{"id":5281,"date":"2026-10-17T01:05:51","date_gmt":"2026-10-17T01:05:51","guid":{"rendered":"https:\/\/hetapro.com\/?p=5281"},"modified":"2026-10-17T01:18:53","modified_gmt":"2026-10-17T01:18:53","slug":"industrial-heat-pumps-in-southeast-asia-africa-the-2026-policy-map-for-hthp-process-heat-electrification","status":"publish","type":"post","link":"https:\/\/hetapro.com\/pl\/industrial-heat-pumps-in-southeast-asia-africa-the-2026-policy-map-for-hthp-process-heat-electrification\/","title":{"rendered":"Industrial Heat Pumps in Southeast Asia & Africa: The 2026 Policy Map for HTHP & Process Heat Electrification"},"content":{"rendered":"
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Industrial Heat Pump \u00b7 Buyer’s Intelligence<\/span><\/p>\n

By\u00a0OGRZEWANIE<\/strong>\u00a0\u00b7 Published 17 October 2026 \u00b7 11 min read<\/p>\n

Topics: industrial heat pump (IHP) \u00b7 high-temperature heat pump (HTHP) \u00b7 waste heat recovery \u00b7 process heat electrification \u00b7 industrial decarbonization<\/p>\n

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Key takeaways<\/h2>\n
    \n
  • The industrial heat pump (IHP) market is forecast to grow from\u00a0USD 3.86 bn (2025) to USD 9.52 bn (2035)<\/span>, a 9.44% CAGR \u2014 with\u00a0Asia Pacific the fastest-growing region at 11.17%<\/span>.<\/li>\n
  • In emerging markets, IHP payback is set by the\u00a0electricity-to-fuel price ratio divided by COP<\/span>\u00a0\u2014 a policy variable, not a technical one.<\/li>\n
  • September 2026 delivered a dense cluster of policy signals across\u00a0Southeast Asia and Africa<\/span>: carbon pricing, minimum energy performance standards (MEPS), CBAM, Direct PPA and tax incentives.<\/li>\n
  • The EU’s\u00a0EUR 1 bn IF26 Heat Auction<\/span>\u00a0now names heat pumps explicitly and lowered its eligibility threshold to\u00a0above 80 \u00b0C<\/span>\u00a0\u2014 a de facto global benchmark for HTHP project design.<\/li>\n
  • Certification \u2014 not demand \u2014 is now the binding constraint on selling\u00a0high-temperature heat pumps (HTHP)<\/span>\u00a0into Africa.<\/li>\n<\/ul>\n<\/div>\n

    If you build, buy or finance\u00a0industrial heat pumps (IHP)<\/span>\u00a0for emerging markets, the question is no longer whether industrial decarbonization is coming \u2014 it is which market’s policy architecture will let a\u00a0high-temperature heat pump (HTHP)<\/span>\u00a0project clear its hurdle rate first.<\/p>\n

    This article distils a month of regulatory and project intelligence across\u00a0Southeast Asia and Africa<\/span>\u00a0into one practical map for\u00a0process heat electrification<\/span>. It covers what changed in September 2026, why it moves the economics of\u00a0industrial heat pump systems<\/span>, and what buyers, EPCs and equipment suppliers should do about it.<\/p>\n

    Industrial Heat Pumps (IHP) and High-Temperature Heat Pumps (HTHP): A Quick Definition<\/h2>\n

    Before mapping policy, it is worth being precise about terminology \u2014 because procurement documents, standards and subsidies increasingly use these terms as if they were interchangeable, and they are not.<\/p>\n

    What is an industrial heat pump (IHP)?<\/h3>\n

    An\u00a0industrial heat pump (IHP)<\/span>\u00a0is an electrically driven heat recovery device that lifts low-grade\u00a0waste heat<\/span>\u00a0\u2014 from process cooling, flue gas, wastewater or exhaust air \u2014 into usable\u00a0process heat<\/span>. Unlike a boiler, an IHP does not generate heat; it moves and upgrades it. A well-designed\u00a0industrial heat pump<\/span>\u00a0typically delivers two to four units of heat for every unit of electricity consumed, a ratio expressed as the\u00a0coefficient of performance (COP)<\/span>.<\/p>\n

