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Waste Heat Recovery System Market

The market for Waste Heat Recovery System was estimated at $87.5 billion in 2025; it is anticipated to increase to $126 billion by 2030, with projections indicating growth to around $182 billion by 2035.

Report ID:DS2410009
Author:Chandra Mohan - Sr. Industry Consultant
Published Date:
Datatree
Energy & Power
Energy Transition
Waste Heat Recovery System
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Report Summary
Market Data
Methodology
Table of Contents

Global Waste Heat Recovery System Market Outlook

Revenue, 2025

$87.5B

Forecast, 2035

$182B

CAGR, 2026 - 2035

7.6%

The Waste Heat Recovery System (WHRS) industry revenue is expected to be around $87.5 billion in 2026 and expected to showcase growth with 7.6% CAGR between 2026 and 2035. Building on this outlook, the Waste Heat Recovery System market is consolidating its role as a strategic pillar for industrial energy efficiency and decarbonization, underpinned by tightening emission regulations, escalating fuel costs, and corporate sustainability commitments. Power generation and steam generation applications together account for 70.7% of market demand, reflecting the crucial need to convert high-grade exhaust heat into reliable electricity and process steam across energy-intensive facilities. HRSG technology type remains the dominant configuration, generating approximately $36.32 billion in revenue in 2025 and demonstrating the strong preference for heat recovery steam generators in large-scale utility, refinery, and petrochemical projects. Ongoing investments in advanced controls, digital monitoring, and integration with combined heat and power schemes are further reinforcing the strategic importance of waste heat recovery in long-term emissions reduction roadmaps.

A modern Waste Heat Recovery System captures thermal energy from sources such as gas turbine exhaust, industrial boilers, furnaces, and kilns, and converts it into useful power or steam through technologies including HRSG units, economizers, and organic Rankine cycle modules. Its key features include high reliability, modular design, compatibility with existing process equipment, and the ability to enhance process optimization while lowering operating expenditure and carbon intensity. Major applications span power generation, steam generation for process industries such as cement, steel, chemicals, and refining, and integration with district heating networks and sustainable manufacturing initiatives. Recent trends driving demand include smart sensing and analytics for predictive maintenance, the coupling of waste heat recovery with electrification and hydrogen projects, and growing adoption in small and mid-scale plants seeking resilient, low-carbon energy solutions.

Waste Heat Recovery System market outlook with forecast trends, drivers, opportunities, supply chain, and competition 2025-2035
Waste Heat Recovery System Market Outlook

Market Key Insights

  • The Waste Heat Recovery System market is projected to grow from $87.5 billion in 2025 to $182 billion in 2035. This represents a CAGR of 7.6%, reflecting rising demand across Preheating, Power Generation, and Steam Generation.

  • Mitsubishi Heavy Industries, Ormat Technologies, and Thermax are among the leading players in this market, shaping its competitive landscape.

  • U.S. and Germany are the top markets within the Waste Heat Recovery System market and are expected to observe the growth CAGR of 4.9% to 7.3% between 2025 and 2030.

  • Emerging markets including Indonesia, South Africa and Mexico are expected to observe highest growth with CAGR ranging between 8.7% to 10.5%.

  • Transition like Adapting to Advanced Technologies is expected to add $9 billion to the Waste Heat Recovery System market growth by 2030.

  • The Waste Heat Recovery System market is set to add $94.5 billion between 2025 and 2035, with manufacturer targeting Power Generation & Steam Generation Application projected to gain a larger market share.

  • With

    enhanced industrial sustainability, and

    Legislation and Government Incentives, Waste Heat Recovery System market to expand 108% between 2025 and 2035.

waste heat recovery system market size with pie charts of major and emerging country share, CAGR, trends for 2025 and 2032
Waste Heat Recovery System - Country Share Analysis

Opportunities in the Waste Heat Recovery System

Rapid expansion of gas-fired power generation in Asia is also creating substantial demand for Heat Recovery Steam Generator based Waste Heat Recovery System solutions. Globally, HRSG revenue is projected to increase from $36.32 billion in 2025 to $50.00 billion by 2030, growing at 6.6% CAGR, with a strong pull from combined cycle plants. Untapped opportunities lie in retrofits of aging turbines, integrated cogeneration, and process optimization for industrial decarbonization, where HRSG applications are expected to remain the fastest-growing utility-scale segment globally.

