Industry in Yemen is of small scale; most of industrial plants rely on themselves to meet their power needs, with apparently very low fuel efficiency. Combined heat and power generation, which is the simultaneous generation of heat and power using a single fuel such as natural gas, with overall fuel efficiencies of more than 80%, is still not introduced and not known. This paper aims at highlighting the possible technical, economical and environmental advantages of introducing combined heat and power units, and discusses barriers to their introduction. Finally, a practical approach to gradual combined heat and power introduction is proposed.