Industrial Heat Pumps in Melt Shops: Where They Fit (and Don’t): Actionable Decarbonization in Steel Production

If you operate a melt shop—whether for steel, aluminum, or other metals—decarbonization isn’t just an ideal; it’s a mission-critical business imperative. Steel alone accounts for approximately 8% of global carbon dioxide emissions[^1], and that statistic casts a long shadow on melt shops serving automotive, construction, and infrastructure markets. As regulators escalate emissions standards, customers demand cleaner supply chains, and energy costs show increasing volatility, melt shop operators must embrace cost-effective pathways to shrink their carbon footprint while staying resilient in a fast-changing industry.

Can industrial heat pumps play a pivotal role in this transformation? The answer is complex—but strategic. In this updated analysis, we’ll address where industrial heat pumps mesh with melt shop operations (and where they fall short), providing best-in-class decarbonization tactics. Expect insights grounded in life-cycle assessments (LCAs), risk mitigation, regulatory compliance, and real-world cost/ROI—not just theory.

Why Decarbonization Is a Strategic Priority for Melt Shops

Regulatory and Market Pressures: The “Why Now”

Steel and metal melt shops are among the highest emitters of greenhouse gases (GHGs) due to their dependence on fossil fuel combustion and the intrinsic carbon-intensity of metalmaking processes. Today, the pressure to decarbonize is accelerating due to several interlocking forces:

• Compliance Risk: The regulatory climate is tightening. The European Union’s Carbon Border Adjustment Mechanism (CBAM) aims to levy tariffs on carbon-intensive imports. In the US, the EPA continues to implement stricter air emissions and reporting standards. In Asia, China’s efforts to reduce steel sector emissions are likewise ramping up, with pilot carbon markets already in place.

• Customer Demands: OEMs and major buyers in the automotive, appliance, and consumer goods sectors now routinely require Environmental Product Declarations (EPDs) and verifiable LCA data. Responsible sourcing, supply chain transparency, and carbon product labeling are new standards, not optional extras.

• Financial Incentives: Access to green finance, sustainable supply chain contracts, and ESG investments is rapidly becoming contingent on quantifiable emissions reduction. A McKinsey & Company study found that companies with advanced ESG strategies command up to a 19% higher valuation multiple[^2]. “Dirty” facilities risk higher borrowing costs and more restricted capital.

Case Study Spotlight: Tata Steel Europe

Tata Steel, facing tightening EU policies and changing customer preferences, set a target to reduce CO₂ emissions by 30% by 2030. Early results show that facilities integrating secondary heat recovery and electrification—where feasible—improved not just emissions, but operational resilience and margin, underscoring the C-suite imperative of decarbonization.

Energy and Cost Considerations: The Economic Edge

Energy expenses regularly constitute over 20–40% of a melt shop’s total operational expenditure (OPEX)[^3]. Fossil fuel price swings threaten both cost competitiveness and planning reliability. Decarbonization, therefore, becomes a strategic cost-control lever:

• Volatility Mitigation: Switching from natural gas or oil to electrified solutions, especially when paired with a fixed-cost, long-term renewable power contract, insulates melt shops from global fossil energy shocks.

• Operational Efficiency: Recovering and utilizing waste heat reduces site-wide energy draw, which directly impacts both bottom-line costs and environmental performance metrics.

• Resilience Building: Adopting decarbonization technologies positions melt shops to adapt to potential carbon taxation, emissions trading schemes, and new procurement rules as they arise.

The Decarbonization Toolbox: Where Heat Pumps Fit

Comprehensive decarbonization in melt shops requires a multi-pronged strategy. savvy operators understand that there’s no universal, single-technology silver bullet. Proven solutions include:

• Direct Electrification: Deploying electric arc furnaces (EAFs), induction melting, or plasma torches for core metallurgical operations—cutting fossil dependency.

• Green Hydrogen: Acting either as a reducing agent in direct reduction processes, or as a combustion fuel alternative in furnaces—already a focus in the H2Steel and HYBRIT projects spearheaded in Europe.

