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Europe District Heating Market Size By - Source (CHP, Geothermal, Solar, Heat Only Boilers), By Application (Residential, Commercial {College/University, Office Buildings, Government/Military}, Industrial {Chemical, Refinery, Paper}) & Forecast, 2023 – 2032

  • Report ID: GMI6753
  • Published Date: Sep 2023
  • Report Format: PDF

Europe District Heating Industry Analysis

Europe District Heating Market size was valued at USD 82.9 billion in 2022 and is projected to grow at a CAGR of 3.4% from 2023 to 2032.Favorable government policies and programs to achieve net zero emission coupled with national targets for renewable energy integration will energize the industry landscape. Growing concern toward decarbonizing the energy systems along with the integration of renewable energy sources including geothermal, solar, and thermal energy will positively influence the business outlook.

Europe District Heating Market

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Increasing adoption of sensible heat across commercial facilities in conjunction with a growing emphasis on utilizing clean energy sources will foster the Europe district heating market size. Ongoing replacement and refurbishment of conventional power plants with cost effective energy generation facilities will propel the industry scenario. Increased investments in infrastructure aligned with the rising demand for sustainable technology systems will drive industry growth. Moreover, the increasing need for eco-friendly temperature control in residential, industrial, and commercial areas will boost the demand for district heating solutions across the region.


The Europe district heating market is expected to experience growth driven by ongoing investments in the development of efficient climate solutions and the adoption of advanced heating systems. Factors including the high energy costs and low-cost waste streams will play a significant role in driving the adoption of this technology in the coming years. Additionally, government policies related to heat and electricity supply, supported by well-implemented policy interventions, will contribute to the expansion of the industry. The effective use of marketing and promotional strategies by key industry players will further boost the adoption of these systems.

COVID-19 Impact

The COVID-19 pandemic had a widespread impact on various industrial operations, including infrastructure development and investment projects. Governments and local authorities implemented the shutdowns and temporary closures of offices and industries in response to the pandemic. This impact was felt on a global scale, affecting 215 nations, and resulting in the enforcement of stringent lockdown measures. Nevertheless, the gradual easing of government regulations and the resumption of activities, especially in sectors including manufacturing and infrastructure projects, will play a substantial role in shaping future growth prospects.

Europe District Heating Industry Trends

Europe district heating market is experiencing an increasing focus on enhancing energy efficiency to mitigate carbon emissions and optimize resource utilization. The growing enforcement of regulatory measures pertaining to the adoption of efficient technologies comprising of heat pump and waste heat recovery along with the increasing uptake of sustainable energy solutions will further contribute to the expansion of the district heating market in Europe. In addition, changing climatic conditions driven by rising surface temperatures will support the industry's growth. Paradigm shift towards the use of renewable energy sources and the adoption of smart and digital solutions in the heating sector will further bolster the market's size.

Europe District Heating Source Segmentation

Europe District Heating Market Size, By Source, 2021 - 2032 (USD Billion)

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The market for Combined Heat Power (CHP) is slated to exceed USD 76 billion by 2032. The growing adoption of renewable energy production systems coupled with integration of advanced technologies will contribute to the increased demand for CHP. The rising need for energy-efficient direct current (DC) systems to support ongoing construction activities will stimulate the industry's growth. Furthermore, Regulatory bodies are continuously implementing policies and providing incentives and tax rebates to promote the adoption and utilization of CHP systems will augment the Europe district heating market size.

Europe District Heating Application Segmentation

Russia District Heating Market Share, By Application, (2022)

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The Europe’s residential district heating market is poised to register a CAGR of 3.5% through 2032, driven by increased construction activities focused on energy-efficient residential buildings. Stringent greenhouse gas (GHG) regulations and the growing adoption of renewable energy sources for power generation will further stimulate market prospects. Moreover, the ongoing integration of heat pumps in residential properties aligned with the increasing shift toward decentralized energy systems will contribute to a positive business outlook.

The commercial district heating market size surpass USD 31 billion by 2032, driven by the rising adoption of sustainable building practices and codes in emerging economies, where there is a growing emphasis on constructing green buildings. However, increased investments in the real estate industry and the expanding service sector will further contribute to the industry's positive outlook. Growing demand for effective and efficient heating solutions in commercial buildings including offices, retail spaces, and hospitals, which will play a significant role in shaping the Europe district heating market.

