Waste Heat Recovery Market

Market Overview

The global waste heat recovery market size was valued at USD 56.8 billion in 2022 and is projected to reach USD 107.9 billion by 2031, registering a CAGR of 7.4% during the forecast period (2023-2031).

Waste heat recovery (WHR) is capturing and transforming heat produced as a byproduct of various industrial operations into useful energy. Industries, power plants, and other facilities frequently emit considerable amounts of heat into the environment as waste, much of which goes unused. Waste heat recovery systems absorb this heat and transform it into electricity, steam, or hot water, increasing energy efficiency and lowering greenhouse gas emissions.

The market share is expected to rise due to strict regulations to reduce carbon footprints and growing concerns about greenhouse gas emissions. Developing countries, notably those in Asia and Africa, are undergoing fast industrialization and rising energy demand. Waste heat recovery systems present an appealing possibility to utilize waste heat while meeting these regions' energy demands. As a result, the waste heat recovery market in these nations is predicted to increase significantly.

Market Dynamics

Market Drivers

Government Incentives and Regulation

Governments around the world are enacting various incentives and laws to encourage the use of waste heat recovery systems. These policies are intended to hasten the transition to cleaner, more energy-efficient practices, reduce greenhouse gas emissions, and accomplish environmental sustainability goals. The European Union's Energy Efficiency Directive mandates member states undertake energy-efficiency measures like waste heat recovery. The directive establishes specific energy-saving goals for each country and encourages businesses to invest in waste heat recovery systems to meet these goals. Several countries provide financial incentives, tax credits, and grants to aid in the installation and execution of waste heat recovery projects. For example, the Internal Revenue Service (IRS) of the United States offers a tax credit of 10% of the capital cost for qualifying waste heat recovery equipment. Similarly, in India, through the Waste Heat Recovery Program, the Ministry of New and Renewable Energy (MNRE) provides financial help to enterprises for waste heat recovery installations.

Market Restraints

High Initial Investment

Heat exchangers, steam turbines, generators, and other equipment are part of the waste heat recovery system. Depending on the size and complexity of the installation, the initial capital investment for such a system might range from several hundred thousand to several million dollars. The waste heat recovery system installation and commissioning require a trained workforce and specialized knowledge. This project phase incurs significant costs. According to the US Department of Energy research, the capital cost for waste heat recovery systems in industrial applications can range between USD 500 and USD 4,500 per kilowatt (kW) of waste heat recovered. Capital expenditures are typically higher for larger-scale projects or those involving sophisticated industrial processes.

Market Opportunities

Technological Advancement

The Organic Rankine Cycle is a novel waste heat recovery method that generates electricity from low to medium-temperature waste heat sources using organic fluids with low boiling temperatures. ORC systems are becoming more common in industries where traditional steam-based Rankine cycles are impractical due to lower waste heat temperatures. ORC technology can efficiently work at waste heat temperatures as low as 80°C, making it useful for recovering heat from various industrial processes. The growing emphasis on sustainable energy solutions and the need to minimize greenhouse gas emissions encourage the industry to investigate and invest in sophisticated waste heat recovery technologies such as ORC. Waste heat recovery systems are projected to improve energy efficiency and contribute to a greener, more sustainable future as technology evolves and improves.

Regional Analysis

The global waste heat recovery market is analyzed in North America, Europe, Asia-Pacific, the Middle East and Africa, and Latin America.

North America Dominates the Global Market

North America holds a sizeable global market share and is expected to boost at a CAGR of 6.9% during the forecast period, owing to increased demand for on-site power generation and increased initiatives to deploy energy-efficient technology. Strict government rules on harmful gas emissions will force existing industrial plants to retrofit, increasing demand for our products. The Environmental Protection Agency (EPA) has adopted the Clean Air Act and Clean Power Plan in the United States, encouraging industry to reduce greenhouse gas emissions and boost energy efficiency. These regulations encourage the use of waste heat recovery systems. Ongoing materials science and engineering research has resulted in the development of more efficient waste heat recovery systems, such as thermoelectric generators and organic Rankine cycles. The National Renewable Energy Laboratory (NREL) in the United States and equivalent research institutions in Canada are actively interested in advancing waste heat recovery systems.

Asia-Pacific is predicted to rise at a substantial CAGR of 7.7% throughout the forecast period. Asia-Pacific received the most FDI in the manufacturing sector. Rapid industrialization and a growing understanding of the need for sustainable energy in the expanding economies of India and China should promote market expansion in the region. According to the Asian Development Bank, the Asia-Pacific industrial sector is expected to increase by 6.2% annually between 2016 and 2030. According to the UNCTAD 2018 World Investment Report, Asia Pacific is the largest FDI receiver in the manufacturing sector. High industrialization and the growing importance of sustainable energy in emerging economies such as India and China are expected to drive market expansion over the next seven years. Several Asia-Pacific countries have established environmental legislation to minimize greenhouse gas emissions and promote sustainable development. For example, China's 13th Five-Year Plan targets reducing energy intensity and boosting energy conservation and emissions reduction. Thereby contributing to the global waste heat recovery market growth.