• Renewable Energy Procurement: Sourcing certified green electricity, or building on-site solar, wind, or battery storage to power operations.

• Carbon Capture, Storage, and Utilization (CCSU): Emerging for large-emitter facilities, typically in partnership with downstream carbon reuse programs.

• Process Optimization and Digitalization: Implementing smart controls, sensors, and AI-driven analytics to optimize energy and raw material use.

• Industrial Heat Pumps: Harnessing waste heat for process or facility heating, aiming to close the loop and maximize exergy.

But: Are heat pumps always a good fit for the unique demands of heavy metal melt shops? The answer lies in the intersection of process temperature, energy integration, ROI, and compliance considerations.

Industrial Heat Pumps 101: How They Work in Heavy Industry

A heat pump moves thermal energy from a low temperature source to a higher temperature output, typically using electricity—preferably from renewable sources. Unlike conventional boilers or heaters, which burn fuel to create heat, heat pumps leverage existing waste heat, “upgrading” it to a usable temperature. This process dramatically amplifies energy efficiency while minimizing direct emissions.

Efficiency Edge:

• Real-world install data indicates an industrial heat pump can reach a Coefficient of Performance (COP) between 2 and 6[^4]. If a system has a COP of 4, it provides 4 units of heat for every 1 unit of electricity consumed. When used in facilities sourcing wind or solar power, the resultant emissions savings can be substantial.

Technical Example:

At Norilsk Nickel’s copper smelter, a pilot heat pump delivered a 35% reduction in fossil fuel use for secondary heating loads, with a two-year payback period—made possible by abundant waste heat and existing electrical infrastructure.

Temperature Range: The Critical Limitation

The most important constraint:
Industrial heat pumps excel at low to medium temperature lift—practically defined as up to 150–200°C (302–392°F). However, most primary melt shop operations—such as steelmaking, forging, and refinement—demand extreme temperatures, often exceeding 1200°C. This is the crux of whether a heat pump can serve core vs. supporting roles in a melt shop.

Where Heat Pumps Fit in Melt Shop Operations

While heat pumps cannot replace arc furnaces or primary reheating processes, targeted deployment can deliver significant value in secondary and auxiliary roles. Let’s break down where the business case is strongest.

1. Waste Heat Recovery for Process Heating or Preheating

Opportunity:
Melt shops are notoriously rich in waste heat streams—generated from cooling water circuits, off-gas ducts, ambient process heat, and auxiliary systems. A well-designed industrial heat pump can:

• Preheat combustion air or scrap charge: By upgrading low-grade heat, the total energy input to the furnace drops, which can yield a 5–10% efficiency gain and CO₂ reduction in certain applications[^5].

• Support auxiliary process heating: Such as for hot water use (baths, degreasing tanks, or deionized water systems), building heat, or even environmental compliance filtration units.

• Building and infrastructure HVAC: Harnessing plant waste heat for office, locker room, or control room heating, or even cooling through reverse cycle operation.

LCA and Cost, via Real Example:

According to a 2022 study by the German Federal Environment Agency, steel plants integrating closed-loop heat pumps for process preheating saw primary energy reductions of 9–14% and carbon savings of 8–12%, with typical investment paybacks between 2–5 years—assuming consistent heat demand and a stable, moderately-priced electricity supply.

2. Integration with Renewable Energy

Best Practice: Companies that secure power purchase agreements (PPAs) for renewable energy enable double decarbonization: electrified heat pumps cut Scope 1 emissions (direct fossil use) while renewable power eliminates Scope 2 (electricity-related) footprint. This approach strengthens LCA disclosures and supports greener product claims.

Example:

ArcelorMittal Poland piloted a heat pump integration with a wind-powered grid section, evidencing a 22% drop in associated GHG emissions in peripheral facility operations.

