Asia-Pacific District Heating Market Size, Share, Growth and Forecast, 2025-2035

Cogeneration networks heat cities as clean sources expand

The Asia-Pacific district heating market was valued at USD 56.89 billion in 2025 and is projected to increase from USD 60.05 billion in 2026 to USD 95.48 billion by 2035, registering a CAGR of 5.29% during 2026–2035. Demand comes from apartment heating in northern Chinese cities, district energy in South Korean new towns and steam supply to industrial parks across the region. China held the largest share, 89.0% in 2025, because large coal and gas cogeneration plants feed city networks that heat hundreds of millions of square meters each winter. Emerging Asia-Pacific is the fastest-growing market at 6.73% a year, as Mongolia rebuilds the Ulaanbaatar network with international finance. South Korea adds steady growth from new housing connections, while Japanese networks serve dense business districts. Heat sources are also changing, because nuclear plants, geothermal wells and long-distance waste heat pipelines now supply city networks that once relied on small coal boilers.

What does the regional heat supply estimate cover?

The estimate measures the value of heat sold through piped networks to buildings and industrial users in China, South Korea, Japan and emerging Asia-Pacific markets such as Mongolia. It covers space heating, domestic hot water and process heat delivered as hot water or steam, valued at the tariffs that customers pay. Sales billed by floor area, by metered energy or by combined capacity and energy charges all count toward the total.

The estimate excludes district cooling, electricity sold by cogeneration plants and equipment sales such as boilers, pipes and heat exchangers. The value chain runs from heat producers, including cogeneration plants, heat-only boilers, nuclear stations, geothermal wells and industrial waste heat sources, through transmission and distribution networks to municipal, private and concession operators that bill households, offices and factories.

Space heating leads while process heat grows fastest

Why does space heating dominate service demand?

Based on service type, the market is categorized into space heating, domestic hot water and process heat. Space heating led with a 74.0% share of 2025 value, because northern Chinese cities heat apartments and offices through long winter seasons. Process heat grows fastest at 5.98% a year, as industrial parks replace their own small boilers with steam bought from nuclear and cogeneration plants under long supply contracts.

How do fossil fuels still lead the heat source mix?

Based on heat source, the market is categorized into fossil-fuel heat, recovered heat, renewable heat and nuclear heat. Fossil-fuel heat led with a 78.0% share of 2025 value, because coal and gas cogeneration plants still supply most city networks in China and South Korea. Nuclear heat grows fastest at 11.22% a year from a small base, as Haiyang, Tianwan and Shidao Bay show that reactors can heat homes and supply industrial steam.

Why do residential buildings anchor heat sales?

Based on end user, the market is categorized into residential buildings, commercial buildings and industrial facilities. Residential buildings led with a 68.0% share of 2025 value, because apartment complexes form the core customer base for Chinese and Korean operators, such as the 528,492 household users of Jilin Chuncheng Heating in 2025. Industrial facilities grow fastest at 5.88% a year, as chemical and manufacturing parks buy steam under long contracts.

How do high-temperature networks shape the technology mix?

Based on technology, the market is categorized into high-temperature water networks, low-temperature water networks and steam networks. High-temperature water networks led with a 76.0% share of 2025 value, because most Chinese and Korean networks were built around large cogeneration plants and long transmission mains. Low-temperature water networks grow fastest at 9.18% a year, as geothermal wells, heat pumps and waste heat sources work best at lower supply temperatures.

Urban connections, Korean plans and clean heat lift sales

How does connected urban floor area lift heat sales?

Each new apartment block in a northern Chinese city adds a paying heat customer for decades, which makes new housing the main source of demand growth. CHN Energy reported that its heating coverage passed 900 million square meters in 2024 after it added 77.31 million square meters during the year, Heat Exchanger World reported. The company also delivered 540 million gigajoules of heat in 2024, up 6.7% from 2023. Beijing expects its urban central heating area to reach about 1.07 billion square meters in the 2025 to 2026 season, Xinhua reported. Jilin Chuncheng Heating also expanded its service area by 4.33% to 72.781 million square meters in 2025. As a result, space heating demand in China keeps rising as more connected floor area enters each heating season.

