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Report Overview

The global district heating market reached about USD 208.59 Billion in 2025. The industry is further expected to grow at a CAGR of about 3.90% in the forecast period of 2026-2035. It will reach an approximate value of USD 305.81 Billion by the end of 2035. The key drivers include the rising government initiatives and investments to improve district heating.

2025

Base Year

2019-2025

Historical Period

2026-2035

Forecast Period

Compound Annual Growth Rate

3.9%

Value in USD Billion

2026-2035


*this image is indicative*

Global District Heating Market Report Summary Description Value
Base Year USD Billion 2025
Historical Period USD Billion 2019-2025
Forecast Period USD Billion 2026-2035
Market Size 2025 USD Billion 208.59
Market Size 2035 USD Billion 305.81
CAGR 2019-2025 Percentage XX%
CAGR 2026-2035 Percentage 3.90%
CAGR 2026-2035 - Market by Region Asia Pacific 4.5%
CAGR 2026-2035 - Market by Country India 5.2%
CAGR 2026-2035 - Market by Country China 4.3%
CAGR 2026-2035 - Market by Heat Source Natural Gas 4.6%
CAGR 2026-2035 - Market by Application Residential 4.2%
Market Share by Country 2025 India 3.5%

Asia Pacific is Leading the District Heating Market

Asia Pacific is the major market region for district heating due to expanding urbanisation, population growth, the disposable income that is increasing simultaneously, the rising need for energy-efficient and cost-effective heating systems, and the initiatives taken by the governments. The region's heating needs are satisfied by heat produced by the huge factories and plants, which would otherwise go to waste, the heat produced by the industrial plants is utilised to meet the rising demand for district heating in the region. Various policies to control the carbon emissions are being placed, which will encourage people to connect to the district heating service network instead of using personal/local equipment. With nations such as China increasing their investments in the market and deploying plants in their northern area, which experiences low temperatures, it is predicted to further propel the district heating market in this region.

district heating market by segments

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Market Segmentations: District Heating

District heating is a system network consisting of insulated pipes between the production facilities and cities. The heat generated in the plant is then used for space cooling and heating, domestic water heating, and industrial process heat.

The global market, by heat source, can be broadly divided into:

  • Coal
  • Natural Gas
  • Renewable Resources
  • Oil and Petroleum
  • Others

The plant types in the global district heating market are:

  • Boiler
  • CHP
  • Others

On the basis of applications, the global district heating market includes:

  • Residential
  • Commercial
  • Industrial

The regional markets for district heating can be divided into:

  • North America
  • Europe
  • Asia Pacific
  • Latin America
  • Middle East and Africa
CAGR 2026-2035 - Market by Country
India 5.2%
China 4.3%
Canada 3.8%
UK 3.6%
Australia 3.1%
USA XX%
Germany XX%
France XX%
Italy 2.7%
Japan XX%
Saudi Arabia XX%
Brazil XX%
Mexico XX%

The regional markets for district heating can be divided into North America, Europe, Asia Pacific, Latin America, the Middle East, and Africa.

The Rising Energy Demands and Government Initiatives for Sustainable Solution Aiding the Market Growth

Many countries are in the phase of industrialisation, and to get a better living standard, people have started to move from rural areas to urban areas, which in turn has increased the demand for energy across all sectors. The energy need is dramatically increasing with the growing population, and to fulfil the demand, governments are looking for sustainable options. Their aim is to reduce the increasing pollution and control the carbon emissions produced from local heating systems. This is where the district heating market comes as a lucrative option as it will help in reducing emissions by supplying heating facilities to all the connected houses and areas, meeting the needs, all while lowering the usage of local heating systems by a lot.

The rising support from government initiatives can also provide significant support to the growth of the market. The northern parts of many countries, such as the United States, China, and Japan, are being facilitated with these services. Renewable-based district heating services can be a big boon for the environment. It eliminates the need to burn other fuels, such as coal, which creates a lot of air pollution. Thus, further investment in renewable sources can bolster the market growth even more.