    What counts as a high-temperature heat pump (HTHP)?<\/h3>\n

    A\u00a0high-temperature heat pump (HTHP)<\/span>\u00a0is the subset of industrial heat pumps that reaches a supply temperature above roughly\u00a0100 \u00b0C<\/span>. In practice the market splits into three bands: below 100 \u00b0C (well-proven, widely deployed),\u00a0100\u2013160 \u00b0C<\/span>\u00a0(the commercial frontier, increasingly available), and\u00a0160\u2013200 \u00b0C and beyond<\/span>\u00a0(emerging). The newest\u00a0HTHP<\/span>\u00a0designs reach\u00a0250\u2013550 \u00b0C<\/span>, which puts steel, cement, refining and chemicals \u2014 the classic\u00a0hard-to-abate<\/span>\u00a0sectors \u2014 directly in scope.<\/p>\n

    Rule of thumb:<\/b>\u00a0every HTHP is an industrial heat pump, but not every industrial heat pump is an HTHP. When a subsidy or standard references “heat pumps,” assume it means the whole IHP family unless a temperature threshold is specified \u2014 and read that threshold carefully, because it decides whether your product qualifies.<\/div>\n

    Where IHPs and HTHPs fit in industrial process heat<\/h3>\n

    Heat dominates industrial energy use. In Indonesia, for example,\u00a0heating accounts for about 45% of manufacturing energy consumption<\/span>, and roughly 80% of industrial heat still comes from fossil fuels. Direct heat above 500 \u00b0C is hard to electrify today;\u00a0indirect heating below 200 \u00b0C \u2014 largely coal, gas and oil boilers \u2014 is the core battlefield for industrial heat pumps<\/span>. Alongside compression heat pumps,\u00a0mechanical vapour recompression (MVR)<\/span>\u00a0I\u00a0steam-generating heat pumps<\/span>\u00a0are the two configurations most often specified for steam replacement, and together they represent a substantial share of the installed\u00a0industrial heat pump market<\/span>.<\/p>\n

    Why September 2026 Was a Turning Point for Process Heat Electrification<\/h2>\n

    Three things happened at once in September 2026, and they compound:<\/p>\n

      \n
    1. Carbon moved onto the balance sheet.<\/span>\u00a0Vietnam’s domestic carbon exchange began trading, Indonesia pushed toward compliance-grade carbon pricing, and the EU tightened its border mechanism \u2014 carbon is shifting from an environmental indicator to a line item.<\/li>\n
    2. Access to capital and electricity was re-plumbed.<\/span>\u00a0The UN launched its Global Grids Accelerator for Africa and Southeast Asia, while Vietnam, Thailand and Kenya each opened or narrowed industrial green-power access.<\/li>\n
    3. Certification gates closed in Africa.<\/span>\u00a0South Africa’s revised VC 9008 and Nigeria’s SONMELS programme turned heat pumps from a price-competitive commodity into a compliance-gated product.<\/li>\n<\/ol>\n

      For an\u00a0industrial heat pump manufacturer or EPC<\/span>, the practical implication is that the sales conversation has changed. It is no longer “how efficient is your\u00a0HTHP<\/span>?” but “which subsidies, carbon revenues and tariff structures can we stack on top of it?”<\/p>\n

      Southeast Asia: Five Policy Signals That Change the IHP Business Case<\/h2>\n

      Vietnam \u2014 carbon as a tradable asset, and a green finance taxonomy<\/h3>\n

      Vietnam has moved from building carbon-market rules to operating them. The Hanoi Stock Exchange pilot carbon exchange opened on 29 June 2026, and by mid-September it had logged\u00a0seven trades and 1,310 emission allowances<\/span>, with carbon priced at roughly\u00a0VND 136,000 (about USD 5) per tonne of CO\u2082e<\/span>. Allowances allocated for the 2025\u20132026 period must be\u00a0surrendered in 2027<\/span>. Twenty-three projects have been approved to transition to Article 6.4, carrying a potential\u00a010 million-plus carbon credits<\/span>.<\/p>\n

      Two details matter specifically for\u00a0industrial heat pump<\/span>\u00a0suppliers. First, Prime Ministerial\u00a0Decision 46\/2026\/QD-TTg<\/span>\u00a0created a national green taxonomy under which certified green projects can access a\u00a02% annual interest-rate subsidy<\/span>\u00a0\u2014 and “production of energy-efficient equipment” is on the eligible list. Second, Hanoi’s inter-agency carbon working group has assigned the Department of Industry and Trade to help enterprises build emission baselines in\u00a0energy saving, rooftop solar, clean electricity, waste heat recovery and fuel switching<\/span>. In other words,\u00a0waste heat recovery \u2014 the core application of an industrial heat pump \u2014 has been written into the official carbon-credit project pipeline<\/span>.<\/p>\n

