Exhaust Heat Recovery System Market

Stringent Emission Regulations Propels Market Growth.

Market CAGR for exhaust heat recovery system is being driven by the stringent emission regulations. With the increased focus on the effects of climate change and the UN warning that the world has just a 12-year window to act, various industry verticals, including the automotive industry, are taking steps to decrease their CO2 footprint. According to the World Health Organization, the transportation sector is the fastest-growing contributor to overall greenhouse gas emissions. This is primarily due to land and air transportation, but the vehicle production process is just as harmful as driving itself.

The EU remains committed to reducing greenhouse gas emissions throughout the Kyoto Protocol's second commitment period, which runs from 2013 to 2020. The goal for 2020 was to reduce GHG emissions by 20% compared to 1990.

The EU committed to a GHG reduction target for the years 2021 to 2030 as part of the Paris Agreement (COP21). The commitment for 2030 is to reduce GHG emissions by 40% compared to 1990. As a result, stringent emission laws implemented by governments around the world are likely to boost the worldwide exhaust heat recovery system market during the forecast period.

The amount of CO2 emissions connected with all of a person's or other entity's action (for example, a building, corporation, or country) is referred to as the carbon footprint. It comprises direct emissions from the combustion of fossil fuels in production, heating, and transportation, as well as emissions required to produce the power connected with the goods and services consumed.

Furthermore, the carbon footprint idea frequently includes other greenhouse gas emissions, such as methane, nitrous oxide, or chlorofluorocarbons (CFCs).As climate change and other environmental challenges gain prominence and touch all aspects of society, automobile manufacturers are taking steps to lessen their carbon footprint. Even minor activities can have a significant environmental impact.

The Exhaust Heat Recovery System (EHRS) Market is expanding rapidly due to rising demand for energy-efficient systems. With growing environmental concern and rising fuel costs, there is a growing need for solutions that can assist reduce fuel usage and emissions. EHRS technology is one such solution that is gaining traction among automakers and commercial vehicle manufacturers.

The EHRS technology recovers waste heat from the exhaust fumes of internal combustion engines and turns it into usable energy. This energy can then be used to power other systems within the car, such as the air conditioning, power steering, and electrical systems. The EHRS technology improves the overall energy efficiency of the vehicle by using waste heat that would otherwise be lost. Furthermore, governments throughout the world are enacting legislation to minimize car emissions, which is encouraging the adoption of EHRS technology.

For example, the European Union has mandated that by 2021, all new cars sold in the region must include EHRS technology.

Rapid industrialization across developing nations is a key driver for the Global Exhaust Heat Recovery System Market Industry. As industries expand, the demand for energy-efficient technologies becomes paramount. Countries such as India and Brazil are investing heavily in infrastructure and manufacturing, leading to increased energy consumption. The adoption of exhaust heat recovery systems in these regions can mitigate energy costs and improve operational efficiency. This trend is expected to contribute to the market's growth, with projections indicating a rise to 76.1 USD Billion by 2035, as industries seek to optimize energy use and reduce operational expenses.

The Global Exhaust Heat Recovery System Market Industry is projected to experience substantial growth over the coming years. With a market value of 35.9 USD Billion anticipated in 2024, the industry is expected to expand significantly, reaching 76.1 USD Billion by 2035. This growth trajectory indicates a compound annual growth rate of 7.07% from 2025 to 2035, reflecting the increasing adoption of energy-efficient technologies across various sectors. The market's expansion is driven by factors such as rising energy costs, regulatory pressures, and a growing emphasis on sustainability, positioning exhaust heat recovery systems as a vital component of modern industrial practices.

Innovations in technology are significantly influencing the Global Exhaust Heat Recovery System Market Industry. The development of advanced materials and systems, such as high-efficiency heat exchangers and smart control systems, enhances the performance of exhaust heat recovery systems. These technological advancements allow for better integration with existing industrial processes, thereby maximizing energy recovery. As industries increasingly adopt these cutting-edge solutions, the market is likely to witness a compound annual growth rate of 7.07% from 2025 to 2035. This growth underscores the importance of continuous innovation in driving market expansion.

Economic incentives and subsidies provided by governments are playing a crucial role in promoting the Global Exhaust Heat Recovery System Market Industry. Many countries offer financial support for industries that invest in energy-efficient technologies, including tax credits and grants. These incentives lower the initial investment barrier for companies considering exhaust heat recovery systems, making them more accessible. As industries take advantage of these financial benefits, the market is poised for growth. The combination of economic incentives and the increasing need for energy efficiency suggests a robust future for the industry.

The Global Exhaust Heat Recovery System Market Industry is benefiting from a heightened focus on sustainability among corporations and governments. Organizations are increasingly recognizing the importance of reducing their carbon footprint and achieving sustainability goals. This shift is prompting investments in energy-efficient technologies, including exhaust heat recovery systems, which can significantly lower emissions and energy costs. As more companies commit to sustainability initiatives, the demand for these systems is expected to rise, further propelling market growth. The alignment of corporate strategies with environmental objectives is likely to shape the future landscape of the industry.

The Global Exhaust Heat Recovery System Market Industry is experiencing a surge in demand due to increasingly stringent energy efficiency standards. Governments worldwide are implementing regulations aimed at reducing energy consumption and greenhouse gas emissions. For instance, the European Union's Ecodesign Directive mandates that industrial systems meet specific efficiency criteria. This regulatory environment encourages industries to adopt exhaust heat recovery systems, which can significantly enhance overall energy efficiency. As a result, the market is projected to reach 35.9 USD Billion in 2024, reflecting a growing recognition of the need for sustainable energy solutions.

By region, the study provides the market insights into North America, Europe, Asia-Pacific and Rest of the World. North America has the greatest market for Exhaust Heat Recovery Systems (EHRS), due to the increasing demand for fuel-efficient automobiles and the presence of major automotive manufacturers in the region.

Further, the major countries studied in the market report are The US, Canada, German, France, the UK, Italy, Spain, China, Japan, India, Australia, South Korea, and Brazil.

Figure2: Global Exhaust Heat Recovery System Market Share By Region 2022 (Usd Billion)

Source: Secondary Research, Primary Research, Market Research Future Database and Analyst Review

Europe Exhaust Heat Recovery System Market accounts for the second-largest market share. The region is putting more emphasis on lowering greenhouse gas emissions. Further, the German Exhaust Heat Recovery System Market held the largest market share, and the UK Exhaust Heat Recovery System Market was the fastest growing market in the European region

The Asia-Pacific Exhaust Heat Recovery System Market is expected to grow at the fastest CAGR from 2024 to 2032. This is because of the tremendous growth of the automotive sector in nations such as China, India, and Japan. Moreover, China’s Exhaust Heat Recovery System Market held the largest market share, and the Indian Exhaust Heat Recovery System Market was the fastest growing market in the Asia-Pacific region.

Leading market players are investing heavily in research and development in order to expand their product lines, which will help the Exhaust Heat Recovery System Market, grow even more. Market participants are also undertaking a variety of strategic activities to expand their global footprint, with important market developments including new product launches, contractual agreements, mergers and acquisitions, higher investments, and collaboration with other organizations. To expand and survive in a more competitive and rising market climate, Exhaust Heat Recovery Systemindustry must offer cost-effective items.

Manufacturing locally to minimize operational costs is one of the key business tactics used by manufacturers in the global Exhaust Heat Recovery System industry to benefit clients and increase the market sector. In recent years, the Exhaust Heat Recovery System industry has offered some of the most significant advantages to medicine. Major players in the Exhaust Heat Recovery System Market, including Valeo (France), Dana (US), Calsonic Kansei (Japan), Delphi Technologies (UK), Mitsubishi Electric (Japan), Hitachi Ltd. (Japan), Bosal (Belgium) and others, are attempting to increase market demand by investing in research and development operations.

Faurecia SE is a French global automobile supplier headquartered in Nanterre, a suburb of Paris in the west. It was the world's ninth largest multinational automotive components maker in 2018 and ranked first in vehicle interiors and pollution control technology. Faurecia equips one out of every three autos. It creates seats, exhaust systems, interior systems (dashboards, centre consoles, door panels, acoustic modules), and vehicle aesthetic elements (aluminium, wood).  In 2020, Faurecia announced a collaboration with Dongfeng Motor Corporation in China to develop and manufacture exhaust heat recovery systems for commercial vehicles.

BorgWarner Inc. is a multinational automobile supplier based in Auburn Hills, Michigan. The corporation has around 49,000 people and maintains production facilities and technological systems at 93 sites (as of June 6, 2022) in 22 countries globally. BorgWarner is one of the world's top 25 automobile suppliers. BorgWarner Inc.'s CEO is Frédéric Lissalde. Borg-Warner Corporation was established in 1928. It was created by the merger of many companies, including Borg & Beck, Marvel-Schebler, Warner Gear, and Mechanics Universal Joint. In 1969, Borg-Warner formed Aisin-Warner, a joint company with Aisin Seiki that specialized in automatic gearboxes.

In 2021, BorgWarner has introduced its next-generation exhaust heat recovery system (EHRS), which is intended to increase fuel efficiency and reduce emissions in hybrid and combustion engine vehicles.