Low-Carbon Industrial Heating in the EU and UK: Integrating Waste Heat Recovery, High-Temperature Heat Pumps, and Hydrogen Technologies

Abstract

This research introduces a two-stage, low-carbon industrial heating process, leveraging advanced waste heat recovery (WHR) technologies and exploiting waste heat (WH) to drive decentralised hydrogen production. This study is supported by a data-driven analysis of individual technologies, followed by 0D modelling of the integrated system for technical and feasibility assessment. Within 10 years, the EU industry will be supported by two main strategies to transition to low-carbon energy: (a) shifting from grid-mix electricity towards fully renewable sources, and (b) expanding low-carbon hydrogen infrastructure within industrial clusters. On the demand side, process heating in the industrial sector accounts for 70% of total energy consumption in industry. Almost one-fifth of the energy consumed to fulfil the process heat demand is lost as waste. The proposed heating solution is tailored for process heat in industry and stands apart from the dual-mode residential heating system (i.e., heat pump and gas boiler), as it is based on integrated and simultaneous operation to meet industry-level reliability at higher temperatures, focusing on WHR and low-carbon hydrogen. The solution uses a cascaded heating approach. Low- and medium-temperature WH are exploited to drive high-temperature heat pumps (HTHPs), followed by hydrogen burners fuelled by hydrogen generated on-site by electrolysers, which are powered by advanced WHR technologies. The results revealed that the deployment of the solution at scale could fulfil ~14% of the process heat demand in EU/UK industries by 2035. Moreover, with further availability of renewable energy sources and clean hydrogen, it could have a higher contribution to the total process heat demand as a low-carbon solution. The economic analysis estimates that adopting the combined heating solution—benefiting from the full capacity of WHR for the HTHP and on-site hydrogen production—would result in a levelised cost of heat of ~EUR 84/MWh, which is lower than that of full electrification of industrial heating in 2035.

1. Introduction

Clean hydrogen is anticipated to be an essential pathway to decarbonising the EU/UK economy. As proof of concept, local trials of hydrogen towns were scheduled in early 2023 to evaluate hydrogen technologies for residential heating. However, in May 2024, the UK hydrogen town trial initiative was pushed back until at least 2026 by the government due to a lack of low-carbon hydrogen supply, safety concerns, and doubts about the cost-competitiveness of the solution compared to alternatives like air-source heat pumps (HPs). These concerns were strongly grounded in unambiguous scientific evidence [1,2]. However, the situation for industrial heat is different. The first concern is the technical viability of HPs, as unlike residential applications, heat pumps cannot fully address industrial heat demand. Secondly, while hydrogen emerges as a potential solution for heating, the government’s temporary withdrawal of support for hydrogen in residential heating might hinder the advancement of hydrogen technologies for industrial heating [3]. Therefore, it is essential to conduct further research to (a) clarify and unlock the full potential of hydrogen and HPs in industrial heating; and (b) provide decision-makers with early scientific evidence on the role of these two technologies in future industrial heating to support the hydrogen and heating roadmaps and avoid mid-term policy reversal [3]. Thus, the present study will develop an integrated solution where hydrogen and HPs complement each other and play a dominant role in industrial heating decarbonisation. Moreover, with further availability of renewable energy sources (RESs) and clean hydrogen, along with hydrogen blending technology, it could meet up to 40% of the total process heat demand as a low-carbon solution.

On the other hand, it is worth noting that heat accounts for ~70% of industrial energy demand both in the UK and globally [4]. It is predominantly supplied by fossil fuel combustion, which is responsible for ~50% of the sector emissions. For example, the process heat demand in UK industry is estimated at ~170 TWh, accounting for almost 25% of the UK heat demand, equivalent to 11% of the final UK energy demand [5]. The potential of process heating for industrial decarbonisation is compounded by the fact that up to 23% of heat is dissipated into the environment and remains unused, necessitating further focus on overcoming technological barriers.

Looking at the literature, many investigations focus on using hydrogen for heating homes [6]. Knosala et al. conducted a techno-economic analysis comparing different scenarios of HPs and hydrogen boilers in Germany. Based on the results, depending on the price of hydrogen and electricity, each may be economically viable [7]. Several investigations also explore hybrid solutions, evaluating different options of HPs, hydrogen boilers, and gas boilers for residential heating [8,9]. Another subset of the literature focuses on hydrogen blending for boilers, but again for residential buildings [10]. As is clear from the literature review, there is limited combination of solutions for buildings, and the scope of industrial heating remains a gap; hence, the present research aims to valorise the full capacity of low-carbon solutions supporting process heating in industry.

1.1. Novelty and Contributions to the Field

Despite progress in low-carbon industrial heating, key research gaps remain in hydrogen adoption for industrial heating in combination with existing solutions. In that context, this research introduces novel contributions at both the system and component levels. At the system level, it involves a novel configuration for the adoption of clean heat technologies with the aim of (a) maximising the synergy among technologies with the highest potential for industrial heating decarbonisation, and enhancing interconnection capacity, (b) improving the security and resilience of industrial sites and their interactions with future green hydrogen and electricity networks, and (c) leveraging economic opportunities arising from a combination of emerging low-carbon technologies. This will include the uptake of enabler technologies (WHR and on-site electrolysis) for cost savings. Further innovation is brought by each technology, as they are selected from state-of-the-art solutions, particularly those expected to be market-ready within the next decade. Among those are the HTHP, rapid-response electrolysis, and H2P technologies, all of which support the proposed solution going beyond traditional concepts, providing additional flexibility.

In particular, the contributions of this research include (a) achieving carbon neutrality in industrial process heating, and (b) supporting the adoption of WHR technologies in process heating while informing decision-makers through the development of guidelines.

