Air Separation Unit Market Size, Share & Trends Analysis Report By Process (Cryogenic Distillation, Non-cryogenic Distillation), By Gas (Nitrogen, Oxygen, Argon, Other Gases), By End-User (Chemical Industry, Oil and Gas Industry, Iron and Steel Industry, Other end-users) and By Region(North America, Europe, APAC, Middle East and Africa, LATAM) Forecasts, 2024-2032

Air Separation Unit Market Size

The global air separation unit market size was valued at USD 4,293.6 million in 2023 and is estimated to reach from USD 4,435.1 million in 2024 to USD 6,143.2 million by 2032, growing at a CAGR of 4.21% during the forecast period (2024–2032).

An air separation unit (ASU) is a critical technology that splits atmospheric air into its primary components—typically nitrogen and oxygen—along with other gases such as argon and rare inert gases. The most commonly used method for air separation is fractional distillation, particularly in cryogenic ASUs that are designed to produce high-purity nitrogen, oxygen, and often argon. Moreover, alternative techniques like pressure swing adsorption (PSA), membrane separation, and vacuum pressure swing adsorption (VPSA) are employed to separate individual components from the air for various commercial applications.

The global market is experiencing substantial growth, driven by increasing demand from key industries such as iron and steel, petrochemicals, chemicals, and healthcare. In addition, the rising global energy production and consumption, particularly in the oil sector, is further propelling market expansion. As the need for efficient and cost-effective air separation technologies intensifies across these industries, the market is expected to continue its upward trajectory, supported by ongoing innovation and demand for high-purity gases.

The below table shows global nitrogen production (mt)from the 2019-2023 period

Source: Straits Research 

Market Trends

Growing demand in the medical sector

The healthcare industry remains a significant driver of air separation unit adoption, particularly for the production of medical-grade oxygen. This trend has grown in response to the increased emphasis on improving public health infrastructure and ensuring the reliable supply of oxygen for hospitals and emergency care, especially during pandemics or public health crises. ASUs have become indispensable in maintaining uninterrupted oxygen production, particularly in regions with limited infrastructure.

Therefore, developing countries, in particular, are investing in oxygen generation systems supported by ASUs to meet the rising demand for medical oxygen.

• For instance, the Global Alliance for Oxygen estimates that by 2030, a US$4 billion investment will be required to boost oxygen access by 25% in low- and middle-income countries, potentially saving up to 860,000 lives—highlighting the growing need for ASUs in the healthcare sector.

Air Separation Unit Market Growth Factors

Growth in the steel manufacturing sector

The steel industry plays a pivotal role in driving the demand for air separation units (ASUs), primarily due to the essential need for oxygen in blast furnaces and basic oxygen steelmaking processes. Oxygen is crucial in steel production for combustion, decarburization, and other metallurgical operations, positioning ASUs as vital components in steel mills worldwide.

• For example, global steel production reached 145.5 million tons in November, marking a 3.3% increase over the same month in 2022. Overall, world steel output grew by 0.5% to 1,715.1 million tons in January-November 2023, as per the World Steel Association, underscoring the continued growth and demand for air separation technology.

As steelmakers increasingly shift towards sustainable practices, there is a growing investment in advanced ASU technologies designed to improve productivity and reduce energy consumption. This trend is reflective of the broader industry’s focus on reducing its environmental footprint while optimizing production processes.

Restraining Factors

High Initial Investment and Operational Costs

The high initial investment and operational costs associated with air separation units present a significant barrier to adoption, particularly for smaller industries or companies with limited budgets. The capital-intensive nature of ASUs is driven by the advanced technology and large-scale equipment necessary for efficient gas separation processes. Beyond the upfront costs, operational expenses are heavily influenced by energy consumption, which is a key component of the overall cost structure.

Energy-intensive industries, in particular, may face challenges with high electricity bills and ongoing maintenance costs tied to ASU operations. This is especially true in regions where energy prices are volatile, adding uncertainty to long-term operational costs. As a result, many companies may hesitate to invest in ASUs or may explore alternative solutions, hindering broader market growth and the adoption of air separation technologies.

