Chlorofluorocarbon Market

Market Overview

According to the Straits Research, Electric Power Transmission and Distribution Equipment Market size is growing at a higher CAGR 5.5% during the forecast period.

Chlorofluorocarbons (CFCs) are hydrocarbons that contain elements such as carbon, chlorine, and fluorine. These hydrocarbons are tasteless, odorless, and colorless gases or liquids that evaporate easily at room temperature. CFCs are non-reactive, stable, non-toxic, non-flammable, and have boiling points around zero degrees centigrade.

CFCs — due to their desirable physical properties — are the preferred choice for refrigerant gases in refrigerators, air conditioners, and freezers. Moreover, properties such as low boiling points drive their use in blowing agents for foam plastics and packaging materials. However, CFCs have high global warming potential (GWP) and are potent greenhouse gases, which has led to a ban on their usage and their gradual phase-out from Europe and the U.S.

The legislation controlling releases of CFCs — the Montreal Protocol — had compelled the complete phase-out of CFCs by 1996. Only developing countries were allowed to exceed this at a level of up to 15% of their products before the signing of the Protocol. In recent years, HFCs have gained application as substitutes for CFCs.

Market Dynamics

Product Life Cycle

Although the overall production and emissions of CFCs significantly dropped with their phasing out by the Montreal Protocol, CFC-11 continues to witness an upward trend, which is driven its use as a foaming agent for building insulation. Asia-Pacific drives the global chlorofluorocarbon market, against a backdrop of rapid industrialization and a strong automotive industry. CFCs are used as coolants in automobiles, which drives the chlorofluorocarbon market in Asia-Pacific’s automotive industry.

Relaxed regulations pertaining to CFCs have enabled Asia-Pacific to emerge as a prominent exporter of CFCs. Although this facilitates the availability of the product at a lower price, it also adversely affects its financial viability for manufacturers or producers in the regional market.

Rapid Industrialization & an Expanding Automotive Industry are Expected to Drive the Chlorofluorocarbon Market

CFCs register strong demand as blowing agents in foam insulation and building envelopes to increase thermal resistivity and maintain the temperature inside the space. For example, spray polyurethane foam (SPF) manufactured from trichlorofluoromethane (CFC-11) has a better thermal resistivity than HCFC-141b. Rapid industrialization around the globe, especially in Asia-pacific, is significantly influencing the rising demand for CFCs.

CFCs also find use as working fluids in cooling and refrigerating equipment, which drives their applications in various end-use industries such as automotive, consumer goods, aerospace, and defense. The expanding automotive industry is augmenting the growth of the chlorofluorocarbon market, as CFCs are used as coolants in car engines. This driver is particularly prominent in emerging economies, led by countries such as India, Indonesia, Argentina, and Brazil.

As per the OICA, the production of motor vehicles in Brazil rose by 5.2%. As per the India Brand Equity Foundation (IBEF), Haier, a key manufacturer of refrigeration systems, ACs, and televisions, has announced a USD 415.80-million investment by 2020 with an aim to increase its revenue. CFCs also garner significant attention in general and precision cleaning applications, which further propels the market growth.

Stringent Regulations Driving the Phase-Out of CFCs Hamper Market Growth, Partciluarly in Developed Economies

Stringent norms regulate the use of CFCs in light of their harmful effects on the environment, which has led to their phase-out in the Americas and Europe. Some of the international environmental agreements directing the phase-out these hydrocarbons are:

• Vienna Convention for the Protection of the Ozone Layer (1985)
• Montreal Protocol on Substances that Deplete the Ozone Layer (1987)
• The London Amendment (1990)
• The Copenhagen Amendment (1992)
• The Montreal Amendment (1997)
• The Beijing Amendment (1999)
• The Montreal Adjustment (2007)

The Montreal Protocol has significantly decreased the consumption of CFCs and led to the production of alternatives with a lower environmental impact. Some of the alternatives being used in place of CFCs in the decreasing order of their global warming potential are Hydrochlorofluorocarbons (HCFCs), Hydrofluoroolefins (HFOs), and lower GWP refrigerant.

Segmental Analysis

Foam Industry – The Secret Behind Chlorofluorocarbon’s Profitability?

CFC-11 registers high consumption in the production of polyurethane foam (PU foam) in the foam industry since the hydrocarbon is inexpensive compared to its alternatives. PU foams are widely used as insulation material in various end-use industries, such as building and construction.

China is the world's largest consumer of Ozone-Depleting Substances (ODSs), followed by South Korea. The use of freon — the most widely used coolant in large air-conditioning systems — significantly contributes to CFC consumption in the region. Air conditioning systems are used in consumer durables such as refrigerators, air conditioners, and coolers. Being non-toxic, odorless, and colorless, CFCs are also consumed in the air conditioning systems of automobiles, making the automotive industry the second-largest consumer of CFCs.

Regional Analysis

Asia-Pacific Market Overview

After the phase-out of CFCs in refrigerants, coolants, and air conditioning from developed countries in 1995, 98% of the CFCs produced were used in the manufacturing of metered-dose inhalers (MDIs), which were phased out later in 2016. With firm regulations curbing the use of CFCs in developed countries, the CFCs produced are exported to Asia-Pacific, the Middle East, and Africa, where the regulations on the production and consumption of CFCs are lenient. This leniency in the laws has made Asia-Pacific the largest consumer of CFCs in the world, led by China, South Korea, and India.

Asia-Pacific is expected to record slow growth in the CFCs market during the forecast period, with impetus from rapid industrialization and urbanization as CFCs are used in the insulation of building envelops due to their low cost.

The consumer durables sector holds a substantial share of Asia-Pacific’s chlorofluorocarbon market due to the use of CFCs in refrigeration and air conditioning applications. These electronic devices consume CFCs at a significant rate, which is leading to high demand in the sector. As per the India Brand Equity Foundation (IBEF), growing population composition and increasing disposable income fueled the consumer durable market in Asia-Pacific in 2018. India’s washing machine, refrigerator, and air conditioner markets were valued at around USD 1.09 billion, USD 3.03 billion, and USD 3.1 billion, respectively, in the following year.

The inclination toward low-cost products and lack of awareness regarding global warming in some of the areas of the region will favor market growth. The rise in the emission of China is a major example, several Chinese companies have found to release CFC-11, an ozone-depleting substance, that the country agreed to phase-out under the Montreal Protocol by 2010. Furthermore, the continuously rising population keeps the product demand high in the region.

Figure 1: Consumption of Ozone-Depleting Substances (1986=100)

Global consumption of ozone-depleting substances (ODS), measured relative to the year 1986 (where consumption in 1986 is equal to 100).

Chlorofluorocarbon Market Segmentation

By Type

• CFC-11
• CFC-12
• Others

By Application

• Aerosols
• Refrigeration
• Foams
• Metered-dose Inhalers
• Others

By End-Use Industry

• Pharmaceutical Sector
• Packaging Industry
• Solar Energy Sector
• HVAC-R Industry
• Others

By Region

North America

• The U.S.
• Canada
• Mexico

Europe

• Germany
• The U.K.
• Italy
• France
• Rest of Europe

Asia-Pacific

• China
• South Korea
• Taiwan
• India
• Singapore
• Japan
• Malaysia
• Indonesia
• The Rest of Asia-Pacific

Latin America

• Brazil
• Argentina
• The Rest of Latin America

The Middle East

• Saudi Arabia
• Oman
• Qatar
• Bahrain
• The UAE
• Turkey
• The Rest of ME

Africa

• Nigeria
• Tanzania
• South Africa
• Ghana
• The Rest of Africa