while Part 2: Electric Boilers and Steam-Generating Heat Pumps investigates electrification technologies that can replace conventional steam boilers.

Both reports cover the EU27 and five countries in Europe: France, Italy, Poland, Spain, and Türkiye, in 2030, 2040, and 2050.

Part 1 report assesses electrification potential across 17 key industrial subsectors: secondary aluminum, steel production, steel reheating, steel foundries, automotive, container glass, cement, brick, pulp and paper, ethanol, ammonia, recycled plastic, milk powder, wet corn milling, soybean oil, processed meat production, and cheese production.

Two electrification scenarios are outlined: a conservative Base Case and an ambitious Advanced Electrification scenario. These scenarios analyze the impact of electrifying industrial processes on energy demand, CO2 emissions, and electricity costs across countries up to 2050. Because the emissions factor and price of electricity drive the impacts of electrification, we also developed two electricity supply scenarios: The Baseline Grid Plus Renewable Electricity (RE) Procurement scenario and the Ambitious Grid Plus RE Procurement scenario.

By 2050, the potential for CO2 emissions reduction through electrification of industrial process is significant, with up to 117 million tons of CO2 mitigated across the EU27. Country-specific and sector-specific results for energy saving, CO2 emissions, and cost are shown in the reports.

Figure 1: CO2 emissions reduction potential from electrification of industrial processes by country by 2050, Advanced electrification scenario 

Part 2 report shifts the focus to the electrification of industrial steam generation, particularly through the use of electric boilers and industrial heat pumps. It conducts the analysis for each industry subsector separately in each country/region.

Steam is critical for low- to medium-temperature industrial processes, and steam production represents a substantial portion of industrial energy use. Electric boilers offer an efficient alternative to fossil-fuel-based boilers, converting up to 99% of electrical energy to thermal energy. Although energy costs for electric boilers are higher than conventional boilers in the short term, their energy costs are expected to become competitive by 2040, with significant carbon emissions reduction potential by 2050 across EU27 and five countries studied.

Part 2 report also explores the use of industrial heat pumps as an alternative to electric boilers. The analysis shows that heat pumps can deliver steeper near-term emissions reductions compared to electric boilers, especially by 2030. By 2050, the adoption of electric boilers and heat pumps could together reduce CO2 emissions by about 250 million tons annually across the EU27, with Italy having the greatest potential for emissions reductions from heat pumps.

The Levelized cost of heat (LCOH) for steam production for both conventional and electric technologies are shown for EU27 and each of the countries studied.

Electrifying industrial processes will also lead to a substantial rise in electricity demand which is quantified by technology, subsector, and country in these reports.

Figure 2: Summary of results for electric boilers and heat pumps across the EU27, Advanced electrification by 2050. 

Note: Electric boilers results show the impact from electrifying the entire industrial boilers in EU27, while heat pump results show the impact from adopting heat pump in a handful of industrial subsectors (mostly food and beverage and paper sectors).

Electrifying industrial heating to achieve energy, emissions, and cost reductions requires a comprehensive strategy, including a focus on lowering the cost of renewable electricity for industrial consumers. Expanding renewable electricity capacity and improving grid integration in the EU is critical to meet the increased electricity demand. The European Commission, national governments, and other stakeholders must implement strategic financial, technical, and policy interventions to support this transition, including setting clear electrification targets, providing financial incentives, and developing infrastructure.

Key actions include improving data on industrial heating needs, establishing ambitious electrification targets, and introducing zero-emission standards for industrial heat. Financial incentives and infrastructure investments are essential to reduce costs and support grid enhancements. Additionally, workforce training programs are needed to build the necessary skills for managing electrified systems. Strategic partnerships with industry, academia, and innovation in heat pump technologies will enable Europe to decarbonize its industrial sectors and reduce its reliance on imported fossil fuels. Each of these actions and recommendations is discussed in detail in these two reports.

Download the full reports and country/region summaries from the links above.

Stay up to date with our work on electrifying the industrial sector through the Industrial Electrification Center.

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