Clean Industry in China: A Techno-Economic Comparison of Electrified Heat Technologies, Barriers, and Policy Options

Summary

China's manufacturing sector is a major contributor to CO2 emissions, with 61% of the country's total and 73% from industrial heat in 2021. This report evaluates direct electrification via industrial heat pumps and thermal batteries as key decarbonization strategies. Industrial heat pumps offer efficiencies of 300-400% for low-temperature heat (up to 165 °C), with levelized costs of $38/MWhth for 80-100 °C applications and $58/MWhth for 100-165 °C. Thermal batteries, capable of delivering heat up to 1,700 °C with 95% round-trip efficiency, have an estimated levelized cost of $46/MWhth. Incorporating a projected 2030 carbon price of $19.5/tCO2, industrial heat pumps become the lowest-cost option for low-temperature heat, while all electric technologies are projected to reach zero emissions with China's grid decarbonization by 2050.

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