1.2. Research Framework and Case Study

According to the key industrial decarbonisation roadmaps in the EU/UK [11], several technological solutions have been developed over the years to support the decarbonisation of heating process in industries, including electrification; heat-to-power (H2P) technologies; utilising renewable energy sources (RESs) and green hydrogen as a feedstock, carrier, or a fuel for heat; and HPs being more pronounced and found more favourable for investment. However, there are barriers such as the pending status in fulfilling industrial criteria, including the Technology Readiness Level (TRL) or economic viability.

Due to their different maturity levels, the selection of technologies should be based on a whole-systems analysis considering the economies of scale. Moreover, given the heterogeneity of the building stock as well as existing infrastructure, there is a benefit in adopting a portfolio of heating technologies. In that context, this project comprises a mixture of technologies and aims to investigate the synthesis and consolidation of a brand-new heating route and explore the interdependencies between a series of technologies under development, to provide an innovative and sustainable design system for industrial process heating. Figure 1 represents the outline of industrial process heat in 2035—integrating the combined industrial heating solution. Each of the following energy system elements brings innovation into the integrated system, unlocking the full potential of industrial waste heat (WH) from industry [12], and driving waste heat recovery technologies like organic Rankine cycles (ORCs) [13,14,15] to supply the power for on-site electrolysis—which itself also generates waste heat [16]. Another portion of the WH serves as the heat source for high-temperature heat pumps (HTHPs) [17]. The hydrogen generated on-site, along with external green hydrogen, feeds into the hydrogen burners.

Supply of green hydrogen: Developing a global hydrogen economy requires addressing the causality dilemma of growing supply and demand in tandem, where a balanced expansion is expected for both. The supply of green hydrogen provides low-carbon fuel with an established roadmap for a dedicated hydrogen network in the UK and most EU countries. Currently, almost 7% of hydrogen demand is unambiguously dedicated to industrial heat. However, according to the EU hydrogen roadmaps, out of the 15.7 Mt/y of clean hydrogen production projects by 2030, projects representing 7.2 Mt/year have not yet specified or disclosed how their hydrogen will be used. This echoes the unbalanced growth stage of different aspects of the hydrogen economy, in which hydrogen generation has dominated the investment, while hydrogen utilisation continues to lag behind [18,19].

Supply of grid power: In May 2024, global renewable energy supported >30% of electricity supply for the first time, aligning with the energy innovation roadmap. The UK, as a leader in RESs, achieved a record high of 40% in its electricity mix in 2023. The share of RESs in the power system is expected to reach 60% by 2030, with a goal of full decarbonisation of the power system by 2035, according to the Net Zero Growth Plan [20]. The role of RESs in industrial heating and cooling is fully reflected in Art. 22a of the EU Council, which adopted the amended Renewable Energy Directive (“RED III”) with a target annual increase of 0.8% per year [21].

WHR technologies: As a key intervention with double targets, it has the potential to reduce the need for energy supply and improve resource and energy efficiency; additionally, it provides carbon-free power for on-site hydrogen production by electrolysis. The concept for WH to power is not limited to ORC; there are alternatives like the trilateral flash cycle, sCO₂ cycles, thermoelectric conversion, magnetocaloric conversion, and the Stirling cycle [22,23,24]. However, the ORC is selected for the purpose of examining the proposed heating solution. WHR technologies are fed from the WH, primarily sourced from the industrial process itself, along with the WH from the electrolysis process.

Electrolysis: Using carbon-free power from WH to feed the electrolysis process is effectively the same as using RES power: no additional emissions are produced. A range of electrolysis solutions can be integrated based on the inherent characteristics of the WH. Among those with higher TRLs, alkaline water electrolysis (ALK) and polymer electrolyte membrane (PEM) electrolysers have a significant historic pedigree on different scales. Moreover, several studies, including the investigation by Zhao et al., demonstrate that optimisation of the ALK electrolyser configuration can lead to more efficient industrial electrolysis tailored for the target industrial plant [25]. There are also Solid Oxide Electrolyser Cell (SOEC) electrolysers at a lower TRL, which have a high energy conversion efficiency and require high temperatures, making them particularly suitable for industrial applications with access to WH sources. Anion exchange membrane (AEM) electrolysers combine high load flexibility, a compact design, and low reliance on critical raw materials, but they are less mature and led by a few manufacturers. However, they are highly compatible with an intermittent power supply and suitable for variable RESs, making them a fit for decentralised applications [26].

Integrating WH-driven on-site electrolysis and HTHPs aims to reduce the dependency of hydrogen heating on hydrogen networks, preserving more hydrogen for other uses. This is somewhat reflected in the government’s statement on halting the pilot of household hydrogen heating, with a clear concern that hydrogen should be reserved for use in heavy industry [3], rather than being seen as a general solution for all types of heating. The same rationale is used in developing hybrid heating for industrial settings, allowing hydrogen to play a role where needed.

Moreover, it is notable that hydrogen heating in the proposed solution does not conflict with but works alongside electrification, which is currently a key part of the UK/EU decarbonisation strategies. Indeed, in low- or medium-temperature industrial heat applications, both solutions are viable. However, the benefits of hydrogen heating, which burns at temperature of up to 2100 °C, are more pronounced in high-temperature applications like steelmaking, cement, and chemical industries, which require intense heat that is challenging to achieve solely with electricity. The other advantage of hydrogen heating stems from its compatibility with the existing infrastructure, as hydrogen can often be blended with existing fuel sources and used in existing industrial equipment with minor modifications.

