Global Exhaust Heat Recovery System Market Size By Technology (Turbocharger, Organic Rankine Cycle, Thermoelectric Generator ), By Vehicle Type, By Component, By Geographic Scope and Forecast

Exhaust Heat Recovery System Market Size and Forecast

Exhaust Heat Recovery System Market size was valued at USD 46.07 Billion in 2024 and is projected to reach USD 102.4 Billion by 2032, growing at a CAGR of 10.50% from 2026 to 2032.

An Exhaust Heat Recovery System (EHRS) is a system that captures and reuses heat that is normally lost through a vehicle's exhaust gasses. Simply said, when an engine operates, it generates a large amount of heat which is released through the exhaust system. Instead of wasting this heat, an EHRS absorbs and repurposes it to increase the engine's overall efficiency.

They capture and utilize heat that would otherwise be wasted in industrial operations and vehicles. Simply said, these systems work by sending hot exhaust gases via a heat exchanger, where the heat is transferred to another medium such as water or air. The recovered heat can then be used to warm fluids, produce steam, or heat other processes.

Exhaust Heat Recovery Systems (EHRS) are predicted to transform energy efficiency in a variety of industries by catching and utilizing waste heat that would otherwise be lost. These systems work by recovering heat from exhaust gases produced by industrial processes or vehicle engines and channeling it to useful tasks like power generation or water heating.

Global Exhaust Heat Recovery System Market Dynamics

The key market dynamics that are shaping the global exhaust heat recovery system market include:

Key Market Drivers:

Rising Energy Costs: One of the primary factors for the adoption of exhaust heat recovery systems is the rising cost of energy. As fuel and electricity prices climb, industrial and commercial buildings are looking for ways to minimize their energy costs. EHRS contributes by catching and recycling waste heat from exhaust gasses, which would otherwise be lost. This method increases total energy efficiency, resulting in decreased operational expenses.

Regulations and Environmental Policies: Stricter environmental regulations and policies aiming at lowering greenhouse gas emissions are another significant driver. Governments throughout the world are putting in place laws that require businesses to reduce their carbon footprints and improve their energy efficiency. EHRS helps to achieve these goals by minimizing energy waste and pollution. Businesses that recover waste heat and convert it into usable energy can comply with environmental requirements, avoid potential penalties, and even benefit from incentives or subsidies for energy-efficient systems.

Technological Advancements: Technological advancements in EHRS are increasing its efficiency and cost-effectiveness. Advances in materials, heat exchanger design, and system integration have improved EHRS performance and dependability. For example, newer heat exchangers transmit heat more effectively and can work at greater temperatures, increasing system efficiency. Furthermore, advances in control systems and automation enable improved management of recovered heat and integration into current energy systems.

Key Challenges:

High Initial Cost: One of the biggest hurdles in adopting an exhaust heat recovery system is the significant initial investment required. These systems use innovative technology and equipment to capture and utilize waste heat from exhaust fumes. The expenditures include the purchase and installation of components such as heat exchangers, pumps, and control systems.

Complex Integration: Integrating an EHRS into current industrial processes or heating systems can be complicated. The system must be carefully developed to fit into the existing configuration without disrupting activities. This entails not only technological changes but also meticulous planning to guarantee that the recovered heat is efficiently employed in the facility's processes.

Limited Heat Recovery Efficiency: The efficiency of heat recovery systems varies based on several parameters, including the temperature and composition of exhaust gases, as well as the system's design. Not all heat can be adequately recovered, particularly if the exhaust gases are at low temperatures or the system is poorly built. In some circumstances, the recovered heat may not be adequate to meet the desired energy requirements, reducing the system's total benefit. Furthermore, fluctuations in operational conditions might have an impact on the consistency of energy savings from heat recovery.

Key Trends:

Growing Emphasis on Energy Efficiency: One key trend in the Exhaust Heat Recovery System (EHRS) industry is a greater emphasis on energy efficiency. EHRS technology recovers and reuses waste heat from exhaust gasses that would otherwise be lost. Businesses and industries that recover from this heat can drastically cut their energy usage and operational costs. This tendency is driven by rising energy prices and the requirement to comply with severe environmental standards.

Technological Advances and Innovations: Advancements in EHRS are transforming the market. EHRS is becoming more efficient and cost-effective thanks to innovations including better heat exchangers, improved thermal storage systems, and integrated control technologies. Modern EHRS designs include materials and technology that improve heat recovery efficiency, reduce system size, and require less maintenance.

Increasing Adoption in Automotive Industry: The automobile industry is seeing an increase in the deployment of EHRS technology. Automobile manufacturers are putting exhaust heat recovery systems into their vehicles to enhance fuel efficiency and minimize pollutants. By trapping waste heat from the engine's exhaust gasses, these systems can warm the engine or cabin improving overall vehicle efficiency and lowering fuel usage.

Global Exhaust Heat Recovery System Market Regional Analysis

Here is a more detailed regional analysis of the global exhaust heat recovery system market:

Asia Pacific:

The Asia Pacific region currently dominates the exhaust heat recovery system (EHRS) market owing to fast industrialization, stringent pollution laws, and increased vehicle manufacturing. Countries such as China, Japan, and South Korea which are significant car manufacturing hubs with stringent environmental rules drive this region's market domination. The expanding automotive industry is a key driver of the Asia Pacific EHRS market. According to the International Organization of Motor Vehicle Manufacturers (OICA), China will build 26.08 million vehicles in 2021, accounting for 32.5% of total global vehicle production. Japan and South Korea followed, with 7.85 million and 3.46 million automobiles, respectively.