Why does Korea's district energy plan add new customers?

South Korea is extending district energy into new housing and industrial complexes, which adds steady connections for its operators. The Ministry of Trade, Industry and Energy finalized the sixth basic plan for district energy supply on Feb. 27, 2025, and set a target of 4.46 million connected households by 2028, according to Etoday. That target equals about 21.3% of all Korean housing and adds about 680,000 households to the 3.78 million served in 2023. The plan also raises the number of industrial complex district energy sites from 45 to 54. GS Power already supplies about 380,000 households in the Anyang and Bucheon areas, according to GS Energy. As a result, South Korea holds a 6.5% share of 2025 value.

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How do clean heat sources reshape network supply?

Geothermal wells, recovered heat and other low-carbon supply now feed city networks, which lets operators meet new demand while they cut coal use. Sinopec reported geothermal heating coverage of 120 million square meters at the end of 2024, serving 1.2 million households in more than 70 cities, according to ThinkGeoEnergy. That figure is about double the 2020 level and replaces nearly 2.3 million tons of standard coal each year. Beijing prohibited new coal and gas heating systems in new buildings in November 2023, with limited exceptions, according to the Regulatory Assistance Project. Northern China also had 41 million clean heating users by the end of 2024, Xinhua reported. In turn, renewable and recovered heat gain share as operators retire small coal boilers across northern cities.

Why do industrial parks buy more piped steam?

Chemical and manufacturing parks increasingly buy steam from large central plants instead of running their own small boilers. China's first industrial nuclear steam project, Heqi-1 at Tianwan, began operation on June 20, 2024, and is expected to supply 4.8 million tons of steam a year to the Lianyungang petrochemical base, World Nuclear News reported. The project replaces about 400,000 tons of standard coal a year through a pipeline of about 23 kilometers. Huadian Power International also said in March 2026 that its 55 controlled plants sit mainly in electricity and heat load centers across 15 provinces. Jilin Chuncheng Heating served 69,593 industrial, commercial and other non-residential users in 2025. As a result, process heat grows fastest among service types at 5.98% a year.

Waste heat, nuclear supply and heat pumps reshape networks

How is long-distance waste heat transport rising?

Cities are piping surplus heat from distant power plants, which turns waste heat into a main supply source for whole districts. Jinan now draws heat from two thermal power plants more than 100 kilometers away, and the city expects the new source to cut standard coal use by 1.3 million tons per heating season, Xinhua reported in November 2025. The same report said Jinan expected to phase out 54 coal-fired boilers in its urban area during 2025. CHN Energy's Feixian project in Shandong also uses a 45.4-kilometer pipeline to serve 210,000 households. These projects rely on waste heat recovery systems at power plants and industrial sites. As a result, recovered heat gains share across the forecast period.

Why is nuclear heat emerging in coastal provinces?

Reactor owners in Shandong, Liaoning and Jiangsu are selling heat from existing units, which gives nearby cities a zero-carbon baseload source. The Warm Nuclear No. 1 project, the third phase of the Haiyang commercial heating scheme, began operation on Nov. 25, 2023, with a 23-kilometer link to Haiyang and Rushan, according to World Nuclear News. The project can heat 12.5 million square meters for about 400,000 people. The scheme has delivered 4.56 million gigajoules of zero-carbon heat and replaced about 390,000 tons of raw coal. The Shidao Bay-1 residential heating project also started operating in April 2024, NucNet reported. As a result, nuclear heat grows fastest among heat sources at 11.22% a year.

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Can low-temperature networks open room for heat pumps?

