Industrial decarbonisation is often framed through solutions that promise deep emissions reduction, e.g. green hydrogen and carbon capture. These pathways are essential, particularly for hard-to-abate sectors, but are still several years away from large-scale adoption

Industry accounted for nearly half of India’s final energy consumption in 2025, much of it still tied to fossil fuels. The story becomes even sharper when we look at process heat. The requirement of low-temperature heat and steam (at less than 250 degrees C) forms the backbone for various processes across sectors such as textiles, food processing, chemicals, pharmaceuticals, and paper and pulp. This process heat and steam demand is largely thermal and met through combustion of fossil fuels such coal, oil, and gas. 

The issue becomes critical at two levels. First, the deepening geopolitical uncertainty and volatile domestic supply chains worsens the availability of these fuels. Second, a sizeable chunk of these manufacturing emissions rests within the micro, small, and medium enterprises (MSMEs) predominantly concentrated in sectors such as textiles, food processing and paper. These are the sectors where coal, firewood, biomass, gas and furnace oil continue to run the conventional thermal systems such as boilers, thermic fluid heaters, dryers, evaporators and hot-water systems, etc.

This is why decarbonising industrial heat is not just a climate question but a socio-economic prerogative which further intertwines with other co-benefits such as air quality, cost competitiveness, energy security, and worker well-being.

Heat pumps as a solution

Heat pumps enter this conversation as one of the most practical, scalable and modular technologies for this specific frontier of industrial heat. Unlike boilers, heat pumps do not create heat by burning fuel. They move and upgrade heat from one steam to another, using electricity. This is why they can deliver more useful heat than the electricity they consume.

Industrial heat pumps often have a coefficient of performance of 3 to 5, meaning they can provide three to five units of heat for every unit of electricity consumed. Even at higher output temperatures, where performance falls, they can remain more efficient than simple electric resistance-based heating. This efficiency is the core of their decarbonisation value. It reduces the amount of electricity needed to electrify heat and improves the economics of switching away from combustion. If renewable electricity is available at competitive rates, the effective cost of heat from a heat pump becomes attractive even against conventional fuels as of today also. 

What makes this transition complex is the way industrial heat is currently produced and used. In a typical medium-sized textile finishing unit studied in Surat, around 92% of energy load was thermal, delivered through steam and industrial heat using a mix of Indonesian coal and lignite. The unit consumed roughly 0.42 kg of Indonesian coal per meter of processed fabric, illustrating the material intensity of fuel use embedded in routine operations. Despite this, steam is often used indirectly for generating hot water, maintaining vessel temperature, or heating surfaces rather than directly heating the product.

This reflects a central inefficiency. Conventional industrial thermal systems in such factories are often designed around the highest heat requirement, with boilers sized to meet peak demand. But many loads require lower-quality heat. In such cases, steam is generated at higher temperature and pressure, then reduced or diverted for lower-temperature applications. However, industrial heat pumps follow  a different engineering mindset: start with the lowest-temperature heat demand, then boost heat only where needed. This reverses the legacy boiler approach and can reduce overall energy use by 40-60% in suitable applications.

This right-sizing logic is particularly relevant in brownfield MSME clusters. Many boilers are old, oversized, manually operated in such settings, and run below optimal capacity. Replacing every boiler with a single large electric system is often not practical. But heat pumps can be modular. They can first serve specific loads: pre-heating boiler feedwater, supplying hot water, supporting dyeing and washing processes, recovering waste heat from effluents or reducing steam demand in evaporators and drying streams.

Their role becomes even more prolific when heating and cooling are considered together. Industrial heat pumps can simultaneously generate hot water, steam, or hot air while producing cooling or dehumidified air as a by-product. In food processing and digital textile printing, where process heat is required alongside controlled cooling for process stability and equipment performance, heat pumps can simultaneously supply useful heat while reducing chiller or air-conditioner loads.

Health, safety, emission control

Beyond system efficiency, heat pumps can also improve worker health and safety. Workplace heat exposure is emerging as a serious occupational health risk, especially in labour-intensive factory environments where internal process heat compounds rising ambient temperatures. Globally, over 2.4 billion workers are exposed to excessive heat at work, with the highest exposure rates in Asia and the Pacific. Prolonged workplace heat is linked to heat exhaustion, heart stroke, cardiovascular strain, kidney disease, accident risk, and reduced cognitive performance.

In parallel, combustion-based process heat contributes to emission of harmful air pollutants exacerbating respiratory and cardiovascular health risks. The public health dimension is significant: fossil-fuel-driven air pollution caused an estimated 1.72 million premature deaths in India in 2022, with industrial heat systems being a key source of these emissions. In this context, increasing the use of electrified heating systems such as industrial heat pump technologies, particularly within the temperature ranges in which they are technically feasible can significantly improve air quality, mitigate greenhouse gas emissions and reduce health harms associated with both air pollution and climate change. By displacing on-site combustion and enabling the integration of heating and cooling, heat pumps can create opportunities for spot and space cooling to improve thermal comfort on factory floors.

What emerges, then, is not just a technology shift but a systems transition. Scaling industrial heat pumps will depend on how well they are embedded into existing industrial ecosystems through better process integration, reliable access to low-cost electricity, and financing models that work for industries, especially MSMEs. Done right, it can unlock not just emissions reduction, but a more resilient, efficient, and safer model of industrial growth.

Vrinda Gupta is associate director, Vasudha Foundation, and Srinivas Ethiraj is assistant manager, Vasudha Foundation.