The industrial sector in nations such as China and India is expanding rapidly resulting in increased energy consumption and greenhouse gas emissions. According to the International Energy Agency (IEA), industry accounted for 36% of Southeast Asia's final energy consumption in 2020. Implementing EHRS in industrial operations can boost energy efficiency and lower overall energy usage. Furthermore, government measures supporting clean energy and sustainable development are increasing the use of EHR systems.

North America:

The North American market is predicted to be the fastest-growing for exhaust heat recovery systems owing to stricter pollution rules and rising demand for fuel-efficient cars. This rapid expansion is fueled by the region's robust automobile sector, technological advancements, and a growing emphasis on sustainability. The United States Environmental Protection Agency (EPA) has set lofty goals for reducing greenhouse gas emissions from automobiles. By 2026, the EPA hopes to attain an industry-wide objective of 55 mpg for passenger automobiles and light trucks. This law encourages manufacturers to use modern technologies such as exhaust heat recovery systems to increase fuel efficiency and minimize emissions.

According to the United States Department of Energy, the average fuel efficiency of new 2021 model-year automobiles has set a new high of 25.7 miles per gallon. This trend is projected to continue, increasing the use of exhaust heat recovery devices to increase fuel efficiency. While it may appear contradictory, the rise of electric vehicles is pushing innovation in exhaust heat recovery systems for hybrids. According to the US Department of Energy, plug-in hybrid electric car sales climbed by 138% between 2020 and 2021, totaling over 174,000 units.

Global Exhaust Heat Recovery System Market: Segmentation Analysis

The Global Exhaust Heat Recovery System Market is segmented based on Technology, Vehicle Type, Component, and Geography.

Exhaust Heat Recovery System Market, By Technology

• Turbocharger
• Organic Rankine Cycle (ORC)
• Thermoelectric Generator (TEG)

Based on the Technology, the Global Exhaust Heat Recovery System Market is bifurcated into Turbocharger, Organic Rankine Cycle (ORC), and Thermoelectric Generator (TEG). In the global exhaust heat recovery system market, turbocharger technology is currently dominant. This dominance stems from its widespread application in improving engine efficiency and power output. Turbochargers capture and reuse exhaust gases to drive a turbine that boosts engine performance making them a popular choice in both automotive and industrial applications.

Exhaust Heat Recovery System Market, By Vehicle Type

• Passenger Cars
• Commercial Vehicles

Based on the Vehicle Type, the Global Exhaust Heat Recovery System Market is bifurcated into Passenger Cars and Commercial Vehicles. In the global exhaust heat recovery system market, passenger cars are currently the dominant segment. This dominance is driven by the higher volume of passenger car sales compared to commercial vehicles. The growing focus on improving fuel efficiency and reducing emissions in consumer vehicles has accelerated the adoption of exhaust heat recovery systems in this segment. Additionally, stringent environmental regulations and increasing consumer awareness about eco-friendly technologies further boost the demand for such systems in passenger cars.

Exhaust Heat Recovery System Market, By Component

• EGR Valve
• EGR Cooler
• Turbocharger

Based on the Component, the Global Exhaust Heat Recovery System Market is bifurcated into EGR Valve, EGR Cooler, and Turbocharger. In the global exhaust heat recovery system market, the turbocharger is the dominant component. This dominance is attributed to its pivotal role in enhancing engine efficiency by reusing exhaust gases to boost engine power and performance. Turbochargers significantly improve fuel efficiency and reduce emissions aligning with stringent environmental regulations and consumer demand for high-performance vehicles.

Exhaust Heat Recovery System Market, By Geography

• North America
• Europe
• Asia Pacific
• Rest of the World

Based on Geography, the Global Exhaust Heat Recovery System Market is classified into North America, Europe, Asia Pacific, and the Rest of the World. In the global exhaust heat recovery system market, North America currently holds a dominant position. This leadership is driven by the region's robust industrial infrastructure, stringent environmental regulations, and a strong focus on energy efficiency and sustainability. The U.S. and Canada have significant investments in advanced technologies and are early adopters of innovative heat recovery solutions. Additionally, North America's commitment to reducing greenhouse gas emissions and improving energy efficiency aligns with the benefits of exhaust heat recovery systems.

Key Players

The "Global Exhaust Heat Recovery System Market" study report will provide valuable insight with an emphasis on the global market. The major players in the market are Aisin Corporation, BorgWarner, Inc., Calsonic Kansei Corporation, Continental AG, Dana Limited, Denso Corporation, Eberspacher Gruppe GmbH & Co.

Our market analysis also entails a section solely dedicated to such major players wherein our analysts provide an insight into the financial statements of all the major players, along with product benchmarking and SWOT analysis. The competitive landscape section also includes key development strategies, market share, and market ranking analysis of the above-mentioned players globally.

Global Exhaust Heat Recovery System Market Key Developments

• In July 2024, Aisin announced the introduction of a new advanced exhaust heat recovery technology intended to enhance fuel efficiency and minimize emissions in commercial cars. The system uses cutting-edge heat exchange technologies and materials to improve performance and durability.
• In June 2024, BorgWarner released an updated version of its exhaust heat recovery system, which includes improved thermal management capabilities. This innovative technology aims to improve engine performance and minimize fuel consumption, in line with tightening environmental rules and growing demand for energy-efficient solutions.