3. Compliance and ESG Reporting

Heat pumps (when supplied with low-carbon electricity) provide direct improvements in EPDs, LCAs, and voluntary carbon disclosure frameworks (such as CDP or the Science Based Targets initiative). Metal producers seeking access to green contracts or premium clients (think automotive OEMs) are now regularly scored based on year-on-year reduction metrics, not static system design.

Where Heat Pumps Don’t Fit: Key Limitations in Melt Shops

1. Core Metallurgical Processes

Heat pumps cannot replace high-intensity heating in arc, ladle, or induction furnaces, which demand process temperatures between 1200°C and 1700°C. For these applications:

• Direct electrification or green hydrogen remain the only viable decarbonization paths—each with its own complexity and cost structure.

• High-temperature heat needed for chemical reduction and alloying simply exceeds the current technological ceiling of even the best industrial heat pumps.

2. High-Peak, Rapid-Cycling Loads

Melt shops often operate on fast cycle times, with rapid, spiking heat loads—especially in metal charging, tapping, and refining. Heat pumps thrive best under steady, predictable, and continuous load conditions, such as those found in long-running secondary systems or HVAC.

3. Space and Retrofit Constraints

Deploying large-capacity, industrial-grade heat pumps is not a “plug and play” proposition:

• Legacy sites often lack the necessary space for additional heat exchangers, reservoirs, or piping networks.

• Retrofitting frequently requires process downtime, careful thermal integration, and, in some cases, structural modifications—with CAPEX and schedule implications.

4. Economic Realism

• Electricity prices: In many global geographies, the cost of electricity (even from renewable sources) currently runs higher than natural gas, impacting payback and ROI projections.

• Investment risk: Installing an industrial heat pump system can range from $0.5 million to $3 million or more. Positive business cases depend on subsidies, energy tariffs, predictable loads, and (increasingly) the shadow price of carbon.

Section 2. From Strategy To Execution: A Practical Heat Pump Roadmap For Melt Shops

Actionable Decarbonization Tactics For Melt Shops

If you run a melt shop, you do not have time for abstract theory. You need a clear sequence. What do you do in the next 12 to 24 months, and what do you line up for the next decade. This section lays out a practical roadmap that you can adapt to your site.

Immediate Action Plan: The Next 12 To 24 Months

Build a quantified heat and emissions baseline

Most melt shop decarbonization plans fail because the thermal baseline is vague. You cannot justify a heat pump project if you do not know where your heat comes from, where it goes, and how stable the loads are.

In practical terms, you should:

• Collect fuel and power data by meter
  You need at least 12 months of hourly or 15-minute data if possible. Pull natural gas, fuel oil, LPG, electricity, oxygen and compressed air consumption per line, per furnace, and per major auxiliary system.

• Map your process heat by temperature band
  Classify loads into bands such as below 80 °C, 80 to 120 °C, 120 to 200 °C, and above 200 °C. Industrial research suggests that roughly 35 to 40 percent of industrial process heat demand falls below about 200 °C. This band is where most industrial heat pumps can work effectively. European Heat Pump Association+1

• Identify waste heat sources
  List all available waste heat streams: off-gas from EAF or ladle furnaces after gas cleaning, secondary cooling water, furnace cooling stacks, compressor cooling, and any existing heat recovery loops. For each, estimate temperature, flow, and hours per year.

• Tag each stream as batch or continuous
  Heat pumps prefer steady loads. A cooling circuit that runs 6 000 hours per year is a better candidate than an off-gas stream that spikes during tapping only. You can still serve cyclical loads, but you may need buffer tanks and more control logic.

• Tie the baseline to your emissions inventory
  Allocate Scope 1 emissions from combustion and Scope 2 emissions from electricity to processes and areas. This link is vital. When you later model a heat pump replacing a gas boiler or a fuel heater, you can immediately see the change in tonnes of CO₂ per year and in kilograms of CO₂ per tonne of product.

If you follow these steps, you move from “we think we have a lot of waste heat” to a quantified map with clear candidates for intervention.