Europe District Heating Country Outlook

Germany District Heating Market Size, 2021- 2032 (USD Billion)

The district heating market in Germany will account for over USD 19 billion by 2032. The country will witness substantial growth on account of implementation of climate action plans supported by governments, which are aimed at reducing carbon emissions and promoting sustainable practices. The ongoing support from government policies for cleaner and more efficient energy solutions will drive the demand for district energy systems in the country. Additionally, rapid urbanization and increased investments in residential developments are having a positive impact on the district heating market in Germany.

Europe District Heating Industry Leaders

The key industry players operating in Europe district heating market are Fortum, ALFA LAVAL, Goteborg Energi, E.ON UK plc, Vattenfall AB, ENGIE, STEAG GmbH, Euroheat & Power, Statkraft AS, RWE, Danfoss, Ramboll Group A/S, Ørsted A/S, LOGSTOR Denmark Holding ApS, KELAG Energy & Heat GmbH, Hafslund AS, Veolia, SUEZ, Kamstrup, and Uniper SE.


Europe District Heating Industry News

  • In March 2022, Vattenfall inaugurated Carpe Fortum, biofuel heat plant located in Uppsala, Sweden. With the introduction of this plant, carbon dioxide emissions are expected to be reduced by approximately 200,000 tonnes annually, compared to previous usage of peat and other conventional fuels. This significant reduction will effectively halve the climate footprint for the approximately 170,000 residents of Uppsala connected to Vattenfall's district heating grid within the city. In addition, the implementation of the biofuel heat plant demonstrates Vattenfall's commitment to sustainability and marks a significant step towards achieving a more environmentally friendly district heating system in Uppsala.
  • In December 2022, Göteborg Energi and Svenska kraftnät have recently reached an agreement concerning the Rya combined heat and power plant. Under this agreement, Svenska kraftnät will be granted access to a maximum of 250 MW of electricity capacity in western Sweden during the upcoming winter season. This procurement allowed Svenska kraftnät to utilize the capabilities of the Ryaverket facility for counter trading between electricity areas and grid flow adjustments. Furthermore, the energy supply in Sweden is currently facing vulnerabilities, and this agreement will play a crucial role in enhancing the stability of the electricity grid.

This Europe district heating market research report includes in-depth coverage of the industry with estimates & forecast in terms of “PJ” & “USD Billion” from 2019 to 2032, for the following segments:

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By Source

  • District Heating
    • CHP
    • Geothermal
    • Solar
    • Heat Only Boilers
    • Others

By Application

  • Residential
  • Commercial
    • College/University
    • Office Buildings
    • Government/Military
    • Others
  • Industrial
    • Chemical
    • Refinery
    • Paper
    • Others

The above information has been provided for the following countries:

  • Europe
    • Germany
    • Poland
    • Russia
    • Sweden
    • Finland
    • Italy
    • Denmark
    • UK
    • Slovakia
    • Austria
    • Czech Republic
    • France


Authors: Ankit Gupta, Abhishek Chopra

Frequently Asked Questions (FAQ) :

The market size of Europe district heating was reached USD 82.9 billion in 2022 and is projected to witness 3.4% from 2023 to 2032, due to higher usage for space heating and domestic hot water in residential, commercial, and industrial buildings.

Europe district heating market size from the residential application segment is expected to observe over 3.5% from 2023 to 2032, driven by increased construction activities focused on energy-efficient residential buildings.

Germany district heating market size may exceed USD 19 billion by 2032 owing to the higher implementation of climate action plans supported by governments.

Some of the major district heating firms in Europe are Fortum, ALFA LAVAL, Goteborg Energi, E.ON UK plc, Vattenfall AB, ENGIE, STEAG GmbH, Euroheat & Power, Statkraft AS, RWE, Danfoss, Ramboll Group A/S, Ørsted A/S, LOGSTOR Denmark Holding ApS, and KELAG Energy & Heat GmbH.

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Premium Report Details

  • Base Year: 2022
  • Companies covered: 20
  • Tables & Figures: 488
  • Countries covered: 12
  • Pages: 200
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