Exhaust Heat Recovery System Market - Size, Share, Industry Trends, and Forecasts (2025-2032)

By Component:

Based on the component, the market is segmented into turbine, TEG module, compressor, EGR valve, EGR cooler, expander, pump, condenser, heat-exchanger, and evaporator.

Trends in the Component:

• Exhaust gas recirculation (EGR) is widely used to control NOx emissions from diesel engines.
• The increasing adoption of Thermo-electric generators (TEGs) for converting waste heat directly into electricity.

EGR valve accounted for the largest revenue share in the year 2024.

• The exhaust gas recirculation redirects a portion of exhaust gases back into the engine's intake to reduce emissions and control combustion temperatures, improving fuel efficiency and minimizing pollutants.
• Additionally, EGR directs around 30% of the exhaust gas back into the engine, while the remaining 70% reaches the traditional exhaust gas boiler after the turbocharger.
• For instance, Aalborg EGR-HPE has a minimal carbon footprint and is completely integrated with the engine. It provides high-quality service steam, steam temperatures of 400 °c, greatly increased turbine power generation, and effective waste heat recovery at lower engine loads.
• Thus, as per the analysis, the capability of EGR to reduce NOx is driving the exhaust heat recovery system market growth.

Thermo-electric generator is anticipated to register the fastest CAGR during the forecast period.

• Thermoelectric generator works on the principle of ‘Seebeck Effect’ (a phenomenon in which a temperature difference between two dissimilar electrical conductors produces a voltage difference between the two substances), can convert thermal energy into electricity from the temperature differential.
• Thermoelectricity can be used to generate electricity from any source of heat, including renewable sources such as solar and geothermal energy. It can also improve the efficiency of power plants and other industrial facilities by recovering wasted heat and converting it into usable electricity.
• Thermoelectric generators have several advantages such as high-efficiency, long-term stability, and low environmental impact.
• For instance, Researchers at International Advanced Research Center for Powder Metallurgy and New Materials (ARCl), developed a thermoelectric generator which converts the waste heat from an auto exhaust into useful power. It is a 200-Watt thermoelectric generator (TEG) that can convert waste heat from the automotive exhaust into DC power.
• Thus, based on the analysis, the advanced capabilities of thermos-electric generator are driving the exhaust heat recovery system market expansion.

By Vehicle Type:

Based on the vehicle type, the market is segmented into passenger vehicle, heavy commercial vehicle, and light commercial vehicle.

Trends in the Vehicle Type:

• The wide use of EHRS to reduce the fuel consumption in passenger vehicles and thus reducing emissions.
• Exhaust heat recovery system’s cost-effective approach and reduction of greenhouse gas emission per heavy commercial vehicle is increasing its adoption.

HCV accounted for the largest revenue share of 48.21% in the year 2024.

• Heavy trucks have robust suspension systems and more powerful engines, thus are widely utilized for hauling equipment and materials, transporting heavy machinery and pipes, pulling loaded logging trailers.
• Additionally, heavy duty trucks are the most suitable machines to use, as they have large capacities and enhanced transmissions.
• Moreover, the fuel consumption of a 4.5-ton forklift can be reduced through the fast warm-up of the auto-transmission fluid by recovering the heat of exhaust gas.
• For instance, according to the international council of clean transportation, in China the total heavy truck sale accounted for 90% including 55% of diesel trucks and 35% of natural gas powered truck. This is further driving the utilization of EHRS in heavy commercial vehicles.
• Thus, based on the analysis, the wide usage of heavy-commercial vehicles is propelling the exhaust heat recovery system market trends.

Passenger vehicles are anticipated to register the fastest CAGR during the forecast period.

• Hybrid Electric Vehicles (HEVs) and Electric Vehicles (EVs) were introduced in the passenger car market to improve the fuel efficiency of motor vehicles and reduce pollutant emissions.
• Moreover, refining heat recovery system designed to improve efficiency and reduce power consumption requirements.
• For instance, in August 2024, Hanon Systems, announced the development of the world’s first 4th generation heat pump system, a key thermal management component for electric to employ a parallel heat source recovery method, utilizing waste heat from the motor and battery.
• Thus, the increasing integration of heat recovery system in passenger vehicle further drives the exhaust recovery system market trends.

By Technology:

Based on the technology, the market is segmented into exhaust gas recirculation, organic Rankine cycle, turbocharger, and thermoelectric generator

Trends in the Technology:

• Due to the increasing trend of rising fuel prices and concern about global warming, companies are facing pressure to reduce greenhouse gas emissions and improve the energy efficiency of their installations.
• The wide integration of technologies such as organic rankine cycles and thermoelectric generators in automobile exhaust heat recovery.

EGR for the largest revenue share in the year 2024

• With EGR technology, exhaust gas is recirculated and mixed with fresh air in engine, and this mixture has a higher heat capacity and lowers oxygen concentration.
• Moreover, gas turbines use exhaust gas recirculation to modify the combustion process resulting in higher levels of CO2 in the exhaust stream and lower levels of oxygen while simultaneously reducing total exhaust flow to the carbon capture system.
• For instance, in October 2024, GE Vernova’s Exhaust Gas Recirculation (EGR) system is registered to reduce more than 6% of the total cost of the carbon capture facility, as compared to installing carbon capture without the EGR system.
• Thus, based on the analysis, the reduction in carbon emission due to the installation of EGR systems is driving the exhaust heat recovery system market trends.

Turbocharger is anticipated to register the fastest CAGR during the forecast period.

• Turbochargers capture and reuse exhaust gases to drive a turbine that boosts engine performance, becoming and ideal option in both automotive and industrial applications.
• Turbochargers significantly improve fuel efficiency and reduces emissions aligning with stringent environmental regulations and consumer demand for high-performance vehicles.
• For instance, Cummins launched new turbocharger designed specifically for hydrogen internal combustion engines (H2 ICE). This advancement in turbocharging technology marks a significant milestone for heavy-duty commercial on-highway applications.
• Thus, the advanced functionalities of turbocharger is driving the exhaust heat recovery system market size.

By Sales Channel:

Based on the sales channel, the market is segmented into OEMs and aftermarket

Trends in the Sales-channel:

• Aftermarket upgraders is the use of a ceramic coating applied via thermal spraying for reducing heat loss.
• The increasing trend of OEMs electrification and hybridization for enhancing fuel efficiency and reducing carbon footprints.

OEMs for the largest revenue in the year 2024 and is also anticipated to register the fastest CAGR during the forecast period.

• OEMs produce components to sell to other companies that integrate the parts into their products.
• Moreover, OEMs are known for their strict requirements and specifications while sourcing products and services.
• For instance, Thermal Systems is a leading EPC/OEM organization with nearly 4 decades of experience in providing turnkey solutions from Concept to commissioning of heat recovery systems and custom-designed heat recovery equipment for varied applications in process & power industries.
• Thus, based on the analysis, the capabilities of OEMs for product optimization, and enhanced manufacturing processes is driving the exhaust heat recovery system market size.