Shortlist heat pump use cases that actually work in melt shops

With the baseline in hand, the next move is to pick the first two or three use cases that are both technically sound and financially credible. In typical steel and non-ferrous melt shops, the best early candidates tend to be:

• Scrap or charge preheating
  If you already preheat scrap with off-gas, adding a heat pump is rarely the first move. However, if you still charge cold scrap and have substantial low temperature waste heat in cooling circuits, you can use a heat pump to raise water or air temperature to support preheating stations or to preheat incoming combustion air for burners. Even a 50 to 100 °C lift can cut fuel use in later steps.

• Ladle drying and preheating auxiliaries
  Ladle preheaters and related equipment often use direct gas combustion. In some layouts you can shift part of the load to a heat pump fed by waste heat, especially for lower temperature steps such as refractory drying stages below 200 °C.

• Process water heating and wash systems
  Pickling lines, degreasing baths, and wash systems for castings or slabs frequently run in the 40 to 90 °C range. These are almost always good candidates if you have steady waste heat. Industrial case studies show that replacing conventional electric or gas water heating with heat pumps can cut energy use for these services by 40 to 60 percent, with payback times in the 3 to 6 year range depending on tariffs and support schemes. OECD+1

• HVAC and building heat using plant waste heat
  Even if you treat HVAC as minor, in colder climates the load is not trivial. Sweden is an example. Large industrial heat pumps have supplied district heating loads at scale since the 1980s, with national installed capacity above 1 500 MW in some periods. IRENA+1 Many steel plants in Northern Europe already export waste heat to district heating networks. If you do not have such a network, you can still redirect that heat internally for offices, control rooms, and maintenance shops.

• Low temperature district heat exports
  If your plant is near a town or industrial area, selling low temperature waste heat to a district heating operator through a heat pump can create a new revenue stream and improve your Scope 3 profile. Ovako’s plant in Hofors, Sweden, is one example where industrial residual heat contributes a significant share of local district heating supply. Adven+1

Your shortlist should favor loops that have:

• Stable loads

• Clear temperature compatibility with available heat pump technology

• Good physical access for piping and equipment

• Visible impact on energy costs or emissions per tonne of product

Build a simple economic and risk screen

At this stage, you do not need a full engineering study. A disciplined spreadsheet with sound assumptions will quickly show which use cases deserve a detailed design.

For each candidate loop, estimate:

• Annual useful heat demand in megawatt-hours
  Use your baseline data to compute MWh of heat required in the target temperature band.

• Expected coefficient of performance
  Conservative COP values for industrial heat pumps serving up to 120 to 150 °C are often in the 2.5 to 4.5 range, depending on temperature lift and refrigerant. OECD+1

• Electricity consumption
  Divide annual useful heat demand by COP to estimate annual electricity use.

• Fuel avoided
  If you currently use natural gas, divide heat demand by your boiler or burner efficiency, often around 0.85 to 0.9, to estimate annual fuel energy avoided.

• Energy cost impact
  Multiply electricity use by your plant electricity tariff and fuel energy avoided by your gas or oil tariff. This gives annual net energy cost savings or extra cost.

• CO₂ savings
  Apply your fuel emission factor. Natural gas often sits around 0.18 to 0.2 tonnes of CO₂ per MWh of thermal energy. Multiply by fuel energy avoided per year. Then adjust for your grid emissions factor if you do not yet use fully renewable electricity.

• Support schemes and carbon price
  In many jurisdictions, industrial heat pump projects qualify for grants or tax credits. Add the impact of any grant on capex and include a realistic carbon price or shadow price. In Europe, for example, the carbon price on the EU Emissions Trading System has recently fluctuated in the range of 60 to 100 euros per tonne of CO₂.

A simple scenario can help illustrate the potential. Assume:

• A 5 MW thermal heat pump

• 6 000 operating hours per year

• COP of 4

• Replaces a gas boiler with 90 percent efficiency

• Gas at 30 euros per MWh

• Electricity at 60 euros per MWh

• Carbon price at 80 euros per tonne

Heat delivered per year: 5 MW x 6 000 hours = 30 000 MWh.
Electricity use: 30 000 ÷ 4 = 7 500 MWh.
Gas energy avoided: 30 000 ÷ 0.9 ≈ 33 300 MWh.

