Industrial Heat Pump Market Size & Share 2026-2035

Industrial Heat Pump Market Size

The industrial heat pump market was estimated at USD 1.4 billion in 2025. The market is expected to grow from USD 1.5 billion in 2026 to USD 2.5 billion in 2035, at a CAGR of 5.9% according to a recent study by Global Market Insights Inc.

• Significant efforts to reduce carbon emissions from various industries’ operations, along with an increasing focus to utilize waste heat from industries will complement business landscape. Industrial heat pumps are a very efficient means of converting waste heat into useful energy, which reduces the use of fossil fuels. Shifting inclination towards energy-efficient systems to achieve the goal of sustainability, enhance the industry outlook by increasing efficiency and reducing energy costs.

• For instance, in February 2025, the European Commission launched the Clean Industrial Deal as a growth opportunity which aims to reduce energy costs, enhance business conditions, and generate jobs. It is centered on supporting energy-intensive industries, the clean-tech sector, and the pursuit of circularity, cutting waste, prolonging the life of materials, and avoiding dependence on external sources for raw materials.

• Rising heating & cooling demand across industrial operations along with growing inclination toward replacing traditional technologies from industrial processes will positively influence the industry outlook. Strong emphasis toward energy-efficiency coupled with favorable regulatory norms by respective authorities will positively influence the business dynamics. Furthermore, introduction of stringent mandates to reduce carbon emission levels and energy-saving systems will influence industry dynamics.

• For instance, in March 2025, the European Commission’s two major initiatives include the Clean Industrial Deal and the Industrial Decarbonization Accelerator Act, aimed at developing strong markets for clean tech and accelerating their growth. The initiative centers on the use of industrial heat pumps. The heat pumps are made in Europe and are aimed at enhancing the operation of industries efficiently and reducing emissions, thus aligning with the climate goals of the EU. The Energy Affordability Action Plan is supporting the transition through reduced costs for electricity. The JRC argues that the use of heat pumps would enhance the efficiency of industries, reduce emissions, and lower the reliance on fossil fuel imports.

• Stringent regulations that promote energy saving, coupled with the growing trend among consumers to adopt renewable energy-based solutions, will further stimulate the product penetration rates. Furthermore, the rapid pace of development in emerging markets as well as the expansion of the infrastructure will positively influence business outlook.

• For instance, in June 2025, the IEA launched an updated version of the Energy Efficiency Policy Toolkit to be used during the 2025 Global Conference to be held in Brussels. This toolkit acts as a roadmap that provides strategic guidance to policymakers to strengthen energy efficiency in all areas. There is also an interactive version of the toolkit that provides policymakers with the Policy Package for Energy Efficiency and a one-stop resource to expand and refine energy efficiency policies and programs.

• Europe is a leader in the industrial heat pump market, owing to robust initiatives to reduce carbon emissions and adopt energy-savings & efficient solutions. With various government initiatives pushing the economy towards clean energy sources, and with the continued growth and development of the current infrastructure changing the way the industry operates, there are various developments that are changing the way products are adopted and, in turn, affecting business opportunities.

• For example, in January 2026, Brussels was the venue for the launch of the HP4INDUSTRY initiative. The initiative is set to run over the next three years and is intended to drive the adoption of heat pumps that reduce fossil fuel and industrial emissions while keeping industries competitive. The initiative focuses on low- to medium-temperature solutions for industries like pulp and paper, chemicals, food processing, among others, progressing through various stages. These stages include mapping the thermal needs of industries, testing standardized heat pumps in industrial settings, and finally promoting the heat pumps through replication.

• Asia Pacific is fastest growing market in industrial heat pump market owing to strong industrial expansion, infrastructure upgrades, and varying climate conditions. The efforts of the regional authorities to introduce the use of energy-efficient technology into the growing demand for heating and cooling have accelerated the adoption of high-tech heat pumps.

• For instance, in April 2025, the National Development and Reform Commission of China launched a strategic plan to accelerate heat pumps, to enhance energy efficiency of the sector while promoting a low-carbon future for the country. The plan aims to achieve a 20% improvement in the energy efficiency of the key products and technologies by the year 2030 while also breaking through high-temperature technologies. The plan also focuses on the replacement of coal-based technologies with heat pumps while also utilizing the waste heat from industries including food processing, petrochemicals, and textiles.