Networks that run at lower supply temperatures can use heat sources that older steam and hot water mains cannot, which creates an opening for heat pump suppliers and surplus renewable power. Korea's sixth basic plan includes power-to-heat pilot projects that use surplus renewable electricity and incentives for heat pumps that draw on low-temperature heat. The same plan introduces a clean heat certification system and an updated national heat map with heat trading guidelines. China's 2022 to 2025 clean winter heating policy placed more emphasis on new energy heating and heat pumps, according to the Regulatory Assistance Project. Suppliers of industrial heat pumps can serve these projects where operators recover low-grade heat. As a result, low-temperature water networks grow fastest among technologies at 9.18% a year.

Is there room for network upgrades in emerging markets?

Aging networks in Mongolia and Central Asia offer an opening for operators and suppliers with modernization experience. The World Bank approved a USD 41 million credit for the Ulaanbaatar Heating Sector Improvement Project on April 24, 2020, to expand capacity and improve network efficiency, according to the World Bank. The bank rated progress toward that objective satisfactory in November 2024. Korea District Heating Corporation also launched its K-Heating initiative in Uzbekistan in August 2025, with a team that advises local operators on network modernization, Kun.uz reported. The company's northern business strategy targets Central Asia and Mongolia. As a result, emerging markets gain share across the forecast period as lenders fund new pipelines.

Coal reliance, aging pipes and thin finance slow growth

Why does coal dependence keep supply costs exposed?

Most networks in northern China still draw heat from coal-fired cogeneration plants and boilers, which ties operators to coal prices and emission rules. China's 2017 to 2021 clean winter heating plan for northern cities focused on phasing out small coal boilers and loose coal, according to the Regulatory Assistance Project. As a result, operators face rising costs to retrofit or replace these plants. Companies respond by signing waste heat contracts, adding geothermal and biomass sources, and planning heat storage at retired coal sites, as Huadian Power International described in March 2026.

How do aging pipelines raise losses and risks?

Old pipelines lose heat and fail more often, which raises costs for operators and safety risks for cities. China plans to build and upgrade about 770,000 kilometers of urban underground pipelines during 2026 to 2030, with heating systems among the priorities, People's Daily reported in June 2026. The government earmarked 160 billion yuan for 2026 through ultra-long special treasury bonds. However, heat operators must still fund much of their own network work. Companies respond with smart monitoring and staged replacement of the oldest mains.

Why does fragmentation limit scale in Japan?

Japan's heat supply business is fragmented and concentrated in dense business districts, which limits scale for each operator. The Ministry of Economy, Trade and Industry listed 73 registered heat supply operators as of June 1, 2022, and many of them serve only one or two districts. Hokkaido Heat Supply, for example, serves central Sapporo and the Kosei district. As a result, growth depends on urban redevelopment rather than new housing. Operators respond by linking new buildings to existing plants and adding gas cogeneration units.

How does thin finance slow emerging-market repairs?

Emerging markets struggle to fund network repairs, because their utilities depend on outside lenders for large projects. The EBRD, the European Union and the Austrian government combined EUR 15.5 million for Ulaanbaatar pipeline upgrades, which the EU delegation described in November 2024 as the first major foreign investment in the city's central heating system in over two decades. As a result, progress depends on concessional loans and grants. Operators respond by upgrading the most congested pipeline sections first.

China dominates while emerging markets grow fastest

Why does China dominate regional heat sales?

China held 89.0% of 2025 value and grows at 5.28% a year, because northern cities connect new housing to large cogeneration networks every year. CHN Energy's Lingwu plant is the largest cogeneration facility in China by heating area, with more than 70 million square meters. Coastal provinces also add nuclear heat and industrial steam, as the Heqi-1 project draws on nuclear steam supply systems at Tianwan to serve a petrochemical base. Geothermal heating from Sinopec also adds supply in Hebei, Shaanxi and Henan.

How does South Korea grow through new towns?

South Korea held a 6.5% share of 2025 value and grows at 5.03% a year, because district energy serves new towns and industrial complexes around Seoul and other cities. GS Power's Anyang plant began commercial operation of a 500 MW unit in February 2022 and reaches over 93% efficiency in district heating mode, according to GE Vernova. Operators rely on gas-fired combined heat and power systems to supply both electricity and heat. Korea District Heating Corporation also runs a cogeneration plant in Pangyo.

