Alternative fuels for industrial heat — the honest comparison

Q: Is biomass cheaper than natural gas for industrial heat?

Often per MWh of fuel (wood chips have traded below EU gas for most of 2022–2026), but the full comparison includes boiler conversion capex, storage/handling, availability and the CO2 accounting (biogenic CO2 counts as zero in the ETS if sustainability criteria are met). The table on this page shows the indicative ranges with all caveats labelled.

Q: Is electrification cheaper than gas?

Per kWh, EU industrial electricity costs 2–4× gas — direct resistance heating rarely pays. The economics flip with HEAT PUMPS: at COP 3–4 on low-temperature duties, the effective €/MWh-heat competes with gas while cutting Scope 1 to zero. That's why heat pumps, not resistance, lead industrial electrification below ~150 °C.

Q: What should come before any fuel switch?

Efficiency. Every MWh you stop wasting shrinks the new boiler/heat pump you must buy. Insulation, steam and heat-recovery practices (the rest of this hub) cut the required capacity of ANY future fuel route by 10–20% — the cheapest part of the transition.

Indicative mid-2026 EU ranges per MWh of delivered heat — prices move, so treat columns as relative positions and recheck before deciding. CO2 factors: UK DESNZ 2024; ETS value at the live price shown on this hub.

Route	€/MWh of heat (indicative mid-2026 EU)	CO2	Reality check
Natural gas (reference)	≈€35–55	0.183 kg/kWh → ≈0.22 t/MWh-heat at 82% boiler	the incumbent; plus ≈€17/MWh-heat of ETS cost at full price
Biomass (wood chips)	≈€30–50 + conversion capex	biogenic — counts ~0 in ETS with sustainability criteria	handling/storage space; supply contracts decisive
Heat pump (COP 3–4, <150 °C duties)	≈€30–60 at €0.10–0.18/kWh elec	Scope 1 zero; Scope 2 falls with the grid	the lead electrification route for low-temp heat
Direct electric (resistance)	≈€100–180	Scope 2 only	rarely economic vs gas except niche/peak uses
Green hydrogen	≈€150–250 today	zero at point of use	for duties that can't electrify; costs falling, not yet competitive

Ranges assume EU industrial tariffs mid-2026; your contract prices govern. Boiler/heat-pump efficiencies stated inline. This is a screening table — the savings calculator handles the efficiency tier that should come first.

Sequence matters

Efficiency first, then the fuel switch

Every alternative route prices per MWh — so the cheapest MWh is the one you no longer need. A 10–20% efficiency programme (insulation, steam, heat recovery — the practices) shrinks the capex of whichever route you pick by the same fraction, and pays for itself meanwhile. Decarbonization merit order, fully priced: €/t abated ranking →

Inzonex removable modular insulation on industrial equipment

Cut the tonnes at the source

Hot industrial equipment? Cut the heat loss.

Boilers, kilns, heat exchangers, valves and steam lines lose energy continuously. Inzonex makes patented (UK GB2508992.1) removable modular insulation — snap-fastened covers engineered per temperature tier, not generic off-the-shelf jackets:

Up to 90% less heat loss from insulated surfaces
Surface temperature ≤45 °C — touch-safe for workers (EN ISO 13732-1)
6× faster maintenance access than fixed cut-and-weld lagging — unclips and refits in minutes, no destruction
Inspectable — comes off to check for corrosion under insulation, then refits like-new (generic jackets often don't survive removal)
Typical payback under 2 years (some 9–11 months)

See Inzonex process-equipment insulation →Run the savings study

FAQ

Questions on this topic

Is biomass cheaper than natural gas for industrial heat?

Often per MWh of fuel (wood chips have traded below EU gas for most of 2022–2026), but the full comparison includes boiler conversion capex, storage/handling, availability and the CO2 accounting (biogenic CO2 counts as zero in the ETS if sustainability criteria are met). The table on this page shows the indicative ranges with all caveats labelled.

Is electrification cheaper than gas?

Per kWh, EU industrial electricity costs 2–4× gas — direct resistance heating rarely pays. The economics flip with HEAT PUMPS: at COP 3–4 on low-temperature duties, the effective €/MWh-heat competes with gas while cutting Scope 1 to zero. That's why heat pumps, not resistance, lead industrial electrification below ~150 °C.

What should come before any fuel switch?

Efficiency. Every MWh you stop wasting shrinks the new boiler/heat pump you must buy. Insulation, steam and heat-recovery practices (the rest of this hub) cut the required capacity of ANY future fuel route by 10–20% — the cheapest part of the transition.