      Indonesia \u2014 the first published numbers for IHP potential in ASEAN’s largest industrial market<\/h3>\n

      Indonesia’s Institute for Essential Services Reform (IESR) published the country’s first study to quantify\u00a0industrial heat pumps within a policy framework<\/span>. The findings are a ready-made business case: heat pumps with a COP of 3\u20134 can\u00a0cut energy use by 30\u201350%<\/span>, abate CO\u2082 at\u00a0USD 49\u2013160 per tonne<\/span>, and theoretically avoid around\u00a0500 million tonnes of CO\u2082<\/span>. The Ministry of Industry has set a\u00a02050 net-zero target for the industrial sector<\/span>, a decade ahead of the national 2060 goal. Local installed capacity, however, is minimal \u2014 a supply vacuum in a market where manufacturing is roughly 19% of GDP.<\/p>\n

      Meanwhile, Indonesia is revising its\u00a0RUPTL 2025\u20132034<\/span>\u00a0power plan to accommodate a\u00a0100 GWp solar programme<\/span>, with PLN proposing more than\u00a050 GWp of solar and 142 GWh of battery storage<\/span>\u00a0and a target of 70% renewables. That reshapes the availability and cost of industrial green power \u2014 the denominator of every IHP business case.<\/p>\n

      Thailand \u2014 Direct PPA, a 150% tax shield and a domestic CBAM<\/h3>\n

      Thailand has shifted from upfront subsidies to\u00a0post-hoc efficiency rewards<\/span>. Royal Decree No. 805 allows a\u00a0150% corporate tax deduction<\/span>\u00a0on spending for DEDE 5-star certified energy-saving equipment \u2014 a certification that directly increases the after-tax payback of a\u00a0high-temperature heat pump<\/span>. The National Energy Policy Council has also approved\u00a0industrial Direct PPA<\/span>, letting factories buy clean power directly from generators and compressing the industrial electricity price. The\u00a0draft PDP2026<\/span>\u00a0targets 65% clean energy and more than 20,000 MW of solar.<\/p>\n

      Thailand is also building a\u00a0domestic cross-border carbon adjustment<\/span>\u00a0within its Climate Change Bill, and officials acknowledge the country still lacks a unified MRV legal framework and enough accredited verifiers \u2014 a gap that turns “can you produce device-level energy data?” into a differentiator for industrial heat pump engineering firms.<\/p>\n

      Malaysia \u2014 climate law, NEEAP 2.0 and thermal energy in scope<\/h3>\n

      Malaysia’s National Climate Change Bill is approaching parliament, alongside a Climate Change Fund. Its\u00a0NEEAP 2.0 (2026\u20132035)<\/span>\u00a0targets an 11.6% reduction in national energy demand and RM 85.24 billion in utility savings \u2014 and, critically,\u00a0extends beyond electricity to include thermal energy<\/span>, with measures aimed at industrial, commercial and residential sectors. This is the first time Malaysian energy-efficiency policy explicitly reaches\u00a0industrial process heat<\/span>, the natural territory of the\u00a0industrial heat pump<\/span>.<\/p>\n

      Singapore \u2014 standards and frameworks that travel<\/h3>\n

      Singapore extended its\u00a0GEEM 2.0<\/span>\u00a0grant (SGD 63 million) for existing-building energy efficiency to March 2027, and its\u00a0SS 697:2026<\/span>\u00a0standard for liquid-cooling waste heat recovery has become a regional reference. Standards like these tend to diffuse across ASEAN ahead of legislation \u2014 worth tracking if you build\u00a0data-centre-adjacent heat recovery<\/span>\u00a0as an extension of your\u00a0IHP<\/span>\u00a0portfolio.<\/p>\n

      Africa: From Donor Pilots to Bankable Industrial Heat Projects<\/h2>\n

      Africa’s story in September 2026 was different from Southeast Asia’s. Funding sources are tightening \u2014 official development assistance fell\u00a023% in 2025<\/span>\u00a0and the GEF-9 initial pledge of USD 3.9 bn came in below the previous round \u2014 while the project pipeline is becoming concrete. The direction of travel is\u00a0from grants toward bankable, blended and carbon-revenue-backed projects<\/span>.<\/p>\n

