Exhaust Heat Recovery System Market Report 2026

The exhaust heat recovery system market size has grown strongly in recent years. It will grow from $20.79 billion in 2025 to $22.33 billion in 2026 at a compound annual growth rate (CAGR) of 7.4%. The growth in the historic period can be attributed to increasing fuel efficiency requirements, growth in heavy-duty vehicle production, expansion of industrial power generation, rising focus on emission reduction technologies, availability of advanced heat exchangers.

The exhaust heat recovery system market size is expected to see strong growth in the next few years. It will grow to $30.04 billion in 2030 at a compound annual growth rate (CAGR) of 7.7%. The growth in the forecast period can be attributed to increasing electrification of powertrains, rising adoption of hybrid systems, expansion of industrial energy recovery solutions, growing regulatory pressure on emissions, increasing investments in energy efficiency technologies. Major trends in the forecast period include integration of waste heat recovery technologies, rising use of thermoelectric generators, expansion of exhaust heat recovery in commercial vehicles, growing adoption in industrial engines, enhanced system efficiency designs.

The tightening of emission regulations is expected to enhance the growth of the exhaust heat recovery system market in the coming years. Emission regulations are legally established standards and guidelines set by governmental and regulatory authorities to control and limit the release of harmful pollutants and greenhouse gases from industrial processes, transportation systems, and other sources to protect public health and the environment. The primary factor behind the tightening of emission regulations is the growing focus on environmental sustainability, as increasing awareness of the long term ecological and societal effects of pollution drives regulators to adopt measures that promote cleaner technologies. Exhaust heat recovery systems assist in meeting these stricter standards by capturing and reusing waste heat from exhaust streams, improving energy efficiency, reducing fuel consumption, and lowering harmful emissions. For example, in March 2024, the U.S. Environmental Protection Agency, a U.S. based federal agency, finalized national pollution standards for passenger cars, light duty trucks, and medium duty vehicles for model years 2027 through 2032 and beyond. These standards are projected to prevent more than 7 billion tons of carbon emissions and generate nearly 100 billion dollars in annual net societal benefits, including 13 billion dollars from improved public health due to cleaner air and 62 billion dollars from reduced fuel, maintenance, and repair costs for drivers. Therefore, the tightening of emission regulations is enhancing the growth of the exhaust heat recovery system market.

Prominent companies operating in the exhaust heat recovery system market are focusing on leveraging government initiatives, such as the Electric Program Investment Charge (EPIC), to drive sustainable energy adoption and infrastructure advancement. The Electric Program Investment Charge (EPIC) is a government-funded initiative that supports research, development, and demonstration of innovative clean energy technologies to accelerate low-carbon progress and promote sustainability. For instance, in January 2025, the California Energy Commission (CEC), a US-based state government agency, implemented a low-temperature waste heat recovery system at Searles Valley Minerals in Trona, California. The system captures vented low-pressure steam to dry V-BOR and reduces natural gas consumption while conserving water by recycling cold condensate through a storage tank to address critical water-resource challenges. This initiative achieved a 15% reduction in natural gas use, underscoring the effectiveness of EPIC-supported clean energy innovations.

In April 2024, Mutares SE & Co. KGaA, a Germany-based private equity holding company, acquired a majority stake in Sofinter Group for an undisclosed amount. Through this acquisition, Mutares aims to strengthen its engineering and technology segment and create synergies in the industrial boiler and heat recovery steam generation (HRSG) market. Sofinter Group is an Italy-based company that manufactures industrial boilers and specializes in exhaust heat recovery systems.

Major companies operating in the exhaust heat recovery system market are MAHLE GmbH, Denso Corporation, Forvia Faurecia SE, Continental AG, Robert Bosch GmbH, Mitsubishi Heavy Industries,Ltd., Valeo SE, Tenneco Inc., Eberspächer Gruppe GmbH & Co. KG, Schaeffler AG, Marelli Holdings Co.,Ltd., Siemens AG, Bosal International N.V., Dana Incorporated, GE Vernova, IHI Corporation, Schneider Electric SE, Viessmann Group, Babcock & Wilcox, Senior Flexonics, EnviroKinetics,Inc., Exergy International SRL, GEA Group, Anguil Environmental Systems, Ormat Technologies,Inc.

North America was the largest region in the exhaust heat recovery system market in 2025. Asia-Pacific is expected to be the fastest-growing region in the forecast period. The regions covered in the exhaust heat recovery system market report are Asia-Pacific, South East Asia, Western Europe, Eastern Europe, North America, South America, Middle East, Africa. The countries covered in the exhaust heat recovery system market report are Australia, Brazil, China, France, Germany, India, Indonesia, Japan, Taiwan, Russia, South Korea, UK, USA, Canada, Italy, Spain.

The exhaust heat recovery system market consists of sales of exhaust gas recirculation (EGR) coolers, thermoelectric generators, Rankine cycle waste heat recovery units, hybrid exhaust heat recovery modules, and after-treatment heat recovery systems. Values in this market are ‘factory gate’ values, that is, the value of goods sold by the manufacturers or creators of the goods, whether to other entities (including downstream manufacturers, wholesalers, distributors, and retailers) or directly to end customers. The value of goods in this market includes related services sold by the creators of the goods.

The market value is defined as the revenues that enterprises gain from the sale of goods and/or services within the specified market and geography through sales, grants, or donations in terms of the currency (in USD unless otherwise specified).

The revenues for a specified geography are consumption values that are revenues generated by organizations in the specified geography within the market, irrespective of where they are produced. It does not include revenues from resales along the supply chain, either further along the supply chain or as part of other products.

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