Energy cost impact:
Gas cost avoided: 33 300 x 30 ≈ 999 000 euros.
Electricity cost: 7 500 x 60 = 450 000 euros.
Net energy saving: roughly 550 000 euros per year.

CO₂ savings:
Assume 0.2 tonnes of CO₂ per MWh of gas.
33 300 MWh x 0.2 ≈ 6 660 tonnes of CO₂ avoided per year.
At 80 euros per tonne, that equals roughly 533 000 euros per year in avoided carbon cost or value in your internal carbon model.

Combined, the project delivers over 1 million euros per year in economic value. If the installed capex is, for example, 4 to 5 million euros, simple payback sits in the 4 to 5 year range before grants. With grants or low-interest green finance, payback can shorten further.

You can run several such scenarios and quickly see which candidates belong on your near term project list.

Design and execute a focused pilot

Once you have picked a priority loop, your first implementation should be a focused pilot rather than a plant-wide program. The goal is to prove technical integration, validate actual COP and operating hours, and build internal confidence.

Key design points:

• Clear source and sink pairing
  Do not mix too many sources and sinks in your first project. Pair one dominant waste heat stream with one dominant load at a compatible temperature.

• Instrumentation and data logging
  Specify metering for temperatures, flows, pressures, and power use. You want to track delivered heat per hour, actual COP, and availability, not just nameplate capacity. This data will underpin your later LCAs and finance cases.

• Hydraulic and control integration
  Make sure your process control team is involved early. A heat pump loop needs correct sequencing with existing boilers, furnaces, and emergency systems. Include safe bypass logic so you can run without the heat pump during maintenance.

• Maintenance and refrigerant management
  Industrial heat pumps often use refrigerants such as ammonia or CO₂. These bring safety and regulatory requirements that your HSE team must own from day one. Ensure that local service expertise is available.

• Operator training
  The pilot is a chance to build internal skill. If your operators understand what drives COP and reliability, they will run the system with care and catch issues early.

If the pilot meets or beats expectations over at least one heating season, you will have hard data to present to executives, lenders, and customers.

Standardize and scale across sites

If you operate multiple melt shops or cast houses, the next stage is replication. The most successful industrial decarbonization programs treat heat pump projects as repeatable product lines, not one-off experiments.

You can:

• Create standard design templates for typical loop types
  For example, “ladle preheat support loop,” “wash bath heating loop,” or “HVAC and office heat from cooling water.” Each template can include standard capacity ranges, typical COP targets, and standard instrumentation.

• Standardize on a small set of OEMs and integrators
  A tighter supplier base reduces engineering friction, improves spare parts logistics, and increases your negotiating leverage on service levels.

• Embed heat pumps into your internal capital planning process
  Make sure that any major refurbishment, greenfield furnace project, or building expansion includes a check for waste heat reuse with pumps. It is cheaper to design integration at the outset than to retrofit later.

• Link project approval to clear energy and LCA KPIs
  For each new heat pump project, define expected kWh of fuel avoided per year, tonnes of CO₂ avoided per year, and impact in kilograms of CO₂ per tonne of product for key product families.

This type of standardization is what turns a single project into a company-wide decarbonization engine.

Linking Heat Pump Projects To LCA, CBAM, And Customer Value

Industrial buyers now ask for more than anecdotal stories about clean energy. They want quantifiable LCAs, EPDs, and proof that your products meet their own Scope 3 targets.

Here is how heat pump projects tie into that picture.

Product-level LCA refinement

By reducing fossil fuel combustion for low and medium temperature heat, you reduce cradle-to-gate emissions per tonne of steel or aluminum. Even seemingly small reductions matter.

