Every industrial process, every server that processes data, and every supermarket freezer generates heat. In most cases, this heat is wasted. A new report by Danfoss, a Danish multinational specializing in energy-efficiency technologies, quantifies the extent of this loss: in 2024, approximately two-thirds of the world’s energy was lost as heat, and the projection for 2030 stands at 55 percent.
According to the analysis, Europe alone fails to recover an amount of energy each year equivalent to Paris’s electricity needs for more than 48 years. Recovering this heat—which is technically already feasible with existing technologies— could generate global savings of up to 140 billion euros per year.
Three Recovery Methods
The report identifies three approaches. The first, described as the simplest and most cost-effective, is direct on-site reuse: an industrial facility recovers heat from a process to heat water or spaces within the same plant. This is the case for an aluminum producer in Denmark that, by connecting its cooling system to its heating system via heat pumps, will eliminate 205,600 cubic meters of greenhouse gases per year, with a payback period of 2.3 years.
The second approach involves microgrids between neighboring businesses, where those that produce excess heat transfer it to nearby businesses that need it. Data centers are identified as the leading candidates: they operate continuously year-round and convert nearly all the electricity they consume into heat. In an industrial park in Tianjin, China, heat recovered from two data centers has reduced local heating costs by about 60% compared to commercial district heating rates in the area.
The third approach is integration into district heating networks, which today remain largely reliant on fossil fuels: the report notes that 90% of the heat distributed in cities is still produced by burning natural gas or other fossil fuels.
The Case of Germany
The most detailed analysis focuses on Germany, which alone accounts for more than 20% of the European Union’s total industrial heat recovery potential. By cross-referencing the national waste heat registry with the map of district heating networks, Danfoss has calculated that the heat available within one kilometer of the country’s 178 largest networks would cover approximately 30.4% of Germany’s district heating demand—a figure that already exceeds the legal target set for 2030 by the Heat Planning Act.
However, the figure excludes cogeneration plants and does not yet account for data centers, of which there are over 3,000 in Germany—the highest number in Europe. According to the report, their future inclusion would significantly increase the percentage—a crucial factor in achieving the more ambitious target set for 2040: 80% of heat from renewable or recovered sources.
Kristian Strand, president of Danfoss Climate Solutions, cites the availability of the technology in the report and calls for regulatory action: We need regulations that simplify connections to energy grids and policies that address the price imbalance between electricity and natural gas, which is currently one of the main barriers to investment in the electrification of heating.