2. Methodology

2.1. Waste Heat Potential

The waste heat potential (WHP) required for the present study is taken from the literature on EU industries (see Section 3.6). Referring to recent literature on actual WHP assessment [27], the WHP is then adjusted by the Carnot efficiency (${\mathsf{\eta }}_{\mathrm{C}}$) to better account for the effect of the WH temperature. The Carnot waste heat potential (CWHP) is calculated using Equation (1):

$$\mathrm{C}\mathrm{W}\mathrm{H}\mathrm{P}=\mathrm{W}\mathrm{H}\mathrm{P}\times {\mathsf{\eta }}_{\mathrm{C}}$$

(1)

2.2. Two-Stage Heating

This section provides details for estimating the heating capacity for each technology. The heating system comprises two stages: an HTHP followed by hydrogen combustion. As shown in Figure 1, this two-stage approach delivers heat output through cascaded heat exchangers to the industrial process where the input to the HTHP stage (${\mathrm{Q}}_{\mathrm{i}\mathrm{n},\mathrm{H}\mathrm{T}\mathrm{H}\mathrm{P}}$) is calculated using Equation (2) using low-temperature waste heat (${\mathrm{W}\mathrm{H}}^{\mathrm{L}\mathrm{T}}$), which is a part of the total waste heat available in industry, typically defined as WH below 100 °C [28]. The HTHP output (${\mathrm{Q}}_{\mathrm{o}\mathrm{u}\mathrm{t},\mathrm{H}\mathrm{T}\mathrm{H}\mathrm{P}}$) is also calculated using the coefficient of performance (COP) of the heat pump and the heat input (${\mathrm{Q}}_{\mathrm{i}\mathrm{n}}$) using Equation (3). Assuming that this heat is delivered to the heat transfer fluid (HTF) circulating through both stages, the temperature change in the HTF in the first stage—using an HTHP—can be derived using Equation (4). The equation uses the mass flow rate (${\mathrm{m}}_{\mathrm{H}\mathrm{T}\mathrm{F}}$) and specific heat capacity (${\mathrm{C}}_{\mathrm{p},\mathrm{H}\mathrm{T}\mathrm{F}}$) of HTF to estimate the increase from ambient temperature (${\mathrm{T}}_{\mathrm{H}\mathrm{T}\mathrm{F},\mathrm{a}\mathrm{m}\mathrm{b}}$) to the HTHP outlet temperature (${\mathrm{T}}_{\mathrm{H}\mathrm{T}\mathrm{F},\mathrm{H}\mathrm{T}\mathrm{H}\mathrm{P}}$).

$${\mathrm{Q}}_{\mathrm{i}\mathrm{n},\mathrm{H}\mathrm{T}\mathrm{H}\mathrm{P}}=\left({\displaystyle \frac{{\mathrm{W}\mathrm{H}}^{\mathrm{L}\mathrm{T}}}{{\mathrm{W}\mathrm{H}}^{\mathrm{t}\mathrm{o}\mathrm{t}\mathrm{a}\mathrm{l}}}}\right)\times \mathrm{C}\mathrm{W}\mathrm{H}\mathrm{P}$$

(2)

$${\mathrm{Q}}_{\mathrm{o}\mathrm{u}\mathrm{t},\mathrm{H}\mathrm{T}\mathrm{H}\mathrm{P}}={\mathrm{Q}}_{\mathrm{i}\mathrm{n},\mathrm{H}\mathrm{T}\mathrm{H}\mathrm{P}}(1+1/(\mathrm{C}\mathrm{O}\mathrm{P}-1))$$

(3)

$${\mathrm{Q}}_{\mathrm{o}\mathrm{u}\mathrm{t},\mathrm{H}\mathrm{T}\mathrm{H}\mathrm{P}}={\mathrm{m}}_{\mathrm{H}\mathrm{T}\mathrm{F}}{\mathrm{C}}_{\mathrm{p},\mathrm{H}\mathrm{T}\mathrm{F}}\times ({\mathrm{T}}_{\mathrm{H}\mathrm{T}\mathrm{F},\mathrm{H}\mathrm{T}\mathrm{H}\mathrm{P}}-{\mathrm{T}}_{\mathrm{H}\mathrm{T}\mathrm{F},\mathrm{a}\mathrm{m}\mathrm{b}})$$

(4)

In the second stage, heat is generated along a different pathway, in which the remaining WH is introduced into the ORC as a representative WHR technology for power generation. The power generated supplies the electrolysers, which produce hydrogen at the rate of ${\mathrm{m}}_{{\mathrm{H}}_2}$. The electrolysis process generates some WH (${\mathrm{W}\mathrm{H}}^{\mathrm{e}\mathrm{l}\mathrm{e}\mathrm{c}}$), which is included in the WH fed into the ORC (see Figure 1). The electricity produced drives the electrolyser to supply on-site hydrogen production (see Equation (5)).

$${\mathrm{m}}_{{\mathrm{H}}_2,\mathrm{e}\mathrm{l}\mathrm{e}\mathrm{c}\mathrm{t}\mathrm{r}\mathrm{o}\mathrm{l}\mathrm{y}\mathrm{s}\mathrm{e}\mathrm{r}}=[\left(1-{\displaystyle \frac{{\mathrm{W}\mathrm{H}}^{\mathrm{L}\mathrm{T}}}{{\mathrm{W}\mathrm{H}}^{\mathrm{t}\mathrm{o}\mathrm{t}\mathrm{a}\mathrm{l}}}}\right)\times \mathrm{C}\mathrm{W}\mathrm{H}\mathrm{P}+{\mathrm{W}\mathrm{H}}^{\mathrm{e}\mathrm{l}\mathrm{e}\mathrm{c}}\times {\mathsf{\eta }}_{\mathrm{C}}]\times {\mathsf{\eta }}_{\mathrm{O}\mathrm{R}\mathrm{C}}\times \left({\displaystyle \frac{1}{{\mathrm{S}\mathrm{E}\mathrm{C}}_{\mathrm{e}\mathrm{l}\mathrm{e}\mathrm{c}\mathrm{t}\mathrm{r}\mathrm{o}\mathrm{l}\mathrm{y}\mathrm{s}\mathrm{e}\mathrm{r}}}}\right)$$

(5)

The total mass flow rate of hydrogen is the sum of the hydrogen (Equation (6)) generated on-site as well as hydrogen supplied from an external source of the hydrogen network.