      Kenya \u2014 the industrial tariff, open access and geothermal steam<\/h3>\n

      Kenya’s draft\u00a0National Industrialization Policy 2026<\/span>\u00a0names the cost of electricity as the main structural constraint on manufacturing and proposes a\u00a0dedicated industrial tariff<\/span>, aiming to close the gap with regional competitors to within 10% by 2032. The\u00a02026 Energy (Electricity Market, Bulk Supply and Open Access) Regulations<\/span>\u00a0already let generators sell directly to large consumers on 1\u201310 year PPAs, ending Kenya Power’s retail monopoly. Industry currently pays around\u00a017 US cents\/kWh<\/span>, against Ethiopian import power at roughly\u00a06.5 cents\/kWh<\/span>\u00a0\u2014 so the direction of the tariff curve is the single most important variable for any\u00a0process heat electrification<\/span>\u00a0project in the country.<\/p>\n

      On the demand side, Sinoma Energy Conservation signed a\u00a0103 MW green energy EPC package<\/span>\u00a0with DEVKI Group covering\u00a0waste heat recovery<\/span>\u00a0and biomass at Kenyan steel and cement plants. Geothermal developer GDC sells\u00a0steam<\/span>\u00a0to industrial users \u2014 the same end market as an industrial heat pump, so the two are more likely to be\u00a0layered and complementary<\/span>\u00a0than directly competitive, with heat pumps concentrating on the 100\u2013200 \u00b0C band and waste heat recovery.<\/p>\n

      Nigeria \u2014 a compulsory energy label that reaches heat pumps<\/h3>\n

      Nigeria’s Standards Organisation launched\u00a0SONMELS<\/span>, a mandatory energy-efficiency labelling scheme. From\u00a0December 2026<\/span>, products without a valid label cannot enter the market, with\u00a0MEPS plus a one-to-five-star label<\/span>, national registration, ISO\/IEC 17025 test reports and five-year record-keeping. Two features make it pivotal: an\u00a0automatic expansion clause<\/span>\u00a0(new categories become regulated without a new regulation), and a registration requirement that\u00a0only a local Nigerian entity can fulfil<\/span>. Air conditioners and split systems \u2014 the closest cousins of heat pumps \u2014 are already in Phase 1, so\u00a0heat pump water heaters and space-heating heat pumps are a realistic next addition<\/span>. The TBT comment window closes\u00a023 October 2026<\/span>.<\/p>\n

      South Africa \u2014 HTHP-relevant MEPS and a steel decarbonization programme<\/h3>\n

      South Africa’s revised mandatory specification\u00a0VC 9008<\/span>\u00a0(Government Gazette No. 55257) sets\u00a0minimum energy performance standards for heat pumps as a distinct product category<\/span>\u00a0\u2014 rare in Africa \u2014 tightening from grade G to F in two stages (August 2027 and August 2028) for equipment up to 16 kW, with compliance under SANS\/ISO 5151 and related standards and refrigerant rules attached. Certification runs through the NRCS and requires a local legal entity as applicant.<\/p>\n

      On the industrial side, ArcelorMittal South Africa partnered with Veolia and Norfund to develop a portfolio of decarbonization projects, starting with\u00a0blast-furnace gas recovery and the optimization and modernization of steam and power generation<\/span>\u00a0\u2014 a textbook\u00a0industrial heat recovery<\/span>\u00a0scope. The “industrial owner + technology partner + investment fund” structure is becoming the standard template for African industrial decarbonization projects.<\/p>\n

      North Africa \u2014 steam recovery in practice<\/h3>\n

      In Tunisia, the African Development Bank signed roughly\u00a0USD 240 million<\/span>\u00a0in financing, including USD 110 million for the Tunisian Chemical Group. At its Gab\u00e8s site,\u00a0recovered steam is expected to deliver 23 MW of self-generation capacity<\/span>\u00a0\u2014 direct evidence that\u00a0steam recovery and process heat optimization<\/span>\u00a0are financeable in North African industry. In parallel, Namibia is structuring an investment plan to access the Climate Investment Funds’ Industrial Decarbonization Programme, targeting up to\u00a0USD 250 million<\/span>\u00a0in concessional finance for green ammonia, direct reduced iron and mineral processing \u2014 all high-temperature heat applications.<\/p>\n

      West Africa \u2014 integrated steam and cooling<\/h3>\n

      In C\u00f4te d’Ivoire, a 2 MW trigeneration plant at a cosmetics manufacturing site in Abidjan will supply plant power,\u00a0recover exhaust heat to produce 11 bar steam<\/span>, and drive an absorption chiller for 5 \u00b0C chilled water. The combination of\u00a0industrial steam and process cooling<\/span>\u00a0is precisely the territory where an\u00a0industrial heat pump<\/span>\u00a0competes on cost \u2014 and it provides a useful comparison benchmark for local HTHP proposals.<\/p>\n