Europe will overtake Asia as the second-largest regional market in the future. Growing knowledge of the WHR system and the European Union's waste-to-energy project are significant drivers of market growth in the region. According to the European Environment Agency (EEA), the European Union has pledged to lower greenhouse gas emissions by at least 40% by 2030 compared to 1990 levels as part of its climate ambitions. The EU's Renewable Energy Directive establishes binding targets for EU countries to increase the amount of renewable energy in the overall energy mix to 32% by 2030. The Energy Efficiency Directive mandates EU countries to enhance their energy efficiency by 32.5% by 2030. Because of rigorous emission rules to reduce greenhouse gas emissions, Germany is the largest contributor to Europe's WHRS market. Germany's National Action Plan on Energy Efficiency (NAPE) distributes funds to encourage energy efficiency projects, including waste heat recovery programs. Moreover, The European Commission's Horizon 2020 initiative funds research and innovation projects on energy efficiency and sustainable technology. Some potential causes that will improve product demand in the coming years are technological innovation, reduced costs, and a favorable political environment. 

Latin America's oil and natural gas industry is predicted to grow reasonably in the next years due to Venezuela's oil reserves, which will likely contribute to the region's waste heat recovery systems market growth. With its continuously developing oil, natural gas, and chemical industries, the Middle East and Africa region is predicted to give enormous potential for the growth of waste heat recovery systems shortly.

Segmental Analysis

The global waste heat recovery market is segmented based on technique, application, industries, and region.

The technique is further segmented into Heat Exchangers, Heat Wheels, Recuperators, Regenerators, Boilers, and Others.

Heat Exchangers are the highest contributor to the market.

Heat exchangers transfer heat from one fluid to another without mixing them. They are widely employed in various industries to recover waste heat from hot exhaust fumes and transfer it to another medium for usage. Heat exchangers are classified into three types: shell-and-tube, plate, and finned-tube, each suited to a unique use.

Heat wheels are energy recovery devices found in HVAC systems. They are also known as rotational heat exchangers or enthalpy wheels. They alternate between two air streams, one carrying exhaust air and the other carrying fresh air. The wheel absorbs heat from the warm exhaust air and transfers it to the cool incoming air, eliminating the need for extra heating or cooling.

The segment can be bifurcated by application into Temperature Control, Pre-Heating Systems, Electricity Generation, and Others.

Electricity Generation holds the major share of the market.

Electricity generation is one of the most important applications of waste heat recovery. Waste heat from industrial operations is absorbed and turned into electrical power in combined heat and power (CHP) or cogeneration plants using various technologies such as steam turbines, organic Rankine cycle systems, or thermoelectric generators. This method increases total energy efficiency while decreasing greenhouse gas emissions.

Pre-heating systems use waste heat to warm up fluids or materials before they enter a process. This is a typical application in industries such as chemical processing, where waste heat from specific production stages is used to pre-heat raw materials or feedstock for future processing, lowering the energy necessary to reach the desired temperatures.

Based on Industries, the market is classified into Chemical and petrochemical, oil and gas, energy and power, food and beverages, and others.

Chemical and petrochemical topped the market.

Numerous high-temperature processes in the chemical and petrochemical industries create significant amounts of waste heat. In this industry, waste heat recovery systems are critical for maximizing energy use, boosting process efficiency, and lowering greenhouse gas emissions. Waste heat can be recovered and used to pre-heat feedstock, generate energy, or power other processes inside the facility.

The oil and gas industry contributes significantly to waste heat creation through refining, compression, and heat-intensive operations. In this industry, waste heat recovery can be used for various purposes, such as heating fluids for enhanced oil recovery, pre-heating natural gas, or generating power for on-site consumption.

Recent Developments

• August 2023- Siemens introduced a new line monitoring relay generation. The SIRIUS 3UG5 line monitoring relays combine tried-and-true technology with innovative new features and applications.
• July 2023- The City of Yokohama, Tokyo Gas Co., Ltd. (Tokyo Gas), Mitsubishi Heavy Industries, Ltd. (MHI), and MHI Group company MHI Environmental and Chemical Engineering Co., Ltd. (MHIEC) will launch a demonstration experiment of a CO2 capture and utilization (CCU) process (Note1) in which CO2 is separated and captured from the flue gas of a municipal waste-to-energy plant and transported to local methanation (Note2) demonstration facility operated by Tokyo Gas.