$${\mathrm{m}}_{{\mathrm{H}}_2,\mathrm{t}\mathrm{o}\mathrm{t}\mathrm{a}\mathrm{l}}={\mathrm{m}}_{{\mathrm{H}}_2,\mathrm{e}\mathrm{l}\mathrm{e}\mathrm{c}\mathrm{t}\mathrm{r}\mathrm{o}\mathrm{l}\mathrm{y}\mathrm{s}\mathrm{e}\mathrm{r}}+{\mathrm{m}}_{{\mathrm{H}}_2,\mathrm{n}\mathrm{e}\mathrm{t}\mathrm{w}\mathrm{o}\mathrm{r}\mathrm{k}}$$

(6)

In the present analysis, a parameter is defined as the H₂ network ratio (${\alpha }_{{\mathrm{H}}_2}$), which is the ratio of hydrogen taken from the network to H₂ from the electrolyser, defined as Equation (7).

$${\mathsf{\alpha }}_{{\mathrm{H}}_2}={\mathrm{m}}_{{\mathrm{H}}_2,\mathrm{n}\mathrm{e}\mathrm{t}\mathrm{w}\mathrm{o}\mathrm{r}\mathrm{k}}/{\mathrm{m}}_{{\mathrm{H}}_2,\mathrm{e}\mathrm{l}\mathrm{e}\mathrm{c}\mathrm{t}\mathrm{r}\mathrm{o}\mathrm{l}\mathrm{y}\mathrm{s}\mathrm{e}\mathrm{r}}$$

(7)

The useful thermal energy delivered to the HTF is derived using Equation (8), in which the heat is delivered by the hydrogen burner and is calculated using the total hydrogen mass flow rate, the lower heating value (LHV) of hydrogen, as well as the thermal efficiency of the burner.

$${\mathrm{Q}}_{\mathrm{o}\mathrm{u}\mathrm{t},\mathrm{b}\mathrm{u}\mathrm{r}\mathrm{n}\mathrm{e}\mathrm{r}}={\mathrm{m}}_{{\mathrm{H}}_2,\mathrm{t}\mathrm{o}\mathrm{t}\mathrm{a}\mathrm{l}}\times \mathrm{L}\mathrm{H}\mathrm{V}\times {\mathsf{\eta }}_{\mathrm{b}\mathrm{u}\mathrm{r}\mathrm{n}\mathrm{e}\mathrm{r}}$$

(8)

When the heat from the second stage is transferred to the same HTF that passed through the first stage, it raises the HTF temperature as described in Equation (9).

$${\mathrm{Q}}_{\mathrm{o}\mathrm{u}\mathrm{t},\mathrm{b}\mathrm{u}\mathrm{r}\mathrm{n}\mathrm{e}\mathrm{r}}={\mathrm{m}}_{\mathrm{H}\mathrm{T}\mathrm{F}}{\mathrm{C}}_{\mathrm{p},\mathrm{H}\mathrm{T}\mathrm{F}}\times ({\mathrm{T}}_{\mathrm{H}\mathrm{T}\mathrm{F},\mathrm{F}\mathrm{i}\mathrm{n}\mathrm{a}\mathrm{l}}-{\mathrm{T}}_{\mathrm{H}\mathrm{T}\mathrm{F},\mathrm{H}\mathrm{T}\mathrm{H}\mathrm{P}})$$

(9)

Assuming that ${\mathrm{Q}}_{\mathrm{o}\mathrm{u}\mathrm{t},\mathrm{H}\mathrm{T}\mathrm{H}\mathrm{P}}$ and ${\mathrm{Q}}_{\mathrm{o}\mathrm{u}\mathrm{t},\mathrm{b}\mathrm{u}\mathrm{r}\mathrm{n}\mathrm{e}\mathrm{r}}$ are calculated independently based on the waste heat availability and the temperature-based classification of waste heat, combining Equations (4) and (9), the final HTF temperature (${\mathrm{T}}_{\mathrm{H}\mathrm{T}\mathrm{F},\mathrm{F}\mathrm{i}\mathrm{n}\mathrm{a}\mathrm{l}}$) can be calculated by Equation (10):

$${\mathrm{T}}_{\mathrm{H}\mathrm{T}\mathrm{F},\mathrm{F}\mathrm{i}\mathrm{n}\mathrm{a}\mathrm{l}}={\displaystyle \frac{{\mathrm{Q}}_{\mathrm{o}\mathrm{u}\mathrm{t},\mathrm{b}\mathrm{u}\mathrm{r}\mathrm{n}\mathrm{e}\mathrm{r}}}{{\mathrm{Q}}_{\mathrm{o}\mathrm{u}\mathrm{t},\mathrm{H}\mathrm{T}\mathrm{H}\mathrm{P}}}}\times \left({\mathrm{T}}_{\mathrm{H}\mathrm{T}\mathrm{F},\mathrm{H}\mathrm{T}\mathrm{H}\mathrm{P}}-{\mathrm{T}}_{\mathrm{H}\mathrm{T}\mathrm{F},\mathrm{a}\mathrm{m}\mathrm{b}\mathrm{i}\mathrm{e}\mathrm{n}\mathrm{t}}\right)+{\mathrm{T}}_{\mathrm{H}\mathrm{T}\mathrm{F},\mathrm{H}\mathrm{T}\mathrm{H}\mathrm{P}}$$

(10)

Moreover,

Table 1. Technical assumptions and key input parameters.

Parameter [Unit]	Value	Reference
Electric heater efficiency [%]	85–95	-
Burner efficiency [%]	45–80	[29,30]
ORC efficiency	Refer to Section 3.5	-
Electrolysis efficiency	Refer to Section 3.3	-
Electrolysis WH [%]	13.2 to 25.3	[13]
H2 LHV [kWh/kg]	33.3	[19]
H2 HHV [kWh/kg]	39.4	[19]

is a list of key assumptions required for the technical modelling of the low-carbon heating solution in the present research.

