Europe could significantly improve its energy security, competitiveness and resilience by capturing and reusing waste heat that is currently released into the environment. A report from Danish engineering company Danfoss argues that excess heat represents one of the world’s largest untapped energy resources and could help Europe reduce its dependence on natural gas.
Large amounts of energy are lost as heat during industrial and commercial activities. According to the report, roughly two-thirds of global energy was wasted as heat in 2024. With global energy demand continuing to rise, improving efficiency and recovering energy that has already been generated could become increasingly important.
Waste heat is produced by facilities including factories, supermarkets, wastewater treatment plants and data centres. Refrigeration systems, industrial machinery and computer servers all generate excess heat during normal operations. Instead of allowing this energy to escape into the atmosphere, it can be captured and reused.
Heat pumps are one important technology for achieving this. They can increase the temperature of recovered heat so it can be reused within the same facility or transferred into district heating networks that provide heating and hot water to nearby homes and buildings. This approach can reduce fossil fuel consumption without requiring additional primary energy generation.
The potential benefits are substantial. One aluminium manufacturer in Denmark has reportedly eliminated its on-site gas consumption by recovering heat, with the resulting savings equivalent to the annual gas used for heating and hot water by 132 Danish homes.
Across Europe, the economic potential could be much larger. Danfoss estimates that reusing waste heat could save Europe approximately €140 billion annually. In Germany alone, existing industrial sources could potentially provide more than 30 per cent of the country’s district heating demand. Heat generated by the country’s large data-centre sector could increase this potential further.
Despite these opportunities, significant barriers remain. Industries need to make heat recovery a standard part of facility design and operation, while energy companies need to make it easier for businesses to connect recovered heat to district heating systems. Governments could also address energy-market rules that make electricity used by heat pumps relatively expensive compared with natural gas.
Rather than continuously producing new energy while allowing existing energy to escape, recovering waste heat could improve overall energy efficiency. By turning discarded heat into useful heating and hot water, Europe could lower energy costs, reduce gas consumption and emissions, and strengthen its energy security and industrial competitiveness.