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Why is emerging Asia-Pacific the fastest-growing market?

Emerging Asia-Pacific held a 3.0% share of 2025 value and grows fastest at 6.73% a year, because Mongolia is rebuilding the Ulaanbaatar network with international finance. Recent pipeline work in the Bayangol and Bayanzurkh districts lets the network connect 150 to 200 more 12-story residential buildings. Mongolia's urban population reached about 2.5 million in 2024, according to World Bank data. Korea District Heating Corporation's northern strategy also targets Mongolia and Central Asia.

Why does Japan stay a niche business-district market?

Japan held a 1.5% share of 2025 value and grows at 3.73% a year, the slowest pace in the region, because heat networks serve dense business districts rather than whole cities. Hokkaido Heat Supply operates in central Sapporo and the Kosei district, where new heat supply regulations were approved on March 5, 2026, and took effect on April 1, 2026, according to the Ministry of Economy, Trade and Industry. Growth therefore follows office and civic redevelopment projects in large cities.

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Nuclear steam, Korean plans and pipe upgrades, 2024 to 2026

Long-distance mains and nuclear extraction reshape supply

• Long-distance transmission mains carry heat from power plants more than 100 kilometers away, which lets cities such as Jinan retire small coal boilers.
• Nuclear heat extraction draws steam from reactor secondary circuits, which lets plants such as Tianwan supply industrial parks without burning coal.
• Medium-deep geothermal wells supply heat directly to city networks, which helps Sinopec serve 1.2 million households in more than 70 cities.
• Power-to-heat units convert surplus renewable electricity into network heat, which South Korea plans to test under its sixth basic plan.

Power groups and city utilities compete on heat sources

Competition combines state-owned power groups, municipal and provincial heat utilities, energy majors and private operators. In China, CHN Energy, Huadian Power International and State Power Investment Corporation sell heat from coal, gas and nuclear plants into city networks and industrial parks. Local distributors such as Jilin Province Chuncheng Heating buy cogeneration heat and bill households directly. Sinopec Star, the geothermal development arm of Sinopec, competes with renewable heat in northern cities. In South Korea, Korea District Heating Corporation serves new towns such as Pangyo, while GS Power focuses on the Anyang and Bucheon areas. In Japan, Hokkaido Heat Supply serves central Sapporo and the Kosei district. Companies compete on access to low-cost heat sources, long concession rights, network reliability and the ability to replace coal with recovered, renewable and nuclear heat.

Companies profiled and their roles in this market

Credence Research view on regional piped heat demand

Credence Research's view is that district heating in the Asia-Pacific region will grow at a steady pace, because new urban connections in China and South Korea keep adding customers while clean heat sources lower coal use. Space heating keeps the largest service share, but process heat grows faster as industrial parks buy piped steam. China stays the largest market, while emerging Asia-Pacific grows fastest from a small base. However, coal dependence, aging pipelines and thin finance in poorer cities will slow progress. Operators that secure recovered, geothermal and nuclear heat should gain share fastest.

How the regional piped heat estimate was built

The report uses 2025 as the base year on a calendar basis, and market values come from the Credence Research model. That model combines connected floor area and household data, heat delivery volumes, tariff structures, operator filings and public investment programs. Market shares, segment splits and growth rates are Credence Research estimates. Sources used are official statistics, government and ministry releases, multilateral lender project records, company filings and releases, and news reports, and no interviews or surveys were used.

Clean sources and new connections carry growth to 2035

Asia-Pacific district heating value is expected to reach USD 95.48 billion by 2035, a 5.29% CAGR during 2026–2035, as new connections and cleaner heat sources carry growth. China will add floor area and replace small coal boilers with waste heat, geothermal and nuclear supply. South Korea should reach its 2028 household target and expand power-to-heat projects. Faster pipeline renewal would raise this outlook, while weak housing construction or delays to multilateral finance in Mongolia would lower it.

Note: The depth of individual sections depends on data availability for this market. Volume, capacity, trade and other unit-based metrics are included where applicable.