Cut costs and carbon emissions from process heating

Industrial process heating is a major contributor to energy costs and UK carbon emissions.

SMEs can reduce the impact by operating heat systems more efficiently and eventually replacing them with lower carbon options.


  1. Get started
  2. Measure and monitor
  3. Do maintenance checks
  4. Change operations
  5. Retrofit existing equipment
  6. Invest in new equipment
  7. Apply for the Industrial Energy Transformation Fund
  8. Get support and learn more from case studies

Get started

The use of ‘process heat’ includes any heat or steam used directly for production and manufacturing processes.

Usually, process heat considered separately from ‘building heat’ systems that warm the air temperature of your entire premises.

You should start by optimising existing systems, as replacing heating equipment is costly.

This includes:

  1. Measuring the energy used specifically for process heat.
  2. Making sure equipment is well maintained.
  3. Optimising heating operations and control systems.
  4. Recovering waste heat for other uses.

Invest in more efficient, lower carbon options if equipment is out of date and needs replacing or retrofitting.

These include heating systems that:

  • are powered by electricity or recovered waste heat rather than fossil fuels
  • are ‘hydrogen ready’ or use lower carbon fuels
  • generate combined heat and power (CHP)

Measure and monitor

The US Department of Energy estimates that businesses can save 5% to 15% on process heating costs through low cost operational improvements.

Start by measuring the energy use of process heating equipment separately from other building systems.

Appliances that use electricity or fossil fuels can be ‘submetered’ to find out how much energy they use specifically.

This helps with:

  • getting a baseline to measure against in the future
  • working out what share of energy use is for production
  • identifying reductions in system performance

Submeters can be connected to online monitoring systems that provide real time data and visualisations of usage.

More sophisticated thermal sensors can also provide continuous data on heating levels and help find operational improvements.

Use the Green Economy website to find businesses that can install submeters and monitoring systems.

Do maintenance checks

Simple maintenance checks can identify issues that cause heating systems to run less efficiently. Fixing them can lower demand for heat and reduce energy bills.

If you have a heat monitoring system, use it to identify areas that are not performing well.

You can also conduct a basic walkaround to inspect for:

  • damaged insulation
  • clogged or ripped air filters
  • air or steam leaks
  • worn or broken seals

Speak to staff in charge of running and maintaining equipment. Based on your findings and their feedback, start or enhance a planned maintenance programme that’s right for your business.

Change operations

Changing operations can lead to significant savings in your heating plant and machinery.

This can include:

  • changing schedules so equipment runs for less time at higher capacity
  • looking at alternatives to drying such as presses or centrifuges
  • making sure that oven doors stay closed as often as possible
  • reducing excessive preheating periods and recovering waste heat

Check the Carbon Trust guide to manufacturing energy savings for more detailed advice on heating processes.

Retrofit existing equipment

Add on to your existing plant and machinery before buying new systems. Buying new heating equipment is costly.

Simple ideas for new equipment include:

  • fitting air curtains on to continuous ovens to prevent heat leakage
  • installing insulation around hot liquid tanks and pipework
  • fitting tanks with lids to reduce evaporation and reducing warm up time

Waste heat recovery systems can also increase the value of existing equipment and provide ‘free’ heat to other applications.

Potential heat sources include:

  • ventilation system extracts
  • boiler flue gases
  • air compressors
  • high temperature exhaust from furnaces, kilns, ovens and dryers

Check the Carbon Trust guide to manufacturing energy savings for more detailed advice on heat recovery.

Invest in new equipment

You should consider lower carbon options when fossil fuel-powered heating equipment is due to be replaced.

Lower carbon options ensure compliance with future net zero legislation and lower your emissions profile.

You might also be eligible to claim tax relief under the Annual Investment Allowance. The limit of the allowance is £1M up until 31 March 2023.

Energy input costs for lower carbon systems is generally higher. However, lower carbon systems can still payback through efficiency improvements.

Lower carbon options include:

  • switching to alternative fuels such as hydrogen, biomass or electrification
  • using electricity instead
  • systems that run on gas but can be converted to hydrogen later on
  • combined heat and power (CHP) systems, provided they are ‘hydrogen-ready’ to avoid locking in natural gas

Use the government’s Energy Technology List to identify energy efficient plant and machinery.

You can also check MakeUK’s net zero roadmap to get more detailed guidance on the readiness of heat decarbonisation technology.

Apply for the Industrial Energy Transformation Fund (IETF)

Businesses with high energy use from industrial processes can apply for the Industrial Energy Transformation Fund (IETF).

On 30 March 2023, an extension to the fund was announced, increasing total grant funding by £185m.

The IETF is designed to run until 2027 and is available across the UK.

Scotland has a similar scheme to the IETF.

Subject to business case approval, Phase 3 of the IETF will open for new applications in early 2024.

This will support industry to cut their energy bills and carbon emissions by investing in energy efficiency and low carbon technologies.

The IETF provides matching funding for every business for various efficiency measures.

How much funding you might get will depend on the type of funding and size of your business.

Funds are available for:

  • feasibility or engineering studies
  • improving energy efficiency for an industrial process
  • reducing emissions caused by an industrial process

More information will be announced in due course, including about:

  • stakeholder events
  • competition window timelines
  • eligibility criteria
  • application processes
  • previous IETF competition winners

Contact for more information about the fund.

Get support and learn more from case studies

You might find it helpful to hire a consultant to study and propose changes to your industrial processes if your business has financial resources.

Find out more about retrofit funding to check what financing is available from banks, government schemes and local councils.

Check our case studies page for examples of other SMEs that have successfully cut their costs and carbon emissions.