Europe’s industrial sector is operating under increasing pressure. Energy costs remain elevated and volatile, while the cost of emissions and regulatory requirements continue to impact overall competitiveness.
Geopolitical tensions add further uncertainty, making planning and cost predictability more difficult.
Much of the response has focused on expanding energy supply through renewables, electrification, carbon capture, and diversification of energy sources, many of which are still in early stages of deployment or require significant time and capital to implement at scale.
Improving how energy is used within existing processes is one of the most immediate and practical ways to address both cost and emissions challenges.
A significant and often underutilized opportunity exists within industrial processes, where a large share of energy is lost as heat through exhaust gases, cooling systems, and other parts of the process. Recovering this energy via waste heat-to-power technologies offers a practical way to turn previously unused heat into valuable electricity, improving efficiency and reducing overall energy demand.
Rising Energy Costs and the Global Competitiveness of European Industry
European industry continues to face structurally higher energy costs than in the past.
While prices have stabilized from peak levels, they remain above historical norms. In parallel, increasing shares of intermittent generation are contributing to greater short-term price fluctuations, including periods of both high prices and excess supply.
At the same time, geopolitical developments continue to influence global energy markets, contributing to volatility and increasing pressure on industrial cost structures, while evolving regulatory frameworks add further complexity to long-term planning and investment decisions.
Together, these factors are shaping the true cost of energy for industrial operations and the global competitiveness of European industry.
Industrial electricity prices in the EU-27, USA, UK, Japan, Canada and South Korea (EUR2023/MWh)
Comparison of industrial electricity prices across the EU, UK and major global economies, illustrating the higher cost environment faced by European industry and its impact on global competitiveness.
Source: European Commission (2025), Study on Energy Prices and Costs – 2024 edition. Data: Trinomics, Enerdata, Eurostat, S&P Platts.
Energy Efficiency as an Immediate Lever
Long-term solutions such as electrification, carbon capture, and alternative fuels are progressing, but often depend on infrastructure, policy development, and significant investment.
In contrast, certain efficiency improvements can be implemented within existing systems and deliver more immediate impact.
In many industrial applications, a significant portion of the energy used in the primary process is not fully utilized, leading to both higher costs and unnecessary emissions. As energy and emissions costs rise, the impact of this inefficiency becomes more material.
This unutilized energy can be recovered in a cost-efficient way to deliver measurable improvements without requiring changes to core processes.
Waste Heat Recovery in Industrial Processes
Waste heat recovery refers to the process of capturing and reusing this heat energy that would otherwise be lost in industrial operations. In many applications—particularly in engine-based systems and certain industrial processes—more than 50% of input energy is rejected as heat through exhaust gases, cooling systems, and other process streams rather than being converted into useful output.
For example, in engine-based power systems, a large share of fuel energy is lost through exhaust gases and engine cooling water. In chemical production processes, heat is used to drive reactions but is only partially utilized before being rejected.
This represents energy that has already been paid for but is not contributing to output. Recovering part of this energy increases overall system efficiency and reduces the need for additional energy input. These heat streams are often continuous and predictable, making them a reliable source for baseload electricity production.
Converting Waste Heat into Electricity with ORC Technology
Organic Rankine Cycle (ORC) systems enable the conversion of low-temperature waste heat into electricity.
Historically, electricity generation from waste heat has focused on high-temperature heat, primarily using steam turbines and, in some cases, high-temperature ORC systems. These applications are well established in power generation and certain industrial processes.
In contrast, lower-temperature heat is more difficult to utilize effectively and is therefore often left unused. While some of it can be recovered for district heating or reused within the process, a significant share remains unutilized.
Low-temperature ORC systems are designed to address this gap by converting this vast resource of available heat into electricity. They can be integrated with existing equipment and use heat that would otherwise be dissipated through coolers, allowing installation without affecting core processes.
These systems can also be deployed alongside other solutions, including district heating, depending on site conditions. As a result, they provide a practical way to improve efficiency using existing infrastructure.
ORC technology is commercially available today and can be implemented immediately. It also complements future energy systems by improving efficiency regardless of how primary energy is supplied.
Case Study:
Recovering Waste Heat in PET Resin Production
At NEO GROUP’s PET resin production facility in Klaipėda, Lithuania, excess low-temperature heat from the production process was previously released through cooling systems without being utilized. By integrating a Climeon HeatPower 300 system, this waste heat is now converted into electricity—improving overall energy efficiency without impacting core operations.
This is a typical example of industrial waste heat recovery applied in energy-intensive manufacturing.
Key Results:Â
- ~2,700 MWh of electricity generated annually
- ~€250,000–300,000 in annual energy cost savings
Impact on Cost, Emissions, and Competitiveness in a Changing Regulatory Environment
Improving energy efficiency affects both energy use and emissions.
For industrial facilities, on-site energy recovery reduces reliance on externally sourced electricity, lowering both energy costs and indirect (Scope 2) emissions.
In power generation, improved efficiency reduces the fuel required per unit of electricity produced. This lowers emissions intensity and can reduce exposure to carbon-related costs under mechanisms such as the EU Emissions Trading System (ETS).
In a higher-cost and more regulated operating environment, these effects become increasingly important. While ETS directly increases the cost of emissions within the EU, the introduction of the Carbon Border Adjustment Mechanism (CBAM) adds further uncertainty around future carbon-related costs and competitive dynamics as its implementation continues to evolve.
This creates a more challenging environment for industrial companies to plan ahead, increasing the importance of reducing emissions intensity to limit exposure to both current and future cost risks.
Making Better Use of the Energy Already Available
Industrial competitiveness in Europe is increasingly shaped by both energy costs and the cost of emissions.
Improving how energy is used within existing systems offers a practical way to address both. It reduces waste, improves efficiency, and lowers exposure to external cost drivers.
Technologies such as Climeon’s HeatPower systems are designed to convert low-temperature heat into electricity, improving overall system efficiency in industrial and power generation applications.
This is a proven and commercially available approach that can be implemented today. While it will not solve all of the challenges facing European industry, it offers a practical and cost-efficient way to deliver immediate improvements in energy use and emissions performance.
As the energy system evolves, solutions that provide near-term value while remaining compatible with future developments will continue to play an important role.