Growth Opportunities in Asia-Pacific and Europe

In Asia-Pacific, the Waste Heat Recovery System market is shaped by rapid industrial expansion and tightening energy-intensity mandates, with Power Generation emerging as the most influential application as plants convert high- and medium-grade industrial waste heat into waste heat to power for captive use and grid support. Top opportunities concentrate in large cement, steel, and petrochemical complexes, where integrating advanced heat recovery technologies such as organic Rankine cycle platforms and high-efficiency boilers enables process heat optimization and supports national decarbonization initiatives. Additional growth potential lies in mid-sized manufacturing clusters in India and Southeast Asia, where combining steam generation and preheating within integrated waste heat recovery solutions can replace conventional fuel-fired boilers and improve overall energy efficiency systems. Competitive dynamics are intense, with a mix of global OEMs, regional boiler manufacturers, and EPC contractors positioning bundled cogeneration systems and WHRS packages; differentiation increasingly depends on lifecycle performance guarantees, modular skid-mounted designs suited to space-constrained brownfield sites, and digital monitoring that maximizes availability in harsh operating environments. Strategic regional expansion should prioritize power-generation-focused Waste Heat Recovery System portfolios tailored to cement kilns, blast furnaces, and refinery crackers, while also developing cost-optimized platforms for flue gas heat recovery in secondary industries, leveraging local fabrication, long-term service contracts, and collaborative financing models to overcome upfront capital barriers.
In Europe, the Waste Heat Recovery System landscape is strongly influenced by carbon pricing, stringent efficiency regulations, and energy security concerns, with Preheating holding the highest relevance as energy-intensive manufacturers prioritize flue gas heat recovery, combustion air preheaters, and feedwater preheating to cut fuel consumption and emissions. The most attractive opportunities involve retrofitting existing plants in cement, glass, chemicals, and pulp and paper with compact, corrosion-resistant waste heat recovery solutions that integrate seamlessly with existing burners, boilers, and district heating networks, while emerging applications link low- and medium-grade heat to absorption chillers for industrial Cooling & Refrigeration. Competition is fragmented, featuring specialized heat-exchanger suppliers, process OEMs, and engineering firms that compete on efficiency, footprint, and reliability rather than pure equipment cost, with procurement often driven by verifiable emissions reductions and payback criteria. To capture share, suppliers should position their Waste Heat Recovery System offerings around high-performance preheating and steam generation modules engineered for complex, multi-stream industrial processes, emphasizing digitalized performance analytics, compatibility with future fuel-switching strategies, and turnkey integration with plant-wide energy efficiency systems. Investment focus should target innovative heat recovery technologies for low-temperature exhausts, advanced sealing and materials solutions for corrosive flue gases, and standardized WHRS packages that enable rapid deployment across multiple facilities under corporate decarbonization initiatives.

Market Dynamics and Supply Chain

01

Driver: Rising Industrial Energy Costs Coupled with Increasing Environmental Regulations Driving Waste Heat Recovery Adoption

The waste heat recovery system market is also strongly driven by rising industrial energy costs and increasing environmental regulations. Escalating fuel and electricity prices have also prompted industries such as steel, cement, and chemical manufacturing to adopt technologies that minimize energy wastage. By capturing and reusing exhaust heat, waste heat recovery systems lower operational expenses and improve process efficiency. Simultaneously, stricter environmental standards worldwide are also pushing companies to reduce greenhouse gas emissions and carbon footprints. Waste heat recovery systems enable compliance by utilizing excess thermal energy instead of venting it, thereby reducing fuel consumption and emissions. These twin pressures economic and regulatory encourage large-scale deployment of technologies like economizers, heat exchangers, and heat recovery steam generators, creating sustained market growth and improving sustainability in industrial operations.
also advances in high-efficiency heat exchangers, modular designs, and digital monitoring systems are also significantly boosting the adoption of waste heat recovery systems. New materials and designs enable higher thermal efficiency, allowing systems to capture lower-temperature exhaust streams effectively. Integration with IoT-based monitoring and predictive analytics helps operators optimize heat recovery, reduce downtime, and improve system lifespan. These technological developments make waste heat recovery solutions more viable for diverse industries, including power generation, petrochemicals, and cement, driving broader market penetration and operational benefits. By enhancing performance and ROI, technological innovation remains a primary driver for the market’s continued expansion.
02

Restraint: High Initial Capital Costs and Long Payback Periods Limit Waste Heat Recovery Deployment

Waste heat recovery systems often require substantial upfront investment for equipment like heat recovery steam generators, economizers, and custom heat exchangers. Many industries delay projects due to long payback periods, especially when energy prices are volatile. For example, smaller manufacturers may defer installing recovery systems because internal rates of return don’t meet corporate thresholds. This restraint reduces project volume and slows market revenue growth, particularly in developing regions where financing options or incentives are limited. As a result, demand remains concentrated among larger players with stronger balance sheets.
03

Opportunity: Organic Rankine Cycle Waste Heat Recovery Systems in Europe and WHRS for North American Cement and Steel

Europe’s stringent carbon emission reduction targets are accelerating adoption of Organic Rankine Cycle based Waste Heat Recovery System solutions for low- to medium-temperature industrial waste streams. ORC technology revenue is forecast to rise from $18.73 billion in 2025 to $30.72 billion by 2030, at a leading 10.4% CAGR. Biggest untapped potential lies in smaller chemical, food, and paper plants, where modular Organic Rankine Cycle (ORC) units for cogeneration and renewable energy integration are expected to outpace all other technology types in growth significantly.
Energy-intensive cement and steel producers in North America are under pressure to improve energy efficiency and cut emissions, opening strong prospects for WHRS deployment. Waste heat boiler revenues globally are projected to grow from $24.16 billion in 2025 to $34.52 billion by 2030, at 7.4% CAGR, largely driven by heavy industry. Untapped potential lies in retrofit projects and integrated process optimization, where waste heat boilers for clinker coolers and basic oxygen furnaces are expected to be the dominant growth application.
04

Challenge: Technical Integration Challenges and Operational Complexity Deter System Adoption at Scale

Integrating waste heat recovery systems into existing plants can be technically complex, requiring bespoke engineering and potential process modifications. Compatibility issues with aging infrastructure, space constraints, and the need for skilled operators raise implementation risk and cost. For instance, retrofitting heat recovery equipment into older facilities may disrupt operations and extend downtime, deterring investment. These technical barriers limit broader adoption in sectors like food processing or textiles where energy streams vary, ultimately dampening market expansion and slowing technology standardization.

Supply Chain Landscape

1

Heat Recovery Boilers

Mitsubishi Heavy IndustriesIHI Corporation
2

System Integration

Thermax LimitedClyde Bergemann Power Group
3

ORC Systems

Ormat TechnologiesMitsubishi Heavy Industries
4

Industrial Applications

Waste Heat Recovery System retrofitsIndustrial waste heat processes
Waste Heat Recovery System - Supply Chain