      The Economics of an Industrial Heat Pump: Reading the Policy Signals Correctly<\/h2>\n

      The reason all this regulation matters is captured in one relationship. The internal rate of return of an\u00a0industrial heat pump<\/span>\u00a0project is driven by:<\/p>\n

      The IHP payback equation:<\/b>\u00a0IRR \u2248 f ( (electricity price \u00f7 fuel price) \u00f7 COP ) + capex subsidy + tax shield + carbon revenue \u2212 certification cost<\/div>\n

      Every term on the right is a\u00a0policy variable<\/span>. That is why\u00a0industrial heat pump market<\/span>\u00a0analysts describe the electricity-to-gas ratio as policy-set rather than technical: a COP of four only saves money if electricity costs less than four times gas per unit of energy. Southeast Asia’s carbon markets and Thailand’s Direct PPA attack the numerator; Africa’s tariff reform and Nigeria’s and South Africa’s MEPS attack the denominator and the cost base.<\/p>\n\n\n\n\n\n\n\n\n\n\n\n\n
      Policy lever (Sept 2026)<\/th>\nMarket<\/th>\nEffect on an IHP \/ HTHP project<\/th>\n<\/tr>\n<\/thead>\n
      Carbon price ~USD 5\/t; 2027 surrender<\/td>\nVietnam<\/td>\nAdds recurring revenue \/ avoided cost to waste heat recovery<\/td>\n<\/tr>\n
      2% interest-rate subsidy for green projects<\/td>\nVietnam<\/td>\nLowers cost of capital on certified projects<\/td>\n<\/tr>\n
      150% tax deduction on 5-star equipment<\/td>\nThailand<\/td>\nImproves after-tax payback of certified HTHP<\/td>\n<\/tr>\n
      Industrial Direct PPA<\/td>\nThailand<\/td>\nLowers the electricity price \u2014 the key denominator<\/td>\n<\/tr>\n
      Mandatory MEPS for heat pumps (VC 9008)<\/td>\nSouth Africa<\/td>\nRaises compliance cost; favours compliant, efficient HTHP<\/td>\n<\/tr>\n
      SONMELS mandatory label<\/td>\nNigeria<\/td>\nMarket entry gated by certification and local entity<\/td>\n<\/tr>\n
      Industrial tariff reform + open access<\/td>\nKenya<\/td>\nCould compress payback materially if tariff falls<\/td>\n<\/tr>\n
      EUR 1 bn heat auction, >80 \u00b0C eligible<\/td>\nEU (benchmark)<\/td>\nDefines what a bankable HTHP project looks like<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

      The Real Barriers to HTHP Adoption in Emerging Markets<\/h2>\n

      1. Certification and MEPS<\/h3>\n

      Africa’s market has historically competed on price. That is ending. With\u00a0VC 9008<\/span>\u00a0in South Africa and\u00a0SONMELS<\/span>\u00a0in Nigeria, high-GWP, low-efficiency machines face effective exclusion. The practical lead time is 12 months or more for testing and certification, and the applicant must be a local legal entity \u2014 so\u00a0natural-refrigerant HTHP platforms (ammonia, CO\u2082, propane) and locally registered partners are no longer optional<\/span>. Similar MEPS frameworks are in force or emerging in Ghana, and the EU’s F-Gas tightening continues to cascade through export markets.<\/p>\n

      2. Grid capacity<\/h3>\n

      The UN’s\u00a0Global Grids Accelerator<\/span>, launched on 23 September 2026, exists because more than\u00a02,500 GW of renewable capacity is stalled in grid-connection queues worldwide<\/span>, and in parts of Southeast Asia\u00a050\u201360% of renewable projects<\/span>\u00a0have been cancelled or delayed by inadequate grid capacity. Since an\u00a0industrial heat pump<\/span>\u00a0is only as green as the electricity it runs on, grid access is a precondition for the decarbonization story your customers need for their own export compliance.<\/p>\n

      3. MRV and carbon data<\/h3>\n

      Thailand acknowledges it lacks a unified MRV system; Vietnam is still operationalizing one. The window before enforcement is exactly when\u00a0device-level metering, traceable operating data and defensible baselines<\/span>\u00a0become a competitive advantage. Suppliers who can package “we will measure and verify your process heat emissions” with the equipment will own the customer relationship long before carbon rules bite.<\/p>\n

      What This Means for Buyers, EPCs and Heat Pump Suppliers<\/h2>\n