Industrial Heat Pump Market Trends

• The industrial heat pump market is anticipated to grow significantly owing to the imposition of strict energy-efficiency standards, the adoption of cutting-edge technology, and the growing need to protect the environment. A favorable regulatory environment for the use of energy-efficient technologies, along with the imposition of energy-efficiency standards by the government, is encouraging industries to adopt efficient technologies.

• For example, the EU launched the Heat Pump Accelerator Platform in January 2025. This is a broad initiative to accelerate the deployment of heat pumps in buildings, industries, and district heating. The Heat Pump Accelerator Platform brings together all the key stakeholders to share best practices. The objectives of the Heat Pump Accelerator Platform include the creation of a collaborative expert group to monitor national policies, tracking the coordination of energy and industrial policies, and removing barriers to the deployment of heat pumps through recommendations.

• Rising demand for space heating and cooling coupled with growing inclination toward utilizing waste industrial heat from different processes and district heating is shaping business dynamics. Policies that help and efforts to cut down on carbon emissions, coupled with the use of advanced technologies in heating and waste heat utilization, will accelerate adoption of low-carbon heating and further augmenting business landscape.

• For instance, in May 2024, the EU launched the Net-Zero Industry Act to support the development of local clean-tech industries. This law enables the member states to support net zero technologies through strategic projects that are accorded priority status and simplified procedures.

• Rising greenhouse gas emissions and a growing preference for low-carbon technologies are reshaping market dynamics. Significant efforts by the government and industry leaders to enhance R&D activities will help reduce emissions from industrial activities and ensure utilization of waste heat. Furthermore, advancements in high-capacity heat pumps for various industrial processes will boost industry dynamics by accelerating the usage of green heating technologies.

• For instance, in May 2025, TECNALIA is driving the high-temperature heat pump technology with a collaborative alliance of several companies to develop integrated solutions to recover and improve waste heat from industrial processes, reducing fossil fuels used and lowering greenhouse gases by a significant amount. Moreover, BEROA+ is advancing compression-type high-temperature, very high-temperature, and absorption-type solutions as well as exploring how to integrate these with steam production, thermal energy storage, and machine learning-based optimization to improve performance in industry.

Industrial Heat Pump Market Analysis

• On the basis of product, the industry is segregated into open cycle mechanical thermocompression-heat pump, closed cycle mechanical heat pump, closed cycle absorption heat pump, air source, water source, open cycle mechanical vapor compression heat pump, ground source. The air source segment dominated the industry accounting for around 38.7% market share in 2025 and is anticipated to grow at a CAGR of 5.8% from 2026 to 2035.

• Rising need for efficient space heating, cooling, and hot water systems in industrial establishments along with growing inclination to reduce carbon emissions is accelerating product demand. Improvements in the key components of heat pumps, such as the compressor for heat pumps and the refrigerant, enhance the performance of the system, thus encouraging the use of heat pumps.

• Moreover, the ease of installation, flexibility, and cost-effectiveness of heat pumps, coupled with their extensive application in various industries, are expected to influence the market for air source heat pumps.

• For instance, Johnson Controls launched the reversible YORK YAS R290 range of air-to-water heat pumps in February 2026. These products provide cool, heat, or both simultaneously while providing hot water in the range of 65 to 77°C while utilizing scroll compressors, axial fans, and have a propane charge of 6.1 to 8.1 kg. The heating capacity is 86.7 to 139 kW, while the range of cooling capacity is 66.3 to 110 kW while special climate-optimized versions have been designed for use in low-temperature industrial applications in Europe.

• Ground source heat pump segment witnessed a revenue of over USD 50.7 million in 2025 and is set to grow on account of rising deployment of these systems across various industrial applications for industrial heating & cooling together with rising focus on reducing carbon emissions. These systems are cost-effective and clean systems that utilize low-temperature geothermal liquids (80-100°C) to heat water for circulation in building radiators and convection heaters further augmenting product adoption.