Key Players in the Global Market for District Heating

The report gives a detailed analysis of the following key players in the global district heating market, covering their competitive landscape, capacity, and latest developments like mergers, acquisitions, and investments, expansions of capacity, and plant turnarounds:

  • Fortum Oyj
  • Vattenfall AB
  • Engie Group
  • Danfoss A/S
  • NRG Energy, Inc.
  • Statkraft AS
  • Others

The comprehensive EMR report provides an in-depth assessment of the market based on the Porter's five forces model along with giving a SWOT analysis.

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District Heating Market Report Snapshots

District Heating Companies

*While we strive to always give you current and accurate information, the numbers depicted on the website are indicative and may differ from the actual numbers in the main report. At Expert Market Research, we aim to bring you the latest insights and trends in the market. Using our analyses and forecasts, stakeholders can understand the market dynamics, navigate challenges, and capitalize on opportunities to make data-driven strategic decisions.*

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Key Questions Answered in the Report

In 2025, the global market attained a value of nearly USD 208.59 Billion.

The market is projected to grow at a CAGR of 3.90% between 2026 and 2035.

The market is estimated to witness healthy growth in the forecast period of 2026-2035 to reach USD 305.81 Billion by 2035.

The major industry drivers are reducing carbon emissions and rising energy demands.

The key industry trend is to shift towards a renewable-based heating system for reduced emissions.

The major regions in the industry are North America, Latin America, the Middle East and Africa, Europe, and the Asia Pacific, with the Asia Pacific being the biggest market region.

The heat sources include coal, natural gas, renewable resources, oil and petroleum, among others, where coal and natural gas are the most used heat sources.

The plant types in the market include boiler and CHP, among others.

District heating finds wide applications in residential, commercial, and industrial sectors.

The major players in the industry are Fortum Oyj, Vattenfall AB, Engie Group, Danfoss A/S, NRG Energy, Inc., and Statkraft AS, among others.

Report Summary

Explore our key highlights of the report and gain a concise overview of key findings, trends, and actionable insights that will empower your strategic decisions.

Key Highlights of the Report

Please note that the figures mentioned in the description serve as estimates and may vary from the actual figures presented in the final report.

REPORT FEATURES DETAILS
Base Year 2025
Historical Period 2019-2025
Forecast Period 2026-2035
Scope of the Report

Historical and Forecast Trends, Industry Drivers and Constraints, Historical and Forecast Market Analysis by Segment:

  • Heat Source
  • Plant Type
  • Application
  • Region
Breakup by Heat Source
  • Coal
  • Natural Gas
  • Renewable Resources
  • Oil and Petroleum
  • Others
Breakup by Plant Type
  • Boiler
  • CHP
  • Others
Breakup by Application
  • Residential
  • Commercial
  • Industrial
Breakup by Region
  • North America
    • United States of America 
    • Canada
  • Europe
    • United Kingdom
    • Germany
    • France
    • Italy
    • Others
  • Asia Pacific
    • China
    • Japan
    • India
    • ASEAN
    • Australia
    • Others
  • Latin America
    • Brazil
    • Argentina
    • Mexico
    • Others
  • Middle East and Africa
    • Saudi Arabia
    • United Arab Emirates
    • Nigeria
    • South Africa
    • Others
Market Dynamics
  • SWOT Analysis
  • Porter's Five Forces Analysis
  • Key Indicators for Demand
  • Key Indicators for Price
Competitive Landscape
  • Market Structure
  • Company Profiles
    • Company Overview
    • Product Portfolio
    • Demographic Reach and Achievements
    • Certifications
Companies Covered
  • Fortum Oyj
  • Vattenfall AB
  • Engie Group
  • Danfoss A/S
  • NRG Energy, Inc.
  • Statkraft AS
  • Others
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