Based on the heat output of all components—namely, the HTHP and the hydrogen burner—the supply-to-demand ratio (${\mathrm{R}}_{\mathrm{i}}$) for each heating pathway is estimated using Equation (11), in which ${\mathrm{I}\mathrm{H}}_{\mathrm{T}\mathrm{o}\mathrm{t}\mathrm{a}\mathrm{l}}$ refers to the industrial heat demand in the EU (see Section 3.6).

$${\mathrm{R}}_{\mathrm{i}}={\displaystyle \frac{{\mathrm{Q}}_{\mathrm{i}}}{{\mathrm{I}\mathrm{H}}_{\mathrm{t}\mathrm{o}\mathrm{t}\mathrm{a}\mathrm{l}}}},\mathrm{i}\in \{\mathrm{H}\mathrm{T}\mathrm{H}\mathrm{P},{\mathrm{H}}_2\mathrm{b}\mathrm{u}\mathrm{r}\mathrm{n}\mathrm{e}\mathrm{r},\mathrm{e}\mathrm{l}\mathrm{e}\mathrm{c}\mathrm{t}\mathrm{r}\mathrm{i}\mathrm{c}\}$$

(11)

In particular, for the proposed solution—comprising an HTHP and hydrogen heating—the sum of their ${\mathrm{R}}_{\mathrm{i}}$ values represents the total fraction of industrial heat demand met by this system.

2.3. Levelised Cost of Heat

The economic comparison of the pathways in this study is based on the levelised cost of heat (LCOH) for the i-th pathway, defined as Equation (12), which includes capital expenditures of pathway (CAPEX), fixed operating and maintenance (FOM) costs, and fuel costs (either power or external hydrogen supply) associated with the delivered heat (${\mathrm{Q}}_{\mathrm{i}}$). The capital recovery factor (CRF)—given by Equation (13)—is used to annualise the CAPEX and is calculated based on a discount rate (r) to account for the time value of money over the technology lifetime (n).

$${\mathrm{L}\mathrm{C}\mathrm{O}\mathrm{H}}_{\mathrm{i}}=(\mathrm{C}\mathrm{R}\mathrm{F}\times {\mathrm{C}\mathrm{A}\mathrm{P}\mathrm{E}\mathrm{X}}_{\mathrm{i}}+{\mathrm{F}\mathrm{O}\mathrm{M}}_{\mathrm{i},\mathrm{a}\mathrm{n}\mathrm{n}\mathrm{u}\mathrm{a}\mathrm{l}}+{\mathrm{E}\mathrm{n}\mathrm{e}\mathrm{r}\mathrm{g}\mathrm{y}\mathrm{C}\mathrm{o}\mathrm{s}\mathrm{t}}_{\mathrm{i},\mathrm{a}\mathrm{n}\mathrm{n}\mathrm{u}\mathrm{a}\mathrm{l}})/{\mathrm{Q}}_{\mathrm{i}}$$

(12)

$$\mathrm{C}\mathrm{R}\mathrm{F}={\displaystyle \frac{\mathrm{r}{(1+\mathrm{r})}^{\mathrm{n}}}{{(1+\mathrm{r})}^{\mathrm{n}}-1}}$$

(13)

The overall LCOH is calculated as Equation (14), which is the weighted average of the LCOH of all pathways involved. The weights are based on each pathway’s contribution to the total industrial heat demand at the EU scale.

$$\mathrm{L}\mathrm{C}\mathrm{O}\mathrm{H}={\sum }_{\mathrm{i}}{\mathrm{L}\mathrm{C}\mathrm{O}\mathrm{H}}_{\mathrm{i}}\times {\mathrm{R}}_{\mathrm{i}},\mathrm{i}\in \{\mathrm{H}\mathrm{T}\mathrm{H}\mathrm{P},{\mathrm{H}}_2\mathrm{b}\mathrm{u}\mathrm{r}\mathrm{n}\mathrm{e}\mathrm{r},\mathrm{e}\mathrm{l}\mathrm{e}\mathrm{c}\mathrm{t}\mathrm{r}\mathrm{i}\mathrm{c}\}$$

(14)

Other economic assumptions for all technologies involved are listed in

Table 2. Key economic inputs for the economic assessment.

Technology	CAPEX [EUR/kW]	FOM
Decentralised electrolysis	1837, 1548, 928 (year of 2025, 2030 and 2050) [31]	1.5–3% of CAPEX [31]
${\mathrm{H}}_2$ boiler	114, 124, 124 (year of 2025, 2030, 2050) [31]
HTHP	465 [32,33]
ORC	2122 [34], 1800–2500 [35], 2136 [36], 1630 [37] ~6% cost drop by 2030 [38]
Electric boiler/heater	110, 100, 95, 90 (year of 2025, 2030, 2040, 2050) [31]	1.1 EUR/kW [31]

.

Also, the economic assumptions for currency conversion and energy prices are listed in

Table 3. Economic assumptions for currency conversion and energy prices.

Item	Value
Power cost (3-year average from 2022 to 2024 EU27 + UK)	Current: 10.99 EUR/MWh excluding taxes and levies, and VAT [39] 23% reduction in 2030 [40]
Hydrogen price	6.6 [41] ~3 EUR/kg in year 2035 [41,42,43]
Currency exchange rate (per EUR)	USD/EUR 0.933 | GBP/EUR 1.168 [44]
EU-average discount rate	7% [45]

.

3. Results and Discussion

3.1. Technology Assessment Approach

The proposed solution is an integrated system including multiple technologies—namely, a boiler, heat pump, ORC, and electrolysis. As the overall assessment strongly relies on the assumptions regarding individual technologies, separate assessments are conducted for each technological component to reach reliable key performance indicators (KPIs) for each technological component. The assessment for each technology involves a scan of the literature and market data for each key technology, compiling publicly available data to support the discussion around the span of KPIs for each technology. Ultimately, the average value serves as a reliable input for the techno-economic assessment. This approach—combining literature and commercial data to derive representative performance indicators—is supported by previous studies, which also compiled data from both academic sources and manufacturers to establish benchmark values for an HTHP [46,47]. This will improve the reliability of the outcome and support the sensitivity stage after the modelling.

