Green process heat instead of permanent subsidies

13.08.2025

Source: E & M powernews

A Prognos study for Deneff shows: Green process heat is growing and offers potential for jobs, exports and climate targets - but politicians must set the right course.

Although industrial process heat accounts for 23 percent of the total final energy consumption for heat nationwide, it is hardly given any attention by politicians, criticizes Christian Noll. "Process heat is the forgotten half of the heat transition," says the Managing Director of the German Business Initiative for Energy Efficiency (Deneff). Germany is still not exploiting its efficiency potential. "However, process heat has a very clear impact on competitiveness, Europe's industrial sovereignty and climate targets," he points out.

Prognos investigated the potential that lies dormant in this segment and presented the study entitled "Market analysis: Net-Zero technologies for energy-efficient process heat" together with Deneff on August 13. According to the study, industrial process heat is developing into one of the most dynamic segments of the German green tech sector. It is responsible for around two thirds of final industrial energy consumption and causes almost 90 percent of combustion-related emissions in industry - but has so far been generated using fossil fuels for over 75 percent.

According to a study by the Niederrhein University of Applied Sciences, which Deneff presented last year, efficiency measures and climate-neutral technologies could significantly reduce industrial energy consumption (we reported). Around half of the process heat could be saved economically, which corresponds to a third of the total industrial energy requirement. For companies, this means an annual savings potential of around 21 billion euros - which could significantly increase their competitiveness.

According to the latest Prognos study, the green process heat sector currently generates around 5.5 billion euros annually and employs over 60,000 people in Germany - an increase of more than 70 percent since 2010. The industrial heat pump sector is growing particularly strongly at 13.3 percent per year. Installation and consulting services as well as process control and I&C technology are other key areas.

Export revenue has more than doubled since 2010, reaching over 1 billion euros in 2023. The most important customers are Switzerland, the Netherlands and Austria. Worldwide, the heat pump sector is considered the most important and dynamic segment, accounting for the largest share of global market growth.

The Prognos analysis assumes strong market growth if climate targets are met: Gross value added in Germany could rise to around 25 billion euros by 2030, with around 270,000 employees. By 2050, the market volume could increase tenfold to 91 billion euros, with up to one million employees.

"Permanent subsidies are not a solution"

However, Noll emphasized: "Efficiency measures are not a sure-fire success." In addition, subsidized energy prices without ecological compensation would reduce efficiency incentives. In his opinion, "permanent subsidies cannot be the solution." Politicians should focus much more on energy productivity and thus efficiency measures instead of just curbing energy prices. Process heat is a very good starting point here. And according to Deneff, there is a double competitive advantage: firstly, companies could export efficiency solutions "Made in Germany", and secondly, efficiency measures would reduce the need for subsidies.

Deneff is therefore calling for industrial policy stimuli, targeted funding, an accelerated grid connection and a clear strategy for the decarbonization of process heat. Only in this way can Europe's technological leadership be defended and expanded, emphasizes Managing Director Christian Noll.

The short study "Market analysis: Net-Zero technologies for energy-efficient process heat" is available online.

The Prognos study "Market analysis: Net-Zero technologies for energy-efficient process heat" summarizes:

• Value creation in the green process heat sector has grown by an average of almost 7 percent per year since 2010. Particularly dynamic: industrial heat pumps with 13.3 percent annual growth.
• The number of employees has risen by around 70 percent since 2010 - to currently around 60,000 people.
• Exports of green industrial process heat technologies from Germany have doubled to over 1 billion euros since 2010. The most important customers are Switzerland, the Netherlands and Austria.

Author: Heidi Roider