Refinery Electrification Market - Global Industry Size, Share, Trends, Opportunity, and Forecast Segmented By Technology (Renewable Energy Sources, Energy Storage and Power Electronics), By Refinery Type (Crude oil Refineries, Petrochemical Refineries and Biorefineries), By Application (Process Heating, Electric Motors and Others), By Region & Competition, 2021-2031F

Forecast Period	2027-2031
Market Size (2025)	USD 21.65 Billion
CAGR (2026-2031)	9.74%
Fastest Growing Segment	Electric Motors
Largest Market	North America
Market Size (2031)	USD 37.81 Billion

Market Overview

The Global Refinery Electrification Market will grow from USD 21.65 Billion in 2025 to USD 37.81 Billion by 2031 at a 9.74% CAGR. Refinery electrification entails the strategic substitution of fossil-fuel-driven combustion processes and steam turbines with electrical technologies, such as electric process heaters, e-boilers, and electrified compressors. This transition is primarily propelled by stringent environmental regulations aiming for sector-wide decarbonization and the operational necessity to enhance energy efficiency within downstream operations. Furthermore, the decreasing cost of renewable energy generation serves as a critical economic catalyst, incentivizing refineries to integrate low-carbon power sources. According to the International Renewable Energy Agency, in 2024, 91% of newly commissioned renewable power capacity was more cost-effective than the cheapest fossil fuel-fired alternatives, underscoring the growing financial viability that supports this industrial shift.

However, the market encounters a significant challenge regarding the capacity and reliability of existing electrical grid infrastructure. Refineries require a massive, consistent power load which often necessitates substantial capital expenditure for grid modernization and on-site substation upgrades to handle the increased demand without disrupting critical operations. This financial and logistical hurdle is compounded by the complexity of retrofitting legacy facilities, where integrating modern electrical systems into aged infrastructure presents acute engineering difficulties. Consequently, despite the favorable economic and regulatory drivers, these infrastructural constraints pose a formidable barrier to the rapid expansion of electrification across the global refining sector.

Key Market Drivers

The implementation of stringent decarbonization mandates and environmental regulations acts as the primary catalyst for the Global Refinery Electrification Market. Governments are enforcing stricter emission limits, compelling downstream operators to replace carbon-intensive combustion processes with electrified alternatives to maintain their license to operate. To facilitate this transition, public entities are providing financial mechanisms to lower adoption barriers. According to the U.S. Department of Energy, March 2024, in the 'Industrial Demonstrations Program Selections' announcement, the administration allocated up to USD 6 billion to fund projects focused on decarbonizing energy-intensive industries, including refining. This regulatory pressure forces companies to prioritize electrification strategies to align with national net-zero trajectories.

Advancements in industrial electric process heating and steam generation technologies are also driving market expansion. Engineers are deploying high-capacity electric cracking furnaces and e-boilers that generate extreme temperatures for hydrocarbon processing without direct emissions. These developments are validating the feasibility of electrification for core refining units. According to BASF SE, April 2024, in the 'Start of operation for world’s first demonstration plant for large-scale electrically heated steam cracking furnaces' press release, the newly commissioned facility utilizes 6 megawatts of renewable energy to process hydrocarbons. Furthermore, broader capital reallocation supports these shifts. According to the International Energy Agency, in 2024, the oil and gas industry’s investment in clean energy technologies reached nearly USD 30 billion during the prior year, reflecting a pivot toward low-carbon infrastructure.

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Key Market Challenges

The critical constraint impeding the Global Refinery Electrification Market is the inadequacy of existing external electrical grid infrastructure combined with the logistical complexity of retrofitting legacy refining assets. Refineries operate as continuous-process facilities that demand an exceptionally high and stable baseload power supply; however, current utility grids in many industrial regions lack the transmission capacity and reliability to support the large-scale electrification of energy-intensive equipment such as process heaters and steam turbines. This infrastructure deficit creates significant operational risks, as even minor power fluctuations can trigger safety shutdowns and production losses, forcing operators to delay electrification initiatives in favor of established fossil-fuel systems.

This challenge is directly hampering market growth by creating a bottleneck where the external power supply cannot match the pace of industrial demand. According to the International Energy Agency, in 2024, grid infrastructure weaknesses resulted in a global backlog of over 3,000 gigawatts of renewable power projects waiting in connection queues, highlighting the severe lack of available capacity to support new industrial loads. Consequently, until the grid modernization gap is bridged, refinery operators face a formidable barrier to securing the consistent, high-volume electricity required to decarbonize their downstream operations.

Key Market Trends

On-site Integration of Green Hydrogen Electrolysis Systems is fundamentally reshaping refinery energy balances by replacing natural gas-fed steam reforming with electrolytic pathways. This trend is characterized by the direct coupling of large-scale electrolyzers with renewable power sources to decarbonize the hydroprocessing units central to fuel upgradation. Operators are increasingly securing dedicated renewable energy supplies to ensure the continuous, high-load operation required for these assets, effectively substituting fossil-fuel-based hydrogen feedstocks with electron-derived alternatives. According to Shell, November 2025, in the 'Shell secures power deals for renewable hydrogen electrolyser in Germany' announcement, the company signed long-term power purchase agreements to secure renewable electricity for its 100 megawatt REFHYNE 2 electrolyser, ensuring the facility contributes to significant Scope 1 emission reductions at the Rheinland park.

