The Future of Fashion Runs on Electricity
We Mean Business Coalition
How H&M Group is working to electrify textile factories in China and Vietnam to decarbonize production, improve energy efficiency and futureproof supply chains.
As 99% of H&M Group’s greenhouse gas emissions come from its supply chain — mainly from the factories that dye and finish textiles — the fashion company is working with its fabric suppliers to shift industrial heat processes towards electrified technologies powered by renewable electricity.
Part of a wider plan to cut emissions across the company’s value chain, the Swedish fashion giant is helping three fabric suppliers, two in China and one in Vietnam, to electrify through the installation of steam heat pumps and heat storage systems.
These new electrified systems will make use of waste heat, rather than letting it escape into the factory and contribute to a hotter indoor temperature for workers. They also have the potential to improve local air quality and operational energy efficiency with one of the installed pilots in China cutting energy use by 45 percent at the facility level.
Textile manufacturing relies on energy-intensive industrial heat processes
Fabric production heavily relies on industrial heat processes — for washing fabrics in extra hot water to remove impurities, submerging them in high-temperature dye baths and transferring printed graphics onto synthetic fibers.
Traditionally, the high temperatures required are generated on-site by burning fossil fuels in large steam boilers. This helps explain why fabric production accounts for over half of the fashion sector’s emissions. As a result, electrifying this process with technologies powered by renewable electricity is critical to reducing greenhouse gas emissions across the sector. Plus, an overreliance on fossil fuels exposes the industry to price volatility, geopolitical risk and structural fragility over the long-term.
Furthermore, standard industrial heat production is highly inefficient, losing up to 35 percent of the valuable heat during its distribution and creating unbearably hot conditions for textile workers — a situation that will only get worse as average global temperatures rise.
How to electrify the textile sector
To decarbonize its most energy-intensive manufacturing processes, H&M Group must help its large number of textile suppliers, mainly located in Asia, to electrify their heating processes.
In practice, this means introducing two technologies: heat pumps and heat storage. Unlike conventional fossil fuel-fired boilers, these technologies use electricity to transfer heat, rather than generating it through combustion, making their use one of the most energy-efficient approaches to textile manufacturing.
Three of H&M Group’s suppliers in Vietnam and China offer useful examples of what this transformation can look like on the ground.
Replacing on-site boilers with Vietnam’s first heat pump for textiles
In northern Vietnam’s Hung Yen Province, Bangjie is a textile manufacturer that makes seamless sportswear and underwear. Originally, its on-site boilers were coal fired, but they were later converted to burn biomass, including agricultural byproducts like wood waste, rice husks and straw. While this reduced the factory’s carbon footprint, biomass is largely considered a transitional solution for the sector, as it can still be linked to environmental impacts such as air pollution and biogenic emissions.
Through collaboration and facilitation, H&M Group’s team of energy experts is now helping Bangjie to replace its biomass boiler with a heat pump that is powered by harnessing waste heat from existing operations and integrating onsite rooftop solar for energy generation. The heat pump will be capable of generating steam up to the extremely hot 150 degrees Celsius that the manufacturing process demands.
Currently under construction and due for completion later in 2026, this pilot project marks the first time a steam heat pump will be used in Vietnam’s textile sector and provides a model for scaling electrification across the entire industry. While heat pumps are highly established in other sectors, they are new to fashion production but offer huge potential, as Kim Hellström, H&M Groups’s senior sustainability climate manager, explained: “The reason why we focus specifically on heat pumps is that they have the highest efficiency, creating more energy than they use.”
A collaboration between nonprofit Apparel Impact Institute, independent global conservation organization WWF and H&M Group, the project will make Bangjie one of the fashion company’s first fully electrified fabric suppliers. Moreover, residual cool air produced by the heatpump can be used for cooling down the workshop temperature, offering potential to also improve working conditions for the factory workers.
Recycling heat from dyeing
In China’s eastern Jiangsu Province, the Lugang factory produces jersey fabrics for H&M Group. To date, it has powered its industrial heat through a system known as purchased steam.
“Purchased steam means you have an industry park with maybe five to 10 factories. Then you have a centralized steam-generating factory in the middle,” said Hellström. “It’s super-efficient and the emissions are much lower than if each factory had its own generation. The downside is that you’re very locked into that solution. You can’t do much by yourself, which is quite a challenge. Plus, they often run on coal, which is the dirtiest energy.”
For the first time in textile dyeing, H&M Group is working with the factory by offering expertise and practical support to install a steam heat pump without a compressor, which is usually added to raise waste heat to the high temperatures industry requires. Still under construction, the project aims to demonstrate how a heat pump can produce temperatures of up to 143 degrees Celsius just by recycling the extra heat from the dyeing process.
Using storage to lower energy costs
Lastly, H&M Group worked with Shanghai-based JQR, a knitwear supplier that previously produced its industrial heat with a boiler run on natural gas. In an upgrade completed in May 2025, JQR partially replaced this boiler with a heat pump — coupled with a heat storage system that extracts electricity from the local energy grid at the cheapest time of day and stores it in molten salt, discharging it in the form of steam when necessary.
The project has reduced the factory’s use of gas by 75 percent and its energy costs by 45 percent, due to both high fossil gas prices and the system’s ability to use stored energy when the electricity price is high.
How governments can accelerate fashion industry electrification
Electrification is the fastest and most viable way of switching energy-intensive textile factories to low carbon energy. In addition, it has the potential to improve operational energy efficiency, supply chain resilience, worker conditions and local air quality.
On top of the immediate impacts, electrification can also help avoid carbon lock-ins — the continued investments in outdated fossil fuel infrastructure, swayed by the vast sums already spent on it, and delay the energy transition.
Recent sharp increases in fossil fuel prices may have strengthened the business case for electrification, but a more conducive policy context would speed up the transition even more.
That’s why H&M Group wants governments to make electrification a key lever for industrial decarbonization and broader energy security through supportive policies, like those outlined in We Mean Business Coalition’s policy principles designed to unlock business action and investment. For example, realigning financial incentives and taxation to support electrification can help scale pilots such as these.
As Hellström said: “The energy transition must be as cheap as possible to be as efficient and quick possible, so we need to use the most cost-effective solutions.”