Kyoto Group in June: Heating up the debate on thermal energy

Future-proofing industrial heat this June

This month, the race to secure zero-emission industrial heat takes center stage with the official announcement of Thermal Energy Day (TED) 2026 in Stockholm, alongside major shifts in the EU regulatory landscape. From the European Commission's newly opened 2026 Innovation Fund Heat Auction to the looming financial impact of ETS 2, heavy industry is facing strict timelines to phase out fossil gas.

In this issue, we also share key takeaways from the Future Cleantech Festival and take a deep dive into the thermal realities of the paper and pulp sector. Happy summer reading ☀️

IF26 Heat Auction: new rules, new opportunities

The European Commission has officially opened the public consultation for the upcoming Innovation Fund Heat Auction, scheduled for late 2026. For industrial businesses relying on medium-temperature heat, this auction represents a critical opportunity to secure substantial EU funding with a significant strategic advantage.

In the 2026 auction round, projects that integrate thermal energy storage will receive a 25% bonus.

Why partner with Kyoto Group?

• Proven success: We draw on insights and strategies from successful past rounds in energy-intensive sectors like food & beverage to help you structure a winning bid.
• End-to-end preparation: Our team collaborates with you early in the process to handle the preliminary design and technical documentation required for a bulletproof submission.
• Long-term competitiveness: Integrating Heatcube is the fastest way to hedge against volatile gas prices and stabilize your long-term operational costs.

The countdown to the late 2026 auction has begun. Let's collaborate to secure your funding and decarbonize your industrial heat.

Save the date: Thermal Energy Day 2026

We are thrilled to officially announce Thermal Energy Day (TED) 2026, co-hosted alongside the KTH Royal Institute of Technology. This year, our focus centers on a critical milestone for Net Zero: Industrial Heat Decarbonization: From Challenges to Deployment.

The event will bring together industry leaders, technology providers, investors, and policymakers to bridge the gap between theory and real-world execution. Together, we will explore commercially validated technologies, end-user operational realities, grid integration, and the financing structures needed to accelerate deployment today.

• When: October 15th-16th, 2026
• Where: KTH Main Campus, Stockholm, Sweden (Nymble - Student Union)

More details to come: The agenda and speaker lineup will be revealed in the coming weeks.

Be sure to block your calendar for October 15th-16th. Keep an eye on our upcoming newsletters and channels for registration links and further updates!

Mitigating EU ETS 2: Securing your industrial heat timeline

By 2027/2028, the EU's new ETS 2 (Emissions Trading System) takes full effect. For industries relying on fossil fuels for process heat, this regulatory shift means carbon costs will be passed directly onto energy bills, officially ending the era of unmitigated fossil gas.

Taking a 'wait-and-see' approach poses a significant operational risk. Because deploying large-scale thermal energy storage solutions requires planning ahead (our Heatcube has an average lead time of 18 months), project initiation must begin now to secure zero-emission, low-cost green steam before the new taxes impact your bottom line.

Do not wait for the regulatory shift to impact your margins.

Secure your deployment timeline today

Precision Future Cleantech Festival 2026 wrap-up

Kyoto Group recently joined industry leaders and policymakers in Germany for the Future Cleantech Festival 2026 to address the remaining innovation gaps in industrial decarbonization. Our Chief Commercial Officer, Tim de Haas, hosted an interactive session at the Solutions Hub focused on replacing natural gas with zero-emission alternatives.

We got to take part of and join some very insightful discussions. Here are our key takeaways from the event:

• Mitigating grid volatility: Relying directly on intermittent renewable energy grids introduces significant operational risks for 24/7 industrial processes.
• Policy and financing drivers: Panels heavily focused on how upcoming EU regulations and funding mechanisms will accelerate cross-sector adoption.
  
• Evolving capacity markets: The Dutch government is introducing a centralized capacity mechanism to safeguard electricity supply while avoiding fossil lock-in. Energy Storage NL is actively pushing for technology-neutral rules, realistic de-rating factors, and Belgium-style incentives to ensure long-duration and thermal storage can compete fairly with gas plants, establishing a clear path for solutions like Heatcube to secure long-term revenue as a recognized firm, low-carbon capacity provider.

Pressed for power: The thermal reality of paper and pulp

The pulp and paper industry faces a structural irony: its raw material comes from renewable, carbon-syncing forests, yet turning that wood into paper requires an incredibly heavy industrial furnace. While consumers see eco-friendly recyclable cardboard packaging, the factory floor tells a more carbon-intensive story.

According to data from the International Energy Agency (IEA), the scale of this energy footprint is massive:

• The sector sits as the world's fourth-largest industrial energy consumer, drawing roughly 6% of global industrial energy.
• The drying section alone burns through over 60% of a mill's total energy just to evaporate the final trace amounts of water from the paper pulp.

Unlocking the electric mill

To drop fossil fuels, pioneering mills are electrifying. Industrial heat pumps can recycle waste heat to cut thermal energy needs by up to 92%, but they can't generate the non-stop, high-temperature steam a full-speed papermaking line demands.

Thermal energy storage solves this drying bottleneck. Acting as a high-temperature thermal battery, it charges on green electricity to supply the steady wave of steam needed to dry paper at lightning speeds, keeping production flying 24/7.

Take a deeper look into the paper & pulp sector's energy problem

Next month: Boiling down the carbon footprint of the brewing industry

Can a sector responsible for intensive manufacturing and global supply chains remain a critical blind spot in corporate climate strategies? We look past the final commercial products to confront the heavy fossil fuel dependency of traditional industrial brewing, a sector where thermal energy for boiling, pasteurization, and sanitation accounts for roughly 75% of a facility's energy footprint.

Next month, we explore how forward-thinking producers are rewriting the rules. From deploying commercial concentrated solar thermal loops to retrofitting facilities with industrial high-temperature heat pumps, discover how leading beverage manufacturers are securing stable, zero-carbon steam at the scale global markets demand without boiling the planet.

Stay tuned!