Market Opportunity

Rising integration of ASUs with renewable energy systems

The global shift toward cleaner and more sustainable energy sources presents a significant opportunity for the air separation unit (ASU) market. ASUs are playing an increasingly vital role in the green energy transition, particularly in hydrogen production. These units are essential in water electrolysis, where they help separate pure hydrogen and oxygen for use in fuel cells and energy storage applications.

Furthermore, ASUs are being incorporated into renewable energy projects such as wind and solar farms, enabling onsite gas production that improves overall project efficiency. This integration not only supports the growing demand for clean energy but also aligns with sustainability goals.

• For example, in 2023, ASU global operation centers successfully reduced 25% of their carbon emissions by replacing high-energy-consuming equipment and achieving 30% renewable energy adoption, showcasing the potential for ASUs to contribute to both energy efficiency and environmental impact reduction.

Regional Insights

Asia Pacific: Dominant region with a market share of 42.69%

Asia-Pacific is the fastest-growing global air separation unit market, driven by rapid industrialization, urbanization, and high demand across sectors such as electronics, automotive, chemicals, healthcare, and steel production. China, India, Japan, and South Korea are key players, with China leading the market due to its vast industrial base and focus on large-scale infrastructure development. Japan and South Korea are also leveraging ASU technologies to support hydrogen energy initiatives, aligning with their carbon neutrality commitments. Government initiatives, such as China's "Made in China 2025" strategy, are crucial in shaping the ASU market by promoting advanced manufacturing and cutting-edge technologies to enhance industrial efficiency and sustainability across the region.

North America: Rapid expansion fueled by emerging markets

North America’s air separation unit (ASU) market benefits from strong government support aimed at advancing clean energy and industrial decarbonization. Notably, the U.S. Department of Energy (DOE) has committed significant resources, including an investment of USD 8 billion in 2022, to establish regional clean hydrogen hubs (H2hubs). These hubs facilitate collaboration between ASU manufacturers, energy producers, and industries, promoting the development of clean hydrogen technologies and supporting decarbonization efforts. This initiative not only strengthens the ASU market but also accelerates the transition to more sustainable energy solutions in the region.

Countries Insights

• UK –The UK has committed substantial funding to industrial decarbonization, creating significant opportunities for ASU manufacturers specializing in carbon capture and hydrogen production technologies. Policies such as these highlight the pivotal role of ASUs in helping the UK meet its ambitious sustainability goals. As the country accelerates efforts to reduce carbon emissions, ASU technologies will be crucial for achieving its climate targets and supporting the green transition across key industries.
• China -In 2023, China launched one of the world’s largest ASU facilities, operated by Air Products, to provide oxygen and nitrogen for its steel and chemical industries. The country is also increasingly integrating ASUs into green hydrogen projects, underscoring the growing importance of these units in supporting China’s industrial decarbonization efforts. ASUs will continue to play a key role in China’s sustainability initiatives, especially in the clean energy and manufacturing sectors.
• UAE- In 2022, the UAE commissioned its first hydrogen production project, powered by an advanced ASU designed to produce high-purity hydrogen for industrial and transport applications. This initiative aligns with the UAE’s broader strategy to diversify its energy mix and reduce carbon emissions. The ASU plays a crucial role in enabling clean hydrogen production, supporting the country’s efforts to become a global leader in sustainable energy and hydrogen technologies.
• U.S.- In 2022, the U.S. Department of Energy allocated USD 8 billion for regional clean hydrogen hubs (H2hubs), fostering collaboration between ASU manufacturers, energy producers, and industries. These initiatives focus on decarbonization and the development of clean hydrogen technologies, with ASUs playing a central role in ensuring the success of these projects. The DOE’s investment accelerates the transition to sustainable energy and enhances ASU market growth across the country.
• South Korea- South Korea’s 2022 hydrogen economy roadmap emphasizes the crucial role of ASUs in producing high-purity hydrogen, essential for fuel cell vehicles and energy storage systems. The government’s focus on hydrogen as a key component of its clean energy strategy positions ASUs as a critical technology for achieving carbon neutrality. As the country advances its hydrogen infrastructure, ASUs will be at the heart of efforts to decarbonize the transportation and energy sectors.
• Canada -Canada's Net-Zero Accelerator Fund is driving innovation in carbon capture and storage (CCS) projects, many of which depend on ASUs for gas separation processes. By investing in CCS technologies, Canada is bolstering its efforts to meet its net-zero emissions targets. ASUs are integral to this process, enabling the efficient separation of gases for both carbon capture and clean hydrogen production, reinforcing Canada’s commitment to a sustainable and low-carbon future.