• Water-source heat pump segment is set to grow at USD 162.3 million by 2035. Water source-based systems have gained significant growth driven by their ability to utilize constant water temperatures for efficient performance.

• Their suitability for use in industrial processes including breweries, chemical plants, and other industries when compared to traditional technologies will contribute to industry growth. The increasing need for energy efficiency, the expansion of waste heat recovery schemes, government initiatives to promote lower operating costs and carbon emissions in industrial processes, will accelerate product deployment.

• For instance, Johnson Controls introduced cutting-edge industrial heat pump technologies in June 2025, such as the YORK CYK centrifugal water-to-water heat pump. This technology can achieve up to four times the current technology’s efficiency and can reach temperatures of up to 82°C.

• The open cycle mechanical vapor compression is set to grow at a CAGR of 5.7% by 2035. Industries use open cycle mechanical vapor compression heat pumps because they can process steam more efficiently and integrating them with existing steam systems improves energy recovery and lowers infrastructure costs.

• Additionally, industries aiming to use low-carbon solutions and concentrate on decarbonizing high-temperature processes, which will speed up the deployment of these units and improve their sustainability and efficiency.

• Closed-cycle mechanical heat pumps market is set to grow over USD 392 million through 2035. These heat pumps utilize a sealed fluid system along with mechanical compression to attain high temperature lift, whereas the absorption variants use a two-component fluid along with thermodynamics to attain high temperature output.

• Rising demand for energy efficiency, decarbonization goals, supportive policies, and technological innovation are some of the key factors augmenting product deployment. Their adaptability and performance along with low energy losses and combined heating and cooling capability will accelerate product demand in various industrial applications seeking sustainable thermal solutions.

• Based on the capacity, the industrial heat pump market is segmented into up to 500 kW, 500 kW to 2 MW, 2 MW - 5 MW and > 5 MW. The up to 500 kW segment holds 46.8% market share in 2025 with a 5.7% CAGR from 2026 to 2035.

• Industries are relying on energy-efficient heating and cooling equipment to minimize costs and environmental impacts, which has accelerated demand for these products in industries such as manufacturing, chemical processing, food and beverage, pulp and paper, and others. The growing deployment of advanced heat pump technologies suitable to specific industrial needs is further reshaping the industry landscape.

• Rapid deployment of these technologies to meet the unique heating and cooling requirements of a wide range of industries will further augment the industry outlook. Supportive policies, sustainability goals, and the need for optimized thermal systems are some of the key factors fueling product deployment. Businesses are increasing capacity to meet the ever-increasing energy requirements of different industries, which is set to positively influence the business dynamics.

• For instance, Armstrong International started building a new 29,000 square foot industrial heat pump plant in Three Rivers, Michigan, in October 2024. This project will be made possible by a grant from the U.S. Department of Energy. The plant would produce high-capacity heat pumps for applications over 100 kW and temperatures above 180°F. The new facility is expected to help light industries cut their energy consumption by as much as 80%, and this is just another step for company to drive towards clean energy and sustainable development.

• The 500 kW to 2 MW capacity segment is anticipated to witness a CAGR of 5.9% from 2026 to 2035. Continuous and exponential increase in environmental concerns along with rising initiatives to curb greenhouse emissions has led to the adoption of high-capacity heat pumps in various application industries. Various key industry players are actively developing high-capacity heat pump variants through research & development, collaboration, and tie-ups with other vendors to minimize the use of fossil fuel for heating requirements.

• 2 MW–5 MW capacity segment was evaluated at over USD 256.4 million in 2025. These units are set to observe substantial growth, driven by rising demand for centralized heating in industrial establishments. These systems have been designed for high-performance environments such as paper processing plants, food and beverage concentration processes, chemical compression and thermoforming, and industrial drying and boiling. They help in reducing the carbon footprint, energy consumption, and costs of the processes which led large and capital-intensive industries viable for widespread adoption.

• For instance, in December 2024, Enerin installed its V6 HoegTemp heat pump at GE Healthcare’s Lindesnes location in Norway. The installation consists of a small container from which the heat pump pumps out about 400 kW of steam at about 140°C to help with the recovery of solvents in the production of contrast agents. The installation met all safety and performance criteria. GE is considering expanding the installation with a larger installation of 2 MW with Enova support, and Enerin is providing consultancy in the pre-engineering phase.