3.2. Technology Assessment—Hydrogen to Heat

Data for hydrogen burners or boilers were collected from a range of commercial boilers from the literature as well as industrial data sheets. In the data screening, only those entries that are labelled as hydrogen-ready and capable of fuel switching are included. This technology provides flexibility to the solution to be fully fed either by gas (the business as usual) or hydrogen (a long-term horizon of 2050), as well as the transitional stage where industry can benefit from blending with natural gas. As shown in Figure 2, the blending ratio from all the sources of data ranges from 5% to 100%, but the median is 20% vol%, which stems from the small-scale hydrogen-ready boilers for buildings. In the present study, it is assumed that the specification data, i.e., the efficiency of the referenced boilers and burners, are also valid for systems operating on 100% hydrogen, and can therefore be used in Equation (8). Larger industrial boilers have adaptability to be fed by a larger H₂ content up to 100%. In the same way, the temperature ranges from 90 to above 2040; the lower limit stands for home boilers, while the upper limit is the hydrogen flame temperature. The corresponding water or steam capacity as well as heat output and NOx emissions are also reported for more than 220 boilers and burners [48,49,50,51,52,53,54,55,56,57,58,59,60,61,62,63,64,65,66,67].

3.3. Technology Assessment—Power to Hydrogen

Extensive data collection is carried out, drawing on a range of electrolysers available on the market. Data collection includes electrolysers in various scales and technologies—namely, ALK, PEM, and AEM with TRLs of 7 to 10 [68]. Figure 3 presents a comparative performance summary of more than 240 electrolysers, compiled from the literature and commercial sources [69,70,71,72,73,74,75,76,77,78,79,80]. This assessment explores a range of capacities of electrolysis units from the lab to the industrial scale. The electrolyser KPI includes the specific energy consumption required for technical analysis in the overall framework, found to be 55 kWh per kg of hydrogen production, which can be used in Equation (5). Additional analysis is also provided in this figure for the power input as well as the H₂ production, which can inform future scale-up and storage assessments.

3.4. Technology Assessment—Heat Upgrading

Another technology with a key role to play is the heat pump for heat upgrading–including conventional air-source or ground-source HPs with TRLs of 9 to 10 [68], which usually operate below 100 °C, and high-temperature HPs with TRLs of 7 to 8 [68], which are more suitable for industrial needs. However, the main focus of this assessment is on HTHPs; as can be seen in Figure 4, the heat output starts from 100 °C and can reach up to ~280 °C, with a mean value of ~130 °C. Referring to the literature [81,82,83,84,85,86,87,88,89,90,91,92,93,94,95,96,97,98,99,100,101,102,103,104,105,106,107,108,109,110,111,112,113,114,115,116,117,118,119,120,121,122,123,124,125,126,127,128,129], the COP of HTHPs spans from 1 to 7, with a mean value of ~3.49, which is considered an input for Equation (3). It is worth noting that the temperature lift, internal layout, thermal fluid, and source temperature for each of the literature sources may vary, but expanding the size of the database allows for reaching reliable and valid KPIs, essential for the next stage of assessment in the present research.

3.5. Technology Assessment—Heat to Power

Another part of the energy conversion chain is heat-to-power technology. The ORC is chosen as a mature enough technology with a TRL of 9 to 11 [68], capable of recovering low-, medium-, and high-temperature heat for power generation. Several investigators have identified ORC as a potential solution for various types of WH sources in different industries, ranging from exhaust gas of power generation to exhaust gas of onboard energy systems. The summary of reported values in the literature is illustrated in Figure 5, representing the KPI for ORC technology, which includes approximately 45 references in the database, where the average thermal efficiency is estimated at approximately 13%, which can inform the next level of assessment using Equation (5). Moreover, the capacity range is also demonstrated from a kW to an MW scale, which can support future assessment for solution scale-up. The source temperature range also provides detail for the technical requirement for the thermal loop design when transferring WH to the ORC. It is worth noting that in industries with WH at >300 °C, it does not necessarily mean that the ORC is directly exposed to the high-temperature WH, but the heat is exchanged from a high-temperature WH source to the ORC through a closed loop circulating a heat transfer fluid.

3.6. Industrial Heat and Waste Heat Assessment—EU Scale

The success of the proposed low-carbon heating solution largely depends on WH availability and the WHP in the target sector—EU industries. A dedicated assessment is conducted to determine how much heat is needed and to clarify the process heat demand at the EU scale, which is found to be in the range of 1400 to 2400 TWh per year, with an average of 1861 TWh [177,178,179,180,181,182,183,184]—see Figure 6. An additional literature survey is carried out to complement the previous part—determining the WHP percentage in industry. The WHP percentage in the literature varies by industrial sector; it tends to be higher in the iron and steel industry. However, the assessment considers the overall range, and the mean value is estimated at 14.2% for the entire EU industries, considering several references [185,186,187,188,189,190,191,192,193]. Assuming that this fraction of the total process heat is waste heat, the amount is estimated to be ~261 TWh, which aligns with findings from a WH assessment conducted by the European Commission [194].

3.7. System Assessment—Energy Flow Analysis

To better describe the system and comparatively analyse the interconnection of the technologies, the Sankey diagram of a baseline scenario is demonstrated in Figure 7, where, as discussed before, the HTHP delivers the heat, benefitting from the LT-WH, while the remaining is fed into the ORC, followed by electrolysis, to support the hydrogen demand required for topping up the heat to reach higher temperatures if required. It is evident that the share of WH taken from the electrolyser itself is negligible; furthermore, the contribution of hydrogen generated through the WH-to-electrolyser pathway can only be meaningful when supplemented by external H₂ sources.