Air Separation Unit Market Segmentation Analysis

By Process

Cryogenic distillation is a highly efficient process involving multiple high-pressure and low-pressure distillation columns to separate air into its main components. In this process, the high-pressure column, operated at 6-8 bars, separates air into nitrogen-rich vapor and oxygen-rich liquid. The nitrogen-rich vapor is collected at the top of the column and transferred to a low-pressure column, operating at around 1-1.5 bars, where it undergoes further purification. This method ensures highly purified nitrogen while impurities are removed from the bottom of the high-pressure column, where pure argon is collected, making it the dominant process.

By Gas

Nitrogen holds the largest market share due to its non-reactive nature and excellent blanketing properties, making it ideal for various industrial applications. It is widely used as a purging gas in industries like petrochemicals and pharmaceuticals, where nitrogen is injected into storage tanks to create a low-pressure "blanket" of inert gas. This process helps prevent toxic fume emissions and reduces the risk of fire or explosion. Moreover, nitrogen’s role in maintaining safe environments and its versatility in different manufacturing sectors further contribute to its dominance in the market.

By End-User

The iron and steel industry is the largest end-user of air separation units, utilizing gases like hydrogen, nitrogen, oxygen, and argon in various processes. Nitrogen is used to enhance the mechanical properties of steel, such as improving fatigue life, strength, and corrosion resistance. Oxygen is critical for refining molten iron, reducing its carbon content from 4% to below 0.5%, thus making it more versatile and easier to fabricate. These gases are essential for processing, refining, and purifying steel, and the industry's continued growth ensures its dominance in the global air separation unit market.

Company Market Share

The global air separation unit market is moderately fragmented, with key players actively expanding their presence across diverse industries such as steel, healthcare, energy, and food processing to meet the increasing demand. Major companies are investing in technological innovations and strategic partnerships to enhance their competitive edge and address the evolving needs of various sectors.

Universal Boschi: An Emerging Player

Universal Boschi specializes in manufacturing premium-quality low-pressure air separation plants and cryogenic air separation units, with capacities ranging from 50 m³/hour to 10,000 m³/hour. The company produces cryogenic tonnage oxygen and nitrogen plants for both industrial and medical gas generation. With over 500 air separation plants supplied globally, ranging from 1 TPD to 100 TPD (or 20 to 1500 cubic meters per hour), Universal Boschi has established a strong presence in both domestic and international markets.

Recent Developments

• September 2024 - Linde entered into an agreement with Tata Steel to acquire two 1,800-per-day (TPD) Air Separation Units (ASUs) from the Kalinganagar Phase 2 expansion project in India. This acquisition will significantly increase Linde’s production capacity in India, adding 3,600 TPD to the company’s existing 9,730 TPD capacity, marking a 37% increase in its total capacity.
• April 2024 - Linde reached an agreement for the de-captivation of an air separation unit (ASU) at Guangdong Zhongnan Iron & Steel’s plant in Shaoguan, Guangdong Province, China. Linde, which already operates five on-site ASUs supplying industrial gases to Guangdong Zhongnan Iron & Steel, will now de-captivate and upgrade a sixth unit. This expansion will raise Linde's total on-site production capacity in Shaoguan to approximately 130,000 cubic meters per hour.

Analyst Opinion

As per our analyst, the global air separation unit market is experiencing steady growth, fueled by its wide-ranging applications across industries such as steel, healthcare, energy, and food processing. The increasing demand for industrial gases, particularly oxygen, nitrogen, and argon, is driving market expansion.

In the steel sector, ASUs are vital for oxygen supply in blast furnaces, while in healthcare, they ensure a steady flow of medical-grade oxygen, especially in light of recent global health crises. The energy industry is also tapping into ASU technology for hydrogen production and gasification in clean energy projects.

However, despite this positive trajectory, the market faces challenges, including the high initial investment costs and energy-intensive nature of ASUs, which can limit adoption, particularly in emerging markets. To counter these challenges, ongoing advancements in ASU technology are focusing on improving energy efficiency, reducing operational costs, and enhancing scalability.