For example, suppose your plant:

• Produces 500 000 tonnes per year of finished product

• Implements a heat pump program that saves 7 000 tonnes of CO₂ per year

This translates to 14 kilograms of CO₂ per tonne. If your current cradle-to-gate footprint is 1.8 tonnes of CO₂ per tonne of product, you now sit at about 1.786. On paper, that may look small. In procurement negotiations where several mills sit in a narrow band, that difference can decide who wins a contract, especially with automotive and appliance OEMs that run strict scorecards.

Heat pumps also improve the share of low carbon energy in your mix. That gives you a cleaner story in EPDs, corporate sustainability reports, and Science Based Targets initiative disclosures.

CBAM and similar border measures

For exporters into the European Union, CBAM will gradually embed a carbon price into imports of iron and steel, aluminum, and related products. Lower embedded emissions per tonne directly reduce your CBAM exposure. Each incremental project that reduces Scope 1 emissions from fuel use improves your position.

In a scenario where CBAM carbon costs add, for example, 50 to 80 euros per tonne of CO₂ to imported products, saving a few kilograms of CO₂ per tonne can equal a margin shift of 1 to 3 percent on some products. That can be the difference between a viable export book and one that is priced out.

Green finance and offtake agreements

Banks, export credit agencies, and major buyers increasingly tie financing terms to emissions performance. A portfolio of heat pump projects, documented with metered data, positions you to:

• Negotiate lower interest rates on sustainability-linked loans

• Access green bonds or transition finance

• Enter long term offtake agreements with customers that pay a premium for verified low carbon material

Without metered, verifiable projects, your decarbonization narrative will look weak. With them, you have a credible pathway that investors and customers can assess.

Future Outlook: How Heat Pumps In Melt Shops Will Evolve

Heat pump technology and industrial policy are both moving quickly. If you plan investments out to 2030 and beyond, you should track several trends.

Higher temperature heat pumps

Most commercial industrial heat pumps today serve up to about 140 to 160 °C, with some high temperature units reaching 200 °C. Recent research in Sweden and elsewhere is exploring high temperature heat pumps for iron and steel that can reach higher levels, using advanced refrigerants and multi-stage compression. Diva Portal

For melt shops, this means that more process steps may become eligible over time. In the near term, you still focus on low to medium temperature loops. Over a 10 to 15 year horizon, options may expand to include higher temperature preheating and some reheating steps previously off-limits.

Integration with hydrogen and electrified furnaces

Projects such as Ovako’s hydrogen heating plant in Hofors show that mills can electrify even high temperature furnace heating using hydrogen produced from renewable power. The plant uses a 20 MW electrolyzer and can cut local CO₂ emissions by tens of thousands of tonnes per year while also supplying hydrogen for vehicles and feeding waste heat into district heating. ovako.com+2Steel Times International+2

As hydrogen and electric arc furnaces spread, the share of emissions from fuel combustion in your process may fall. However, ancillary heat loads will remain. Heat pumps will continue to serve as a companion technology that helps you make full use of waste heat from hydrogen plants, off-gas cooling, and auxiliary electrified equipment.

Policy support and market cycles

Global analysis from agencies such as the IEA shows that getting on track for net zero implies rapid growth in heat pump deployment, with global installed capacity across buildings and industry needing to roughly triple by 2030 and cover a growing share of heating demand. IEA+2IEA+2

At the same time, short term market cycles can be volatile. In Europe, for example, heat pump sales fell by around 23 percent in 2024 compared with the prior year, returning to pre-crisis levels, as policy support became uncertain in several key countries. The Guardian For a melt shop operator, this means you should:

• Use current support schemes while they last.

• Avoid building a plan that only works if subsidies stay at peak levels.

• Negotiate long term supply and service terms to protect yourself from supplier cycles.

Industrial heat pump capacity build-out

Industry analyses indicate that if all industrial low temperature process heat below about 200 °C were to shift to heat pumps, global industrial heat pump capacity would need to rise by tens of gigawatts. That implies adding hundreds of megawatts of capacity every month across all sectors up to mid-century. European Heat Pump Association+1

This level of build-out is ambitious, but it signals a clear direction. Melt shops that build internal capability early will find it easier to secure equipment, talent, and finance as demand grows.

