Blueprint for Success: Overcoming Challenges in Industrial Heat Decarbonization Projects

This briefing by RMI provides a guide for technology providers and partners to navigate the execution of first-of-a-kind (FOAK) industrial heat decarbonization projects in the United States. It identifies common cost-inflating pitfalls—such as poor customer connections, inaccurate site evaluations, and ambiguous contracts—and offers five recommended practices to increase the likelihood of reaching a final investment decision (FID). The document emphasizes that successful FOAK projects are essential for creating replicability and unlocking a potential 2%–5% overall emissions reduction in the US.

• Industrial heat processes account for 25% of global final energy demand. In the United States, implementing available industrial heat decarbonization technologies through FOAK projects could result in an overall emissions reduction of 2%–5%, while also improving worker safety and reducing local air pollution.
• Site-specific integration costs for industrial heat decarbonization can represent up to 25% of total project costs. These costs are influenced by variables such as physical space, distance between heat sources and sinks, zoning and permitting, and plant downtime limitations, which may force the selection of less complex modular units over higher-efficiency options.
• Successful project execution requires deep collaboration with the customer, including the identification of a project champion with decision-making control (such as a CEO, plant manager, or sustainability manager) and the engagement of a balanced team from legal, capital projects, and plant management.
• To avoid cost and time overruns, developers should prioritize early-stage engineering and 'boots-on-the-ground' assessments. This includes conducting multiple plant walkthroughs to identify specific heat needs and utilizing multiple engineers to review designs to reduce estimation errors.
• Project oversight should be managed through steering committees that meet weekly to vet contractors and share challenges. Vetting must be intentional, as contractors experienced in mature technologies may lack the specific skillsets required for FOAK projects, potentially leading to costly delays if they must upskill during implementation.
• Contract structures for FOAK projects should prioritize clear delineations of responsibility for operational failures and avoid lump-sum or guaranteed maximum price contracts. Industry leaders prefer 'time and materials with a fixed minimum price' structures to better manage the inherent uncertainties of first-of-a-kind integration.

APA

RMI (2025). Blueprint for Success: Overcoming Challenges in Industrial Heat Decarbonization Projects. https://rmi.org/resources/blueprint-for-success-overcoming-challenges-in-industrial-heat-decarbonization-projects/

Chicago

RMI. Blueprint for Success: Overcoming Challenges in Industrial Heat Decarbonization Projects. 2025. https://rmi.org/resources/blueprint-for-success-overcoming-challenges-in-industrial-heat-decarbonization-projects/.

Wikipedia

{{cite report |author=RMI |title=Blueprint for Success: Overcoming Challenges in Industrial Heat Decarbonization Projects |date=3 February 2025 |url=https://rmi.org/resources/blueprint-for-success-overcoming-challenges-in-industrial-heat-decarbonization-projects/ |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{rmi2025blueprint, author = {{RMI}}, title = {{Blueprint for Success: Overcoming Challenges in Industrial Heat Decarbonization Projects}}, institution = {RMI}, year = {2025}, month = feb, url = {https://rmi.org/resources/blueprint-for-success-overcoming-challenges-in-industrial-heat-decarbonization-projects/}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }