Europe is at a crossroads in its quest to meet ambitious climate goals. Industrial emissions, which contribute 20% of the continent’s greenhouse gases, must be drastically reduced — by 90% by 2040 — to align with the European Union’s net-zero target for 2050.
The main emission source stems from fossil fuels burned to generate heat for industrial processes, from cement production to food manufacturing. Transitioning to clean alternatives is essential, with electrification showing the most promise.
Despite its potential, the pace of industrial electrification is worryingly slow. Industrial carbon emissions decreased by just 8% over the past decade, a rate far too sluggish to reach Europe’s climate neutrality targets.
Currently, only 3% of industrial heat processes are electrified, but studies reveal enormous potential. A full 60% of industrial heat demand could be met through existing technologies.
By 2035, as high-temperature solutions advance, this figure could reach 90%. Europe, already a leader in clean technology innovation, can build on its strengths in areas like large-scale heat pump production to drive this transformation forward.
Benefits of industrial electrification abound
Beyond emissions reductions, electrification brings economic and operational advantages. Electric systems, such as industrial heat pumps, arc furnaces and induction heating, can deliver greater efficiency and precision than their fossil-fuel counterparts. Reducing energy waste and improving process control and workplace safety through induction heating, for example, can offer rapid and localised heating with exceptional accuracy, which is critical in industries like metalworking.
Electrification also eliminates the need for on-site combustion of fuels, reducing risks associated with open flames, flammable gases or carbon monoxide leaks.
The challenges
Despite these clear benefits, several challenges have hindered widespread adoption of heat electrification solutions.
Financial concerns are a major barrier; the upfront investment costs and uncertainty around future electricity and carbon prices have slowed investment.
Industrial facilities can lack sufficient grid connections to support electrification, and upgrading infrastructure can be complex. Knowledge gaps compound the problem, as many companies remain unaware of the available technologies and their suitability.
Some high-temperature processes present an additional technological challenge, as existing electrification solutions are not yet commercially viable at scale.
Policy mix offers best solutions
Addressing these obstacles requires a comprehensive and strategic approach, as our new report shows.
Targeted and stable policy support for electrification is a key first step. By including industrial electrification as a central component of the EU’s Electrification Action Plan and Clean Industrial Deal, EU policymakers can signal the urgency of this transition.
Setting ambitious but achievable electrification targets, such as aiming for 60% electrification of industrial heat by 2050, would provide industries with a clear roadmap for investments. Tightening standards for new installations, particularly for low-temperature processes where electrification solutions are commercially available, could also accelerate progress.
Economic measures are equally critical. Essential steps include rebalancing energy taxes and levies to make electricity more competitive with fossil fuels, providing support such as grants and low-interest loans, addressing electricity pricing and ensuring that EU State Aid guidelines permit support for electrification projects.
Infrastructure challenges can be tackled through coordinated grid planning that considers the needs of industrial users. Ensuring adequate capacity and encouraging flexible electricity consumption practices through time-varying network tariffs can optimise resources and reduce costs.
Measures such as cable pooling, which allows multiple industries to share grid connections, can further lower infrastructure expenses.
Europe urgently needs to close the knowledge gap: Policymakers can support studies of the economic benefits of electrification. Engineering assistance programmes can support small- and medium-sized enterprises making the shift. Disseminating best practices and providing training opportunities will also drive home the long-term benefits of electrification.
Finally, investment in research and development is essential to overcome technological barriers. High-temperature electrification solutions, including advanced plasma burners and hybrid furnaces, need continued support to become commercially viable. EU funding programs prioritising these innovations, especially with streamlined application processes, can help ensure even small-scale operations have support.
Decarbonisation strengthens Europe’s competitiveness
Industrial electrification is not merely a necessity for achieving climate goals; it offers an opportunity to redefine Europe’s industrial sector. Decarbonising industry can make Europe a global leader in clean technology, boosting economic competitiveness and capitalising on its dominant position in large heat pump manufacturing.
By acting decisively and swiftly to address the financial, infrastructural and technological barriers, policymakers can accelerate electrification and unlock its vast potential. Industrial electrification is not just a tool for reducing emissions — it is a cornerstone of a sustainable, competitive and resilient future.
A version of this article originally appeared on Euractiv.
Photo: Olesia_Ru via Shutterstock