Electrification of Steam Methane Reforming (e-SMR) Processes is emerging as a critical technological avenue for refineries seeking to mitigate emissions from hydrogen production without abandoning existing methane feedstocks. Unlike traditional reforming which burns gas for heat, e-SMR utilizes electric resistance heating within the reactor catalyst beds, thereby eliminating combustion flue gases and concentrating the carbon dioxide stream for easier capture. This technology allows downstream facilities to leverage grid electricity for process heat while maintaining high throughputs in syngas generation. According to European Energy, October 2025, in the 'European Energy to introduce next generation of green methanol technology' press release, the company confirmed plans to deploy a commercial 10 megawatt electrified steam methane reforming unit, validating the scalability of this technology for industrial applications.

Segmental Insights

The Electric Motors segment is currently recognized as the fastest-growing category within the Global Refinery Electrification Market, driven by a widespread transition from steam-driven turbines to electrified mechanical drivers. This shift is primarily accelerated by the urgent industry requirement to lower Scope 1 and Scope 2 emissions in compliance with stringent environmental mandates. Refineries are increasingly adopting high-efficiency electric motors for critical applications such as pumps and compressors to minimize energy waste and reduce maintenance overhead. Consequently, these components are essential for operators seeking to modernize infrastructure and achieve the decarbonization targets outlined by global energy authorities.

Regional Insights

North America maintains a dominant position in the Global Refinery Electrification Market, primarily due to a rigorous regulatory landscape and widespread industrial decarbonization initiatives. The U.S. Environmental Protection Agency (EPA) enforces strict compliance standards regarding hazardous air pollutants, compelling refineries to transition from conventional combustion processes to cleaner electric-powered systems. Additionally, established oil and gas enterprises across the region are prioritizing the integration of renewable energy grids and electric process heaters to meet sustainability objectives. This cohesive approach to reducing carbon intensity ensures North America remains the central hub for market expansion and technological adoption.

Recent Developments

• In December 2024, BP reached a final investment decision to construct a large-scale industrial green hydrogen plant at its refinery in Lingen, Germany. The project involves the installation of a 100-megawatt electrolyzer capable of producing approximately 11,000 tons of renewable hydrogen per year. The facility will be powered by offshore wind energy, directly electrifying the hydrogen production process required for fuel refining. This development is expected to significantly lower the refinery's carbon footprint and marks a major step in the deployment of electrification technologies within the downstream oil and gas sector.
• In June 2024, TotalEnergies signed a 15-year agreement with Air Products to deliver green hydrogen to its refineries in Northern Europe. Under this collaboration, Air Products committed to providing 70,000 tons of green hydrogen annually starting in 2030, which will be used to decarbonize the desulfurization processes at TotalEnergies’ facilities. This initiative aligns with the strategy to electrify and decarbonize European refining assets by replacing grey hydrogen with hydrogen produced via electrolysis powered by renewable energy. The agreement followed a call for tenders launched to supply green hydrogen to the company's operations.
• In April 2024, BASF, SABIC, and Linde inaugurated the world's first demonstration plant for large-scale electrically heated steam cracking furnaces at the Verbund site in Ludwigshafen, Germany. The collaboration aimed to demonstrate that continuous olefin production is feasible using renewable electricity as a heat source, replacing conventional fossil fuels. The plant, integrated into existing cracking facilities, utilizes two distinct heating concepts to process hydrocarbon feedstock. This development represents a significant milestone in the electrification of energy-intensive processes, potentially reducing carbon emissions by at least 90% compared to standard technologies used in the sector.
• In January 2024, Coolbrook successfully demonstrated the electric steam cracking of naphtha at its large-scale pilot plant in the Netherlands. This breakthrough validated the potential of the company's proprietary RotoDynamic Reactor technology to replace traditional fossil fuel-based furnaces in the petrochemical and refining industries. The tests confirmed that the electric reactor could significantly increase process efficiency and eliminate carbon dioxide emissions from the cracking process. The company announced plans to deploy this technology at an industrial scale to enable the production of olefins with a zero-carbon footprint, marking a pivotal advancement in the Global Refinery Electrification Market.

Key Market Players

• ABB Limited
• Siemens AG
• Schneider Electric SE
• Rockwell Automation Inc.
• ExxonMobil Corporation
• Shell plc
• BP International Limited
• NextEra Energy, Inc.

By Technology	By Refinery Type	By Application	By Region
Renewable Energy Sources Energy Storage and Power Electronics	Crude oil Refineries Petrochemical Refineries and Biorefineries	Process Heating Electric Motors and Others	North America Europe Asia Pacific South America Middle East & Africa

Report Scope:

In this report, the Global Refinery Electrification Market has been segmented into the following categories, in addition to the industry trends which have also been detailed below:

• Refinery Electrification Market, By Technology:

• Renewable Energy Sources
• Energy Storage and Power Electronics

• Refinery Electrification Market, By Refinery Type:

• Crude oil Refineries
• Petrochemical Refineries and Biorefineries

• Refinery Electrification Market, By Application:

• Process Heating
• Electric Motors and Others

• Refinery Electrification Market, By Region:

• North America
• United States
• Canada
• Mexico
• Europe
• France
• United Kingdom
• Italy
• Germany
• Spain
• Asia Pacific
• China
• India
• Japan
• Australia
• South Korea
• South America
• Brazil
• Argentina
• Colombia
• Middle East & Africa
• South Africa
• Saudi Arabia
• UAE