Schedule a Meeting
Get a SampleJanuary 2025
The global district heating market size is estimated at USD 203.01 billion in 2025 and is predicted to reach around USD 319.10 billion by 2034, accelerating at a CAGR of 5.16% from 2025 to 2034. The Europe district heating market size is estimated at USD 97.44 billion in 2025 and is expanding at a CAGR of 5.18% during the forecast period. The market sizing and forecasts are revenue-based (USD Million/Billion), with 2024 as the base year.
The global district heating market size was estimated at USD 192.98 billion in 2024 and is predicted to increase from USD 203.01 billion in 2025 to approximately USD 319.10 billion by 2034, expanding at a CAGR of 5.16% from 2025 to 2034.
The Europe district heating market size was estimated at USD 92.63 billion in 2024 and is predicted to be worth around USD 153.17 billion by 2034, at a CAGR of 5.18% from 2025 to 2034.
Europe is the clear leader in the district heating market, driven by several interrelated factors. The continent boasts an established infrastructure that has evolved over decades, allowing for efficient and reliable heating solutions across densely populated urban areas.
In contrast, the Asia-Pacific region is witnessing remarkable growth within the district heating market, fueled by rapid urbanization and industrialization. Countries like China and South Korea are experiencing unprecedented demands for energy-efficient and cost-effective heating solutions. The region's swift urban population growth and expansion of both residential and commercial infrastructures are contributing to a rising need for centralized heating networks. Furthermore, the industrial sector's significant energy consumption has made district heating an attractive option for meeting large-scale heating demands while integrating renewable energy sources.
The district heating is a cost-effective method of transferring heat generated in a central place to multiple buildings such as companies, residences, and factories via a network of insulated pipes. The heat is employed in a variety of household and commercial applications including room and floor heating as well as water heating. The central solar heating, geothermal heating, and heat waste from nuclear power plants are the most common sources of heat. The district heating is particularly fuel efficient, and its flexibility allows for replacement of greener alternatives, both of which are anticipated to drive the growth of the district heating market during the forecast period.
The regulations aimed at reducing greenhouse gas emissions as well as increased awareness about the waste recycling will drive the greater demand for district heating in the market. The strict regulations aimed at improving building energy efficiency through the use of sustainable technologies will help the district heating market grow at a rapid pace. Due to its cost-effectiveness and environmental friendliness, the global district heating market has seen a substantial growth. The heat supply from district heating is produced in an environmentally sustainable manner, reducing greenhouse gas emissions and positively impacting the product demand globally. The government initiatives aimed at reducing carbon emissions as well as increased adoption of sustainable energy will help to boost the growth of the market.
The natural gas has steadily gained a healthy amount of market share in the global district heating industry as the trend toward power generation has switched away from fossil fuels, primarily due to environmental determinants. The natural gas' multiple advantages, including as lower costs and lower carbon emissions combined with outstanding efficiency, have aided the segment's expansion. The growing natural gas exploration activity in each region is also a factor in the growing popularity of these systems.
In recent years, non-conventional energy sources such as solar and wind have gained popularity. In various developed and developing countries, there has been a shift toward solar energy. However, since the district heat network serves a large number of people, and renewables are a newbie to the area, they have a limited market compared to natural gas. The natural gas-fired district heating has a higher established and installed capacity than renewable-fired district heating. However, due to the high cost of renewables, the money generated by using them surpasses that of natural gas. This trend is expected to continue, with the share of renewables increasing at a consistent rate.
| Report Coverage | Details |
| Market Size in 2024 | USD 192.98 Billion |
| Market Size in 2025 | USD 203.01 Billion |
| Market Size by 2034 | USD 319.10 Billion |
| Market Growth Rate from 2025 to 2034 | CAGR of 5.16% |
| Largest Market | Europe |
| Fastest Growing Market | Asia Pacific |
| Base Year | 2024 |
| Forecast Period | 2025 to 2034 |
| Segments Covered | By Heat Source, By Plant Type, and By Application |
| Regions Covered | North America, Europe, Asia-Pacific, Latin America, and Middle East & Africa |
In 2024, the renewable segment dominated the district heating market. As public and government concern about environmental safety has grown in recent years, power companies have shifted their attention from fossil fuels to renewable sources. This element boosts the use of renewable energy sources all over the world.
The natural gassegment, on the other hand, is predicted to develop at the quickest rate in the future years. Around the globe, the exploration efforts are increasing. In comparison to fossil fuels, natural gas plants are far more cost effective and have fewer negative environmental effects.
In 2024, the combined heat and power (CHP) segment dominated the district heating market. The combined heat and power (CHP) systems allow for the production of both electricity and heat for the heating systems. This has been a major component in their growth in recent years.
The boiler segment, on the other hand, is predicted to develop at the quickest rate in the future years. Due to rising global demand for power, the boiler segment is also expected to rise during the forecast period. The installation of various energy plants is similarly on the rise all across the world.
The residential segment dominated the district heating market in 2024 and garnered a revenue share of 60%. Due to the rising need for heating networks at residential locations for diverse functions such as water heating and space heating, the residential category has the greatest market share during the forecast period.
The industrial segment is the fastest growing segment of the district heating market in 2023. With the current transformation, infrastructural development is also rising in the industrial sector. The use of heating spaces in the industrial sector is increasing as a result of this issue.
Uniper
Approval- In October 2024, Uniper launched the sale of its district heating business, according to the European Commission’s state aid approval, since the heating business took place in the Ruhr area.
Vattenfall
Ownership- In March 2025, Vattenfall estimates the ownership of heating operations in the UK, Sweden, and the Netherlands, including potential divestment. The company is a supplier to both B2B and B2C customers.
Hungary
Initiative- In April 2025, the Hungarian Government launched the largest district heating development program under the initiative of replacing natural gas. The budget for heating service infrastructure was 45 billion forints (113 million euros). 25 billion forints (63 million euros) were spent on energy efficiency and 50 million euros on renewable energy-based heat sources.
By Heat Source
By Plant Type
By Application
By Geography
For inquiries regarding discounts, bulk purchases, or customization requests, please contact us at sales@precedenceresearch.com
No cookie-cutter, only authentic analysis – take the 1st step to become a Precedence Research client
January 2025