Use Cases of Waste Heat Recovery System in Preheating & Power Generation

Preheating : Waste heat recovery systems are widely used for preheating processes in industries such as cement, steel, and chemical manufacturing. Economizers and recuperators are commonly employed to capture low- to medium-temperature exhaust heat and preheat boiler feedwater, combustion air, or raw materials. By reusing this thermal energy, companies reduce fuel consumption, enhance energy efficiency, and lower operating costs. For instance, in steel plants, exhaust gases from furnaces are directed through heat exchangers to preheat incoming air, improving combustion efficiency. Preheating not only reduces energy expenditure but also minimizes greenhouse gas emissions and improves overall process sustainability.
Power Generation : In power generation applications, waste heat recovery systems such as waste heat boilers and combined cycle systems convert excess thermal energy from industrial exhausts or gas turbines into electricity. These systems are deployed in manufacturing plants, refineries, and thermal power stations to capture heat that would otherwise be wasted. By producing electricity from residual heat, facilities reduce dependence on external power sources and improve overall energy efficiency. For example, gas-fired plants often integrate HRSG (Heat Recovery Steam Generators) to recover turbine exhaust heat, enabling additional power output without increasing fuel consumption.
Steam Generation : Waste heat recovery systems also support steam generation, particularly in process industries requiring high-temperature steam, such as refineries, paper mills, and food processing plants. Heat recovery steam generators and waste heat boilers are commonly utilized to transform hot exhaust gases into high-pressure steam. This steam can be used directly for industrial processes or for electricity generation in a cogeneration setup. By leveraging waste heat for steam production, companies reduce fuel costs, increase energy efficiency, and enhance environmental performance. For example, chemical plants often recycle furnace flue gases to generate process steam, ensuring sustainable operations.

Recent Developments

Recent developments in the waste heat recovery system market reflect strong momentum in industrial energy efficiency and carbon reduction initiatives. Manufacturers and utilities increasingly deploy heat recovery steam generators, economizers, and heat exchangers to capture exhaust heat from furnaces, turbines, and boilers to lower fuel costs and improve overall energy performance. A key trend is integrating digital monitoring and predictive analytics, which enhances system optimization and enables proactive maintenance. This supports broader adoption of WHRS across steel, cement, and petrochemical sectors while aiding sustainability goals.

October 2025 : Mitsubishi Heavy Industries Thermal Systems launched the ETI‑W centrifugal heat pump, a waste heat recovery‑enabled product supplying high‑temperature hot water (up to 90 °C) for industrial and commercial processes, enhancing its waste heat utilization offerings.
September 2024 : Ormat Technologies secured a significant contract in 2024 to supply organic Rankine cycle‑based waste heat recovery systems to a large industrial petrochemical complex, expanding its presence in utility‑scale industrial energy efficiency deployments. This contract reflects strong demand for ORC technology as a waste heat recovery solution in heavy industry.

Impact of Industry Transitions on the Waste Heat Recovery System Market

As a core segment of the Energy Transition industry, the Waste Heat Recovery System market develops in line with broader industry shifts. Over recent years, transitions such as Adapting to Advanced Technologies and Emergence of Sustainable Practices have redefined priorities across the Energy Transition sector, influencing how the Waste Heat Recovery System market evolves in terms of demand, applications and competitive dynamics. These transitions highlight the structural changes shaping long-term growth opportunities.
01

Adapting to Advanced Technologies

The rapid adaptation to advanced technologies is transforming the WHRS market from incremental optimization to a major value-creation driver, projected to contribute an additional $9 billion to market growth by 2030. AI- and IoT-enabled waste heat recovery solutions are unlocking higher industrial energy efficiency through real-time monitoring, advanced controls, and predictive maintenance, cutting unplanned downtime while maximizing thermal energy capture. Concurrently, innovations in heat exchanger design, advanced materials, and integrated thermal energy storage are raising system efficiency thresholds across process industries. This technology-led shift is repositioning WHRS deployments from cost-saving add-ons to strategic assets that support decarbonization, margin expansion, and long-term competitiveness, thereby accelerating large-scale adoption and premiumization across the global value chain.
02

Emergence of Sustainable Practices

The waste heat recovery system industry is experiencing a significant shift due to the emergence of sustainable practices across industrial sectors. Companies in steel, cement, chemical, and power generation industries are increasingly adopting WHRS to reduce carbon emissions and improve energy efficiency. By capturing and reusing heat from exhaust gases or industrial processes, these systems lower fuel consumption, cut operational costs, and support corporate sustainability goals. For example, cement plants using WHRS can preheat raw materials while reducing CO2 output, and steel manufacturers recover furnace heat to generate steam for process needs. This transition underscores the growing role of energy-efficient solutions in promoting environmental responsibility and operational resilience across industries.