At a time of widespread disruption and uncertainty, decarbonization remains essential to companies. While decarbonization is critical for mitigating climate change and meeting rapidly growing disclosure requirements, it also provides strategic benefits for companies. These include cutting operational expenditure, opening new market opportunities, increasing capital access, reducing cost of debt, bolstering energy security, and minimizing stranded asset risks. These and other benefits increase companies’ long-term enterprise value, stability, and resilience, ensuring they are resilient in the longer term.  

Despite the benefits of decarbonization, challenges remain. Corporate decarbonization goals are often expressed as cross-company objectives to reach net zero or reduce emissions by a certain date. While broad ambitions are welcome, they can make it harder for operational and business unit teams to deduce what actions they should take to contribute without more specific targets, site level actions and capital allocation.  

That said, companies can overcome these challenges. In this three-blog series, we outline how companies can swiftly cut emissions and achieve cost savings across three distinct operational segments, while positioning themselves to realize long-term strategic benefits. We cover the industrial heat operational segment in this blog. We will cover the Fleet and Buildings operational segments in the second and third blogs, respectively.  

Leveraging industrial heat to deliver emissions reductions and cost savings 

Industrial heat is one of the largest sources of greenhouse gas (GHG) emissions globally, accounting for nearly 20 percent of global energy consumption. In the industrial sector, process heat accounts for approximately two-thirds of energy demand – and over 85 percent of that heat still relies on fossil fuels, despite the often availability of clean, cost-competitive alternatives. 

A growing set of solutions is emerging to significantly reduce fossil fuel use and cut heat-related GHG emissions. Electrification technologies like industrial heat pumps, thermal energy storage, and e-boilers are rapidly advancing, combined with renewable electricity generation. Solar heat for industrial processes is also quickly emerging and is expected to grow significantly by 2030, including thermal storage solutions. For some harder-to-electrify and costly processes such as cement kilns, bioenergy offers a renewable heat option. These technologies are already delivering commercial results, enabling companies to cut emissions and reduce operational expenses in parallel.  

In Europe and other markets, supportive policy and financial frameworks are accelerating the pace of adoption of more efficient, low carbon heating technologies. Additionally, business models based on third-party investments under ‘heat-as-a-service’ arrangements can play a key role in driving adoption, as they overcome high upfront costs, one of the main barriers to deployment. As these technologies mature and capital costs fall, proactive businesses will be well-positioned to capture both emissions reductions and long-term cost savings, while increasing resilience in the face of changing regulatory and energy landscapes. 

Progress often starts small: identifying a single facility, temperature range, or process well-suited for transition to act as a pilot, before scaling across multiple sites to unlock near-term gains and cross portfolio benefits. 

Call to action 

To get started on industrial heat, consider the following practical steps and read on to see how real-world companies are putting them into action.   

  • Pilot industrial heat solutions: Start small to unlock scalable emissions reductions and cost savings. 
  • Explore partnerships for industrial heat: Partnering with external organizations can help overcome upfront investment barriers and expediate deployment.  
  • Focus on integration: Integrate industrial heat into your existing processes and systems to maximize efficiencies and ROI.  

Case Study 

The situation:  

  • Pelagia, a Norwegian producer of fish products, faced rising energy costs due to its reliance on oil-fired boilers for steam generation at their site in Måløy. The local grid had limited capacity and could not support an electric boiler, making decarbonization challenging.  
  • To address this capacity constraint, Pelagia partnered with Aneo, a developer and producer of high-temperature heat pumps, to develop a potential solution using a steam-generating heat pump system.  

The solution:  

  • The site had access to waste heat from the fish drying process, which enabled the design of a high efficiency system based on this excess energy. Using this waste heat, the heat pump system can produce steam with a coefficient of performance (COP) ranging from 3.5 to 7, supplying 4.5 MWth to Pelagia’s production process. 
  • However, the plant’s variable production requirements posed a challenge in maintaining a stable steam output that matched process needs. Aneo and Pelagia collaborated to design a customized system and retrofitted existing process layouts and infrastructure to maintain a stable steam output to cope with this variability. 
  • The project also received financial support from ENOVA, a Norwegian state enterprise under the Ministry of Climate and Environment, helping reduce upfront investment costs. 

The impact: 

  • The installed system achieved both strong environmental and economic performance, helping Pelagia cut its greenhouse gas emissions by approximately 4,000 tonnes of CO₂ annually. The system also delivered a solid return on investment.  

Lessons learned:  

  • Rather than aiming for a direct, like-for-like replacement of the existing steam system, companies should focus on process integration and system adaptation. By tailoring the solution and optimizing heat integration, teams can achieve high efficiencies and align steam output with production needs.  
  • Customized solutions—designed around the specific constraints and opportunities of a site—can make decarbonization measures both technically and economically viable for your company, even in scenarios initially deemed unfeasible. 
  • By deploying onsite systems like heat pumps that utilize waste heat or other local energy outputs, companies can reduce their dependence on external energy sources and exposure to volatile fossil fuel prices.  

Conclusion 

Amidst ongoing economic uncertainty, leveraging decarbonization to bolster operational and financial performance continues to be fundamental to companies. Whether in the short- or long-term, reducing emissions helps firms weather change and unlock lower costs and competitive advantage.  

By applying lessons learned from the above case study, companies with industrial heat drive operations can turn decarbonization from ambition to actuality, reaping benefits along the way. 

Key takeaways 

  • Waste heat recovery can help unlock decarbonization at grid-constrained sites where electrification is unfeasible.  
  • Customization is key to meeting the unique demands of different sites and ensuring reliable, low-carbon energy generation.  
  • Innovative approaches to technological challenges can deliver emissions reductions and strong investment returns.