Common Pitfalls In Melt Shop Heat Pump Projects

Many industrial heat pump projects fail or underperform for predictable reasons. You can avoid most of them with careful early work.

Typical pitfalls include:

• Underestimating or overestimating load
  If you oversize the system based on peak rather than realistic average loads, COP will suffer and payback will stretch. If you undersize it, you miss value and risk overloading equipment.

• Poor temperature matching
  Heat pumps work best with modest temperature lifts. If you try to lift from 25 °C to 180 °C in one step, performance will drop sharply. You may need cascaded systems or a different application.

• Ignoring fouling and water quality
  Scaling, fouling, and corrosion in heat exchangers are common pain points in steel plants. If you do not address water treatment, cleaning, and materials selection, your system will degrade quickly.

• Neglecting operations and maintenance input
  Projects that are designed purely from head office often forget realities like access for maintenance, noise, and local safety practices. Bring your local maintenance and operations teams into the design process early.

• Assuming perfect electricity and grid conditions
  A heat pump program can fail if the site grid cannot handle the extra electric load or if tariffs penalize peak consumption. You need a grid study, tariff analysis, and possibly on-site storage or demand response measures.

• Treating the project as “install and forget”
  Heat pumps are reliable, but they are not invisible. You need routine monitoring of COP, running hours, alarms, and refrigerant status. That can be integrated into your existing control and energy management systems.

A Practical Checklist For Melt Shop Leaders

If you are in a leadership role and want a concise view of what to do next, use this simple checklist.

First, confirm that you have:

• A 12 month energy and heat baseline with clear temperature bands

• A ranked list of waste heat sources by temperature, flow, and stability

• A shortlist of at least three candidate heat pump loops with first-pass COP and financial estimates

Next, ensure that you have:

• Assigned a cross-functional team with representatives from operations, maintenance, finance, HSE, and sustainability

• Identified applicable grants, tax incentives, and green finance options in your jurisdiction

• Completed a grid and tariff assessment for the extra electrical load

Finally, move one project into execution with:

• A clear design scope, source and sink pairing, and performance targets

• Instrumentation and monitoring requirements defined from the start

• A realistic commissioning, training, and ramp-up plan

If you cannot tick these items, your plan is not yet ready for investment approval. If you can, you have a credible, defensible case.

Final Perspective: Where Heat Pumps Really Fit In Melt Shop Decarbonization

Heat pumps will not melt steel. They will not replace the need for electric arc furnaces, hydrogen projects, or process changes that cut carbon at the core of metallurgical operations. They are not a cure-all.

However, for low and medium temperature heat needs in and around melt shops, they are one of the most mature, proven tools you can deploy today.

They help you:

• Turn waste heat into usable energy

• Shrink fuel use and exposure to volatile gas prices

• Deliver measurable, metered CO₂ reductions that show up in LCAs, EPDs, and CBAM calculations

• Build internal capability in electrified thermal systems, which you will need more of as hydrogen and direct electrification expand

The highest performing melt shops will treat heat pumps as part of a broader, staged decarbonization program. First, secure quick, credible savings in auxiliary systems. Then, use the experience, data, and confidence gained to tackle larger steps such as furnace electrification, hydrogen integration, and carbon capture where appropriate.

If you do that, heat pumps become more than a side project. They become one of the practical tools that keeps your melt shop competitive, compliant, and profitable in a world where carbon and energy constraints are only getting tighter.

References:
[^1]: International Energy Agency, “Iron and Steel Sector Emissions.”
[^2]: McKinsey & Co, “ESG and Valuation Insights in Heavy Industry,” 2023.
[^3]: World Steel Association, “Steel’s Energy Profile.”
[^4]: European Heat Pump Association, “Case Studies in Industrial Heat Pump Application.”
[^5]: German Federal Environment Agency, “Energy Efficiency in Metal Industry,” 2022.