3.8. System Assessment—Sensitivity Analysis

So far, the model shows a contribution to low-carbon heating driven by WH, on-site electrolysis, as well as external sources of green power from the grid and green hydrogen from the network. It is necessary to determine which parameters have the greatest impact and assess uncertainties in the input data and assumptions. A sensitivity analysis is conducted with a focus on nine inputs or assumptions, including (a) parameters related to WH sources: WHP and waste heat temperature, the share of medium-temperature waste heat (MT-WH) and high-temperature waste heat (HT-WH) with a temperature >100 °C within the total WH, as well as the WH from the electrolysis process; (b) inputs related to external sources, such as the ratio of the H₂ network to the H₂ generated on-site; and (c) the technical performance of the involved technologies, including the efficiency of the hydrogen burner and ORC, specific energy consumption of the electrolyser, and COP of the HTHP. The range of variation in parameters is not the same but is based on practical and feasible ranges in industry. In particular, the ranges of variation in WH and associated input parameters are taken from Section 3.6. In the same way, the ranges of efficiency and performance of technologies are taken from the previous assessment in Section 3.2, Section 3.3, Section 3.4 and Section 3.5. The sensitivity outcomes are presented in Figure 8, in which parameters are ranked by order of impact. The WH potential is found to have the greatest impact, and it is considered wide enough to be valid for a range of parameters, i.e., low WH potential, like in the textile and leather sector in the EU, or high WH potential, like in iron and steel as well as chemical and petrochemical sectors [27]. The contribution of external H₂ also plays a key role in meeting the heat demand. In particular, when increasing the external-to-internal hydrogen ratio from 0 to 20, the contribution rises from 8 to 21. The mean WH temperature is also considered to cover the wide range of WH temperatures available in industry from 100 to 1200 °C.

The COP of the HTHP comes next after these two, which highly impacts the contribution of the solution to low-carbon heating. The remaining parameters are less impactful; the least impact is from the WH taken for the electrolysers, which is inherently substantial but relatively small compared to the main WH streams (see Figure 7). The mean contribution of all studied parameters, as determined from the sensitivity analysis is found to be approximately 14% of the process heat demand in the EU industry.

To further explore the impact of parameters, the sensitivity analysis also represents the role of each within two pathways: HTHP for low-carbon heating up to 200 °C, and the hydrogen for higher temperatures. The breakdown of contribution is shown in Figure 9. It is worth noting that the variation in parameters involved in the H₂ pathway, like electrolyser efficiency, has no impact on the HTHP. The mean value of each pathway is found to be 6.7% for hydrogen and 7.6% for the HTHP.

Additional assessment is required to ensure that two-stage heating—comprising initial heating by an HTHP followed by the hydrogen burner—can reliably meet the process heat demand. As the two pathways operate independently, their integration introduces uncertainty from their combined operation, which needs thorough justification. In this context, the feasible temperature at various H₂ network ratios (Equation (7)) is calculated using Equation (10). The temperature and the corresponding contribution to the EU process heat demand are demonstrated in Figure 10. Considering the EU 2050 target for using clean H₂ for heating—which stands at 15 MtH₂/y, equivalent to more than 300 TWh/y of heat [195]—the required H₂ network ratio is determined to be ~10, and the maximum achievable temperature is ~350 °C. However, this is based on the worst-case assumption in which all the required heat is first generated only by the HTHP and then all of it is topped up by the hydrogen burner. In reality, only a fraction of industrial heat demand lies above 200 °C, which will require supplementary heating via hydrogen.

3.9. System Assessment—Policy Alignment

This research and the associated plan for the establishment of the dedicated research pipeline are strategically aligned with the UK Net Zero Growth Plan [20] and the Net Zero Industry Act [196], with a focus on the long-term industrial decarbonisation trajectory and how it can support EU/UK industry in reaching Net Zero targets. This contributes to improving industrial energy efficiency, which brings benefits beyond energy security, by lowering the cost of decarbonisation. Further alignment is also explored in various aspects of energy infrastructure, the hydrogen market stage as a key contributor to the proposed solution, as well as the readiness of the technologies involved.

(a) From an infrastructural perspective, the research plan aligns well with the latest developments in the EU hydrogen economy deployment. In particular, the year 2025 will be a milestone in the commissioning of green hydrogen from renewables, as well as blue hydrogen production to serve industrial clusters. All these changes are part of an industry conversion programme, highlighting the role of hydrogen and the growing focus on it in supporting deep decarbonisation, alongside the integration of mature solutions such as carbon capture. Moreover, the EU hydrogen roadmap [18] outlines a development timeline in which the hydrogen infrastructure will reach the industrial clusters in four phases from 2022 to 2037. In this context, the proposed research plan for finding efficient and cost-effective methods for hydrogen utilisation in industry aligns with the completion of the infrastructural development [197].

(b) From an economic standpoint, the levelised cost of green hydrogen production is reported to be almost twice that of hydrogen from natural gas reforming, which means it is not yet cost-competitive. However, the global ambition to develop the hydrogen economy is expected to change the green hydrogen market. The green hydrogen production outlook is already considered in research planning. The current cost of an installed electrolyser (including the equipment, gas treatment, plant balancing, and engineering, procurement, and construction costs) is in the range of EUR 1400–EUR 1700/kW, and the projected cost is estimated to fall as low as EUR 500/kW by 2030 [198]. The lower cost of the electrolyser, along with the development of renewable energy source (RES) availability and infrastructure, impact the cost of green hydrogen production, which is currently three times more expensive than producing grey hydrogen, but is projected to become much cheaper, at an estimated EUR 1–2/kgH₂ [199,200] by 2035. Globally, green hydrogen is expected to reach cost parity with blue hydrogen within the next decade [201]. This reduction in cost is well reflected at the industrial scale by the bids submitted in April 2024 to the first EU-wide auction for renewable hydrogen, which ranged from EUR 0.37 to EUR 4.50/kg of renewable hydrogen, where the winning bidders plan to produce 1.58 Mt of H₂ over ten years [202].

