Data Center Waste Heat Recovery & Reuse Market worth $1.29 billion by 2031
The report "Data Center Waste Heat Recovery & Reuse Market by Equipment Type (Heat Exchangers, Heat Pumps), Recovery Mechanism (Air-Based Recovery, Liquid Single-Phase Recovery), Data Center Type, End Use of Recovered Heat, and Region - Global Forecast to 2031" is projected to grow from USD 0.46 billion in 2026 to USD 1.29 billion by 2031, registering a CAGR of 22.9% during the forecast period (2026-2031).
Browse 200 market data Tables and 67 Figures spread through 250 Pages and in-depth TOC on "Data Center Waste Heat Recovery & Reuse Market by Equipment Type (Heat Exchangers (HX), Heat Pumps (HP), Coolant Distribution Units (CDUs), HRV/ERV Units, Thermal Energy Storage (TES), Absorption Chillers, ORC Units, Others), Recovery Mechanism (Air-Based Recovery, Liquid Single-Phase Recovery, Phase-Change Recovery, Heat Pump Temperature Upgrade, Thermodynamic Cycle Conversion), DC Type (Hyperscale, Colocation, Enterprise On-Premise, HPC/Supercomputing, Others (Edge, Modular)), End Use of Recovered Heat (District Heating Networks, Building/Space Heating, Domestic Hot Water (DHW), Industrial Process Heat, Agriculture & Aquaculture, Self-Cooling (Absorption), Others (ORC Power Generation)), and Region – Global Forecast to 2031"
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As data centers are looking for better ways to increase energy efficiency and decrease carbon output while maximizing the value of the energy used for IT infrastructure, the Data center waste heat recovery & reuse market is developing rapidly. Technologies include heat exchangers, heat pumps, coolant distribution units, thermal energy storage systems, absorption chillers, and Organic Rankine Cycle (ORC) units that allow for the capture and re-use of waste heat to be used for heating, cooling, or industrial applications. The primary drivers of market growth are globalization of hyperscale data centers, an increasing number of AI and high-performance computing workloads, non-stop demand for compliance with sustainability regulations, and increased integration with district heat networks. On the other hand, there are challenges to this segment, such as high capital requirements for initial investment, challenges related to complex integration with existing data center infrastructure, lack of nearby complete heat off-takers, and dissimilar regional policies associated with re-using heat, which can have an impact on project feasibility and deployment timelines.
By DC type segment, hyperscale to lead the data center waste heat recovery & reuse market, in terms of value, during the forecast period.
Hyperscale is the largest DC type segment in the data center waste heat recovery & reuse market because hyperscale facilities generate significantly higher volumes of recoverable waste heat than any other data center category due to their massive computing capacity, high server density, and continuous operational loads. Operators such as cloud service providers and large technology companies are under increasing pressure to improve energy efficiency, reduce carbon emissions, and achieve ambitious sustainability targets, making waste heat recovery an attractive investment. The large thermal output of hyperscale facilities also improves the economic feasibility of deploying heat exchangers, heat pumps, thermal energy storage systems, and other recovery equipment at scale. Furthermore, hyperscale data centers are increasingly adopting liquid cooling technologies, which enable more efficient heat capture and higher-quality heat recovery. Their ability to support district heating and large-scale heat reuse projects further strengthens their position as the dominant segment in the market.
By end-use recovery of heat, district heating networks segment to lead the data center waste heat recovery & reuse market, in terms of value, from 2026 to 2031.
District heating networks represent the largest end-use recovery of heat segment in the data center waste heat recovery & reuse market because they offer the most scalable and economically viable pathway for utilizing large volumes of low- to medium-temperature waste heat generated by modern data centers. As hyperscale and colocation facilities continue to expand, particularly in Europe and parts of North America, operators are increasingly partnering with municipal utilities to supply recovered heat to district heating systems serving residential, commercial, and public buildings. These networks provide a continuous and stable heat demand, enabling higher heat recovery rates and stronger project economics than many other end-use applications. Government decarbonization targets, carbon reduction regulations, and incentives promoting circular energy systems further support adoption. Additionally, advances in heat pump technology allow waste heat to be upgraded efficiently, making district heating networks the preferred and largest outlet for recovered data center thermal energy.
Europe to be the fastest-growing data center waste heat recovery & reuse market during the forecast period.
The data center waste heat recovery & reuse market is anticipated to grow the fastest in Europe. This is due to the region's ambitious targets for decarbonization and its supportive regulatory frameworks. Additionally, there are large investments being made into developing sustainable digital infrastructure. The region is working towards establishing circular energy systems and encouraging the reuse of waste heat through policies that aim to improve overall energy efficiency and reduce overall greenhouse gas emissions. In the past few years, the rate of growth for hyperscale and colocation data center development has increased rapidly, particularly within the Nordic region countries like Germany, the Netherlands and France. This means that there is an increasing volume of thermal energy available from these newly developed sites that can be recovered and used elsewhere. Furthermore, the existence of extensive district heating networks across Europe provides a pre-existing infrastructure that could allow for the large-scale use of recovered heat. The adoption of liquid cooling technologies continues to grow, as do government incentives for energy recovery projects. There is also a high level of collaboration between data center operators, utilities and municipalities, all of which are helping to drive the growth of this regional market forward.
Key Players
To enable an in-depth understanding of the competitive landscape, the report includes the profiles of some top players, such as Danfoss (Denmark), ALFA LAVAL (Sweden), Everllence SE (Germany), Vertiv Group Corp. (US), Johnson Controls (Ireland), Trane Technologies plc (Ireland), Rittal GmbH & Co. KG (Germany), Turboden S.p.A (Italy), Submer (Spain), and Munters Group AB (Sweden).
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