• Based on application, the industry is segmented into industrial and district heating. The industrial sector is anticipated to grow owing to the increase in investments in industrial infrastructures and the implementation of stringent regulations concerning emissions.

• These systems are commonly used in various industrial facilities for space and water heating, and for converting the temperatures of the waste heat streams into more useful temperatures. Additionally, the regulatory drive in the industrial sector concerning energy efficiency is expected to increase the adoption of heat pump systems.

• For instance, in October 2024, BASF has secured as much as USD 363.52 million in funding from Germany’s Federal Ministry for Economic Affairs and Climate Action to build the largest industrial-scale heat pump in the world at the company’s Ludwigshafen site. The construction of the plant is expected to commence in early 2025. The plant is expected to produce as much as 500,000 metric tons of steam per annum using waste heat and renewable electricity. The plant is expected to cut CO₂ emissions by 98%, in line with the company’s ambition of being net-zero by 2050.

• Growing requirement of large-scale space heating systems along with stringent regulations for rising carbon footprint has propelled the demand for heat pumps for district heating applications. With the increasing demand for cleaner and more efficient heating systems with low pollution levels, there is an increasing need for heat pumps used in district heating systems.

• For instance, in October 2024, Copeland introduced the Vilter VQ95, an integrated one-stage industrial heat pump used in district heating systems and other industries such as food and beverage manufacturing. The Vilter VQ95 uses NH3 as a refrigerant with low GWP.

• U.S. dominated the industrial heat pump market in North America with around 85.3% share in 2025 and generated USD 274.6 million in revenue. Rising demand for reliable heating and cooling systems across industrial applications along with introduction of stringent regulatory mandates for reducing emissions will complement industry outlook. The introduction of high-capacity heat pumps on an industrial basis will seek to support a low carbon future along with reducing fossil fuel dependence over the projected timeline.

• For instance, a collaborative effort in September 2024 led to the creation of the Industrial Heat Pump Alliance, targeting the promotion of heat pumps and the reduction of decarbonization costs for industries. The alliance comprises the American Council for an Energy-Efficient Economy, the National Electrical Manufacturers Association, and the Renewable Thermal Collaborative.

• North America industrial heat pump market is set to grow owing favorable regulatory regime, which is reinforced by numerous fiscal support schemes and policies. In addition, encouraging policy framework to propel low carbon district heating network will augment the industry outlook over the coming years. Moreover, the favorable initiatives to capture excess industrial waste & process heat along with the increasing investments across restructuring of district heating networks will favor the industry landscape.

• Europe industrial heat pump market is projected to surge over USD 859.8 million by 2035. Growing demand for reliable heating systems with enhanced degree of independence and increasing energy cost is set to influence the business landscape. Favorable schemes by the government authorities for reducing carbon footprint and flourishing investments for district heating projects will shape the business dynamics.

• For instance, in April 2025, Enerin set up and installed a 400 kW HoegTemp industrial heat pump at Pelagia Måløy, a fish processing plant located in Norway. This type of system allows the plant to replace old boilers with a system that creates steam from recycled cooling heat or the surrounding air with the help of renewable electricity.

• Asia Pacific industrial heat pump market was evaluated at over USD 531.5 million in 2025. The encouraging outlook towards deployment of renewable energy systems, rapidly increasing requirement for effective space heating, and positive initiatives towards reduction of overall carbon footprint. In addition, various government initiatives and investments across the region are aimed at promoting the use of sustainable heating technologies and the ongoing industrialization and the upgrading of aging industrial infrastructure, are among the key factors propelling the regional industry expansion.

• For instance, in February 2025, Japan submitted its revised Nationally Determined Contribution. Despite the hopes of higher ambition, the final submission of the NDC followed the earlier emission reduction targets, suggesting structural constraints in Japan’s climate policy. Japan’s long-term vision remains reducing emissions by 46% by 2030 and net-zero emissions by 2050 under its current plan.