(c) From a technological perspective, considering the expected advancement of ongoing research and development from a 10-year perspective, the analysis also reveals the potential in current and future timeframes. For example, hydrogen-ready boilers and burners are gaining maturity in utilising pure or blended hydrogen and reaching the fully commercialised stage, and HTHP technology is expected to be at a ready-to-deploy stage, being adapted at scale. This is fully aligned with the UK call for evidence on ‘hydrogen-ready’ industrial equipment in 2022 detailed in the UK Hydrogen Strategy [26]. As discussed in Section 3.2, Section 3.3, Section 3.4 and Section 3.5, most of the technologies involved are at TRLs 8 to 10. The main challenge for scaling up the solution is the electrolysers, which due to high market demand, are struggling with a 3- to 4-year lead time in supply [13]. According to the IRENA report from 2020, the fifth generation of electrolysers is being introduced, where upscaling from MW to GW scale takes place, with lower costs, higher durability (>50,000 h), and higher efficiency, which requires technological breakthroughs [26].

3.10. Economic Assessment

The full potential of the proposed solution can only be realised if its competitiveness is justified against the alternatives. In this context, LCOH (see Section 2.3) is evaluated for all involved heating technologies, namely an HTHP, hydrogen heating, and electric heating. As the solution targets decarbonisation of the EU industries, heating solutions based on fossil fuel, gas, or coal are no longer included in the discussion or comparison. The cost-competitiveness calculation results are shown in Figure 11, in which the HTHP has the lowest LCOH; however, the technological capability is limited by its upper temperature limit. The analysis considers two hydrogen heating approaches: one is the hydrogen supplied from a pipeline distribution network, while the other is hydrogen generated by on-site electrolysis.

The LCOH for external hydrogen is found to be much higher than others in 2025 due to the high cost of hydrogen, which is above 6 EUR/kg in the EU. In 2035, it is estimated that hydrogen cost will be as low as ~3 EUR/kg, which will make LCOH more competitive with alternatives and reach levels as low as electric heating. Despite the higher CAPEX of on-site hydrogen generation, due to the cost of WHR and electrolysis technology, this approach comes with significant benefits as it exploits the waste heat, thereby cutting the fuel (H₂) cost. Moreover, regardless of the cost of hydrogen, on-site hydrogen generation is more economically viable than the external hydrogen supply. Yet, waste heat resources are finite and are not sufficiently scalable to meet all industrial heat demand.

Looking at the LCOH of the combined solution (calculated by Equation (14)), which benefits from the full capacity of HTHP, on-site electrolysis driven by WH, and a remaining heat demand fulfilled by external hydrogen and electric heating, it is worth noting that while the LCOH is close to that of electric heating, hydrogen’s role in industrial heating stems from its high-temperature capabilities, essential for industries that require temperatures above 400 °C, such as cement, aluminium, and metal sectors. Moreover, it can replace fossil fuels in many existing combustion systems with minimal adjustment [195,203,204].

Figure 12 complements the previous discussion by showing that in the combined solution, the cost of power and cost of hydrogen dominate the LCOH, forming ~50% of the LCOH. Also, the analysis confirms that the CAPEX component associated with the electrolyser, WHR technology (i.e., ORC), is less impactful than the cost of fuel or power.

4. Conclusions

In the present research, a different approach to low-carbon industrial heating is explored, which stands out from existing hybrid solutions in four key respects: (a) the integration of advanced technologies with significant market potential in ten years; (b) a hybrid heating process where technologies play complementary roles, distinct from hybrid designs for residential heating, which operate in alternating modes; (c) WH utilisation, boosting power supply and thermal efficiency; and (d) decentralised hydrogen generation, minimising the reliance on external supply chains.

• The results point to a potential contribution of the low-carbon, WH-driven combined heating solution in meeting the process heating demand in EU industry of ~14%, with the following key findings:
• The analysis using the WHR model revealed that the breakdown of contribution is ~6.7% from the hydrogen pathway and ~7.6% from the HTHP. The contribution could support and accelerate progress in the electrification of heating. However, given the projected green hydrogen production capacity in the EU by 2035 and 2050, this solution cannot offer a replacement for electrification, though it can play a key complementary role.
• The most critical parameters through the combined solution, as found through the sensitivity analysis, are WH potential (highly dependent on the nature of the process and industrial sector), temperature of the WH, COP of the heat pump, and share of high-grade WH within the total WH.
• The hydrogen pathway benefits from the hydrogen intake from the future hydrogen infrastructure, supporting the achievement of higher temperatures. The base scenario integrates an HTHP for heat upgrading of low- and medium-temperature WH and delivery up to ~200 °C, with the hydrogen burner providing top-up heat. Without hydrogen intake, the temperature can reach 210 °C; however, including green hydrogen uptake from the network allows the system to fully meet industrial requirements, reaching much higher temperatures—i.e., 700 °C.
• The solution offers industry flexibility in process heating, which stems from the diversity of energy sources (green hydrogen, renewable power, and WH). It is also a technically viable solution for the transition phase, since hydrogen-ready systems are compatible with natural gas, hydrogen, or their blends. As a result, the solution can be deployed under a business-as-usual gas supply scenario and gradually adapted as hydrogen infrastructure expands to reach industrial clusters, enabling a smooth energy transition towards a Net Zero industry.
• The LCOH of the combined solution is competitive with the direct electrification of heating; however, integrating a WHR-driven HTHP and on-site electrolysis enables industries requiring high-temperature heating to more effectively benefit from hydrogen heating technologies and also helps reduce costs.

This solution reveals the potential of an integrated approach to WHR in industry, which can act as a driver of low-carbon heating. The maturity of the involved technologies—namely, HTHP, ORC, electrolysers, and hydrogen burners—is close to market uptake, meaning they can be considered a “ready for deployment” (early commercialisation) solution for transitioning from fossil fuel-driven process heating to low-carbon solutions.