Industrial electrification is becoming a matter of economic security as well as decarbonisation, according to new Oxford analysis. Continued reliance on fossil fuels leaves 75% of global industry exposed to recurring price shocks, while electrification offers a pathway to stable and resilient energy costs.
The latest disruption linked to tensions around the Strait of Hormuz is only the most recent example of a broader pattern. The 2022 Russian gas crisis forced widespread factory closures and production shifts across Europe and beyond, with many energy-intensive industries yet to fully recover. The authors argue that such shocks are not isolated events, but symptoms of a structural vulnerability tied to fossil fuel dependence.
The impact has been global and persistent. In Asia, the 2022 LNG price spike forced factory shutdowns in Pakistan and Bangladesh and drove up costs for manufacturers in Japan and South Korea. Now, tensions around the Strait of Hormuz are once again feeding through into higher energy prices, renewing pressure on industrial producers across the region. The message is clear: fossil fuel shocks are not one-off events, but a repeated risk.
"Industry has now lived through two major fossil fuel shocks in three years. First the 2022 gas crisis and now Hormuz," says Jan Rosenow, Professor of Energy and Climate Policy at the University of Oxford. "At some point you have to ask: how many times does the alarm have to go off before we change the system?"
Industry runs almost entirely on fossil fuels and is therefore uniquely exposed to these risks, the authors say. Yet, despite the exposure, it has been among the slowest sectors to transition.
The analysis highlights that the technologies needed to electrify industry are already becoming available at scale. Recent developments include the delivery a 95-tonne, 16-metre evaporator for one of the world's most powerful industrial heat pumps at BASF's Ludwigshafen chemical site, and the commissioning of Southeast Asia's first industrial heat battery at a cement plant in Saraburi, Thailand built entirely with local supply chains in just eight months. These projects demonstrate that industrial electrification is moving beyond pilot stages and beginning a global industrial shift.
"The technology to electrify industry exists today," says Professor Rosenow. "What's missing is the political will to fix the price signals and build the grids that would make it happen at scale."
The new Oxford report, High Voltage, provides the evidence base behind that shift. Drawing on more than 1,600 global climate scenarios alongside a systematic engineering review, the report finds that up to 90% of industrial energy demand could be electrified with existing and emerging technologies.
"What surprised us most in this research is how strong the convergence is across two completely independent lines of evidence," says Cassandra Etter-Wenzel, Researcher at the Environmental Change Institute, University of Oxford. "Detailed engineering studies and 1,600 global climate scenarios both point to the same conclusion: up to 90% of industrial energy demand could ultimately be electrified. The potential is not the constraint. The question is whether policy moves fast enough to realise it."
The authors emphasise that key electrification technologies like, heat pumps, electric boilers, heat batteries, and resistance heating, are already proven and commercially available. But deployment is being held back by policy and market failures.
Electricity prices remain artificially expensive relative to gas in many regions due to legacy tax and levy structures that disproportionately burden electricity. Reforming these price signals through electricity pricing reform, carbon pricing, and targeted support for electrified industrial heat will be crucial.
Grid access is another major constraint. Even where the technology exists and the economics work, long connection timelines stall industrial projects . Governments need to streamline permitting, enable anticipatory grid investment, and prioritise industrial connections to unlock progress.
Finally, first-of-kind industrial electrification projects face technology and integration risks that private capital won't bear alone. Instruments like Carbon Contracts for Difference - as used to support the BASF heat pump - grants, and concessional finance are essential to de-risk early deployment and drive down costs for what follows.
The authors stress that reducing fossil fuel dependence is not only about emissions, but also about resilience. Each unit of fossil fuel replaced with domestic clean energy reduces exposure to geopolitical disruption and price volatility.
"The industries that electrify fastest will stop being victims of the next crisis," says Professor Rosenow. "Every unit of fossil fuel eliminated from an industrial process is a unit that can no longer be held hostage by a pipeline shutdown, a Strait closure, or a price spike."