• Middle East & Africa industrial heat pump market holds a market share of 6.2% in 2025. Growing industrial establishment, retrofitting of existing industrial processes and infrastructure, stable economic environment, and attractive financial incentives is shaping the industry dynamics. Moreover, the presence of well-established industrial sectors including chemicals, food and beverage, and paper manufacturing, that demand high energy usage is set to further augment the business landscape for sustainable technology integration.

• The Latin America industrial heat pump industry is set to grow at a CAGR of 6.3% from 2026 to 2035. Rising investments in industrial infrastructure development by government & private organizations will positively augment the regional industry outlook. Growing adoption of sustainable technologies, which are increasingly being used as supplementary heating solutions in colder regions and as primary systems for both heating and cooling in areas with milder climates is shaping the business dynamics.

Industrial Heat Pump Market Share

• Major 5 players operating across the industrial heat pump industry include Atlas Copco AB, Carrier, Daikin, MAN Energy Solutions and GEA Group Aktiengesellschaft contribute around 30% of the market share in 2024.

• Key companies operating in the industrial heat pump industry are characterized by intense competition attributed by product diversification, consolidating their market presence through strategic partnerships, and mergers & acquisitions, as they actively seek to enhance their competitive position.

• Over the last few years, the market for industrial heat pumps has displayed good resilience even in the face of economic fluctuations. By 2024, better supply chains and an increased awareness of efficient heating have helped accelerate the adoption of heat pumps. By 2025, better investments in infrastructure, environmental controls, and a move towards low-carbon technologies have helped drive heat pumps deeper into industries.

• ATLAS COPCO offers industrial heat pump solutions that are designed for high performance, energy efficiency, and ease of use and maintenance. These solutions can be combined with the company's other technologies, including air compressors, chillers, and energy recovery units, to create sustainable utility rooms that help increase the overall efficiency of industrial plants. When these heat pumps are provided with waste heat waters from industrial compressors, they can greatly enhance energy efficiency, improve the environment, and increase long-term economic competitiveness in industrial plants.

• Everllence heat pump system provides an affordable and environmentally friendly solution for generating both heating and cooling. More advanced configurations incorporate thermal storage, allowing for efficient management of heat and cold over time. At the highest level, its electro-thermal energy storage system integrates heat generation, storage, and conversion back into electricity, functioning as a comprehensive energy management platform.

• Carrier provides a new range of CO2-based industrial heat pumps that provide a sustainable solution for various applications. The systems are designed to be compact and modular for safety, easy installation, and maintenance. The CO2-based systems provide a natural refrigerant for the operation of the systems.

Industrial Heat Pump Market Companies

Major players operating in the industrial heat pump industry are:

• AGO Energie + Anlagen

• Armstrong International

• Atlas Copco

• Baker Hughes

• Carrier

• Daikin Applied Europe

• Dalrada Technology Group

• Ecop

• Enerin

• Everllence

• GEA Group

• Hien New Energy Equipment

• Johnson Controls

• Mitsubishi Electric

• Ochsner

• Oilon Group

• Siemens Energy

• Thermax

• Trane Technologies

• Turboden

• Everllence recorded an annual turnover of around USD 5 billion for the year 2024. The company’s industrial heat pump systems are designed to access a vast variety of available heat sources with maximum efficiency using renewable electricity sources to virtually eliminate emissions. Everllecnce heat pumps provide flexibility with their temperature ranges from 60°C to 300°C, useful for water heating, process heating, district heating, or steam generation. They can provide 10-100+ MWth per unit, and more can be obtained by linking the units together in parallel.

• Carrier, headquartered in U.S., recorded net sales of USD 21.7 billion for 2025, and achieved USD 22.4 billion in revenue for the year 2024. Its CO2-based industrial heat pump solutions offered by the company, along with its high-temperature heat pump solutions known as AquaForce and AquaSnap, utilize various heat sources such as ambient and recovered heat to provide environmentally friendly energy solutions to various kinds of heating applications.

• GEA Group Aktiengesellschaft recorded a revenue of USD 4.63 billion for the nine months of 2025 and USD 6.26 billion for the year 2024. The company offers customized heat pumps where desired output temperatures go beyond what conventional GEA systems can deliver. It also offers Blu-Red fusion heat pumps, open type heat pumps, RedAstrum and RedGenum for various industrial processes and applications.

Industrial Heat Pump Industry News

• In February 2026, JEXSYS launched a high-temp CO2 heat pump especially designed for the Asia Pacific region and can raise pressurized hot water to as high as 130°C to process the same. The basic model of 500 kW capacity, launched at HVAC&R Japan 2026, has a COP of 4.8 and can be extended to larger capacities as required. This was developed after the previously developed ammonia-based units failed to reach the required temperature levels. It can produce around 4.2 metric tons of hot water per hour and can also produce chilled water, making it eligible to receive incentives under the Japanese government’s heat recovery schemes.

• Trane introduced its new unit, the RTWF HT, in January 2026. The unit is a high-temperature water-to-water heat pump designed to operate on its XStream platform. The unit is intended to serve industries in meeting their heating and cooling demands. The unit is capable of delivering hot water at up to 105°C, with a capacity of up to 1.5 MW, helping industries in their decarbonization journey. The unit uses Trane’s screw compressor, Symbio 800 controller, and environmentally friendly low-GWP R1233zd(E) refrigerant. The unit is available in six scalable formats, with a COP of 5.0, backed by Trane’s service capabilities in EMEA and ANZ regions.

• In June 2025, Armstrong International commenced developing a new production facility in Herstal, Belgium, to produce high-temperature industrial heat pumps after acquiring a facility measuring 5,000 square meters, it intends to double production capacity. By working with Combitherm, a German-based company, Armstrong International aims to begin deliveries of up to 50 MW of modular Circular Thermal heat pumps by the start of 2027. Armstrong’s heat pumps, which can generate superheated water or low-pressure steam up to 120 degrees Celsius, do this while reusing waste heat, reducing primary energy consumption by up to 70%.

• In June 2025, Hien launched two state-of-the-art heat pump designs during InstallerShow 2025 in Birmingham, UK. Designed for industrial applications, these ultra-high-temperature steam generators operate up to 125°C, thus making them a good match for various industries such as food, pharma, and chemicals. The heat pumps are also highly efficient and feature smart grid technology, in addition to using a refrigerant with a low GWP rating, such as R1233zd(E). The range includes modular designs such as water/water, water/steam, and steam/steam, in addition to opportunities for flexible waste heat recovery and CO2-free steam when using green power sources.

• In March 2025, PILLER and GIG Karasek joined forces to provide what is claimed to be the most powerful industrial heat pump system in the world to BASF's Ludwigshafen complex. GIG Karasek will use their position as EPC contractor to install 11 compressors from PILLER featuring their CompriVAP technology. The aim is to make formic acid production carbon dioxide-free by creating CO₂-free steam and cutting emissions by 98 percent. This is another example of the two companies' commitment to the sustainable transformation of industries through innovative heat recovery and vapor compression technology.

The industrial heat pump market research report includes in-depth coverage of the industry with estimates & forecast in terms of volume (Units) and revenue (USD Million) from 2022 to 2035, for the following segments:

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Market, By Product

• Air source

• Ground source

• Water source

• Closed cycle mechanical heat pump

• Open cycle mechanical vapor compression heat pump

• Open cycle mechanical thermocompression heat pump

• Closed cycle absorption heat pump

Market, By Capacity

• Up to 500 kW

• > 500 kW to 2 MW

• 2 MW - 5 MW

• > 5 MW

Market, By Temperature

• 80 – 100 °C

• 100 – 150 °C

• 150 – 200 °C

• > 200 °C

Market, By Application

• Industrial

  • Paper

  • Food & beverages

  • Chemical

  • Iron & Steel

  • Machinery

  • Non-Metallic minerals

  • Other industries

• District heating

The above information has been provided for the following regions and countries:

• North America

  • U.S.

  • Canada

• Europe

  • UK

  • Norway

  • Denmark

  • Finland

  • Sweden

  • Germany

  • Poland

  • Spain

  • Austria

• Asia Pacific

  • China

  • Japan

  • Australia

  • South Korea

• Middle East & Africa

  • Saudi Arabia

  • Turkey

  • South Africa

• Latin America

  • Brazil

  • Mexico