A new report from the University of Oxford argues that electrification of heavy industry has shifted from a theoretical possibility to a strategic necessity, offering factories a path to lower emissions and reduced exposure to fossil fuel price shocks.
The report, titled High Voltage, draws on more than 1,600 climate scenarios and engineering evidence to conclude that up to 90 per cent of industrial energy demand could be met using existing and emerging electric technologies. Its authors contend that the barriers to achieving this are now primarily political and financial rather than technical.
The security case, not just the climate case
The timing of the report reflects a period of sustained energy disruption. Europe’s gas crisis in 2022 demonstrated how sharply fuel price spikes can hit industrial operations. Tensions around the Strait of Hormuz have since revived concerns about further supply disruption. In Asia, the 2022 surge in liquefied natural gas prices forced temporary factory shutdowns in Pakistan and Bangladesh, and pushed up manufacturing costs in Japan and South Korea.
Jan Rosenow, professor of energy and climate policy at Oxford, has argued that industry has now experienced two major fossil fuel disruptions in three years. That pattern, the report suggests, reflects a structural vulnerability in how heavy industry is powered, not a series of isolated incidents.
Cassandra Etter-Wenzel, a researcher at Oxford’s Environmental Change Institute, said the modelling and engineering assessments point in the same direction: large-scale electrification is technically within reach.
The report frames the security argument as potentially as compelling as the climate one. Factories drawing power from domestic or regional clean electricity sources face less exposure to shipping chokepoints, pipeline failures, and imported fuel price volatility. For industries able to make the switch, electrification could act as a buffer against future energy crises as much as a tool for emissions reduction.
BASF’s heat pump project as a large-scale example
Real-world projects are beginning to reflect the scale the Oxford analysis describes. BASF has become one of the most prominent examples of industrial electrification at scale. The German chemicals group is backing a large heat pump installation at its Ludwigshafen site, which it describes as among the world’s largest projects of this kind.
Germany’s economy ministry approved funding for the project in October 2024. Construction began in early 2025. In February 2026, BASF announced the delivery of a 95-tonne plate falling-film evaporator for the system.
According to BASF, the unit will use renewable electricity and waste heat to generate carbon-dioxide-free steam for its Verbund production network. Commissioning is planned for mid-2027. The company says the project could produce up to 500,000 tonnes of steam per year and reduce emissions from formic acid production by as much as 98 per cent, equivalent to around 100,000 tonnes of carbon dioxide annually.
Public funding played a role in advancing the project, a point Oxford’s report uses to illustrate the broader argument about the need for policy support.
Policy gaps remain the central obstacle
Oxford identifies the policy environment as the primary constraint on faster progress. Electricity in many markets remains subject to taxes and levies that make it more expensive than gas, even where the electric technology would produce lower emissions and greater energy security.
Grid connection queues, slow permitting processes, and uncertain connection rules continue to delay projects that are otherwise ready to proceed. These are administrative and regulatory problems, the report implies, and therefore solvable.
Financing presents a separate challenge, particularly for first-of-a-kind installations where the risk profile is less familiar to investors. Oxford argues that public support instruments, including carbon contracts for difference, grants, and concessional loans, are needed to reduce risk and draw in private capital. BASF’s project illustrates how such instruments can move a technically viable project towards construction.
What the modelling suggests about scale
The 90 per cent figure for electrifiable industrial energy demand is central to Oxford’s argument. It rests on both the current state of electric heating and processing technologies and the trajectory of emerging alternatives. The report does not claim this transition is imminent or automatic. It argues that the technical foundation exists, and that the pace of progress will depend on how quickly policy and financing gaps are closed.
For investors and policymakers tracking industrial decarbonisation, the report’s contribution is to integrate the energy security argument with the climate one. The two have often been treated separately in policy discussions. Oxford’s analysis suggests they point towards the same set of actions.
