Cryogenic Equipment Market

Market Overview

The global cryogenic equipment market size was valued at USD 21.1 billion in 2022 and is projected to reach USD 42.5 billion by 2031, registering a CAGR of 8.1% during the forecast period (2023-2031). The growing use of liquefied natural gas (LNG) as a clean and efficient energy source and the increased use of industrial gases in the metallurgy, oil and gas, and energy and power sectors drive the cryogenic equipment market growth.

Cryogenic equipment is a term that refers to specialized devices and systems that are used to handle, store, transport, and manipulate materials at extremely low temperatures. Low temperatures are commonly characterized as temperatures less than -150°C (-238°F) and are connected with the liquefaction of gases such as nitrogen, oxygen, argon, etc. Healthcare, aircraft, energy, industry, and scientific research rely on cryogenic equipment.

During the projected period, the global industry will be driven by the demand for technical gases in various sectors to achieve a specific temperature level. After the global economy recovers, the market will likely rebound towards the projection period's end. Increased use of natural gas and LNG by countries seeking to phase out or transition from coal-based to green energy is expected to drive cryogenic equipment market share. On the other hand, the costly liquefaction process for cryogenic gases is projected to hinder the cryogenic equipment market.

Market Dynamics

Global Market Drivers

Growing Demand in the Healthcare and Life Science Sector

The growing demand for cryogenic equipment in the healthcare and life sciences sectors is driven by various applications that need the preservation of biological samples, tissues, vaccines, and stem cells at ultra-low temperatures. Biobanks and research institutions keep biological samples and tissues for future medical treatments, clinical trials, and research. Biobanks, such as the UK Biobank and the American Type Culture Collection (ATCC), contain millions of biological samples for diverse research purposes, including DNA, cells, and tissues. These repositories use cryogenic equipment to ensure the long-term sustainability of their collections.

Vaccines, including those for COVID-19, must also be stored and carried at controlled low temperatures to remain effective. Cryogenic equipment, such as specialized freezers, is critical in vaccine storage and delivery, ensuring vaccine potency until administration. For example, the Pfizer-BioNTech COVID-19 vaccine must be maintained at ultra-low temperatures of roughly -70°C (-94°F) to retain its efficacy. To keep and disseminate this vaccination, ultra-low temperature freezers have been deployed internationally. The ongoing expansion of this industry demonstrates the importance of cryogenic equipment in the healthcare and life sciences fields. As a result, the cryogenic equipment market trend will exhibit consistent growth during the forecast period.

Global Market Restraints

High Initial Cost

Cryogenic equipment requires complicated engineering and specialized materials to perform at ultra-low temperatures. This intricacy raises the expenses of manufacturing, customization, and maintenance. The capital investment necessary to acquire and install cryogenic equipment can be significant, creating a difficult barrier for particular sectors and businesses. In the LNG business, the high expense of cryogenic equipment is especially noticeable. Depending on capacity and location, the capital cost of an LNG storage and regasification complex can range from USD 300 million to billions of dollars.

The healthcare and biopharmaceutical sectors have also boosted investment in ultra-low temperature storage systems because of the COVID-19 vaccine distribution, such as ultra-low temperature freezers. The initial investment in obtaining and installing these freezers increased vaccine distribution and storage costs. While high starting prices remain a key constraint, industry-specific needs, and technical breakthroughs constantly alter the cryogenic equipment market environment.

Global Market Opportunities

Expanding Use of Liquid Natural Gas (LNG)

LNG (Liquefied Natural Gas) is becoming increasingly popular, creating a substantial opportunity for the global cryogenic equipment industry. LNG consumption has continuously increased because it is a cleaner and more efficient energy source. Cryogenic equipment is essential in the LNG business, making it a viable growth opportunity. According to the International Gas Union (IGU), LNG's worldwide natural gas trade proportion has gradually increased. From 2020 to 2021, global LNG commerce increased by 4.5%, hitting an all-time high of 372.3 MT. 

Major energy corporations and governments are investing in LNG infrastructure and production facilities to fulfill rising demand. The United States, for example, has become a large LNG exporter, while Asian countries, particularly China and India, are increasing their LNG import capacities. Furthermore, environmental rules and the determination to reduce greenhouse gas emissions drive the adoption of LNG as a cleaner fuel. The usage of LNG as an energy source is likely to expand as more countries and industries establish ambitious carbon reduction targets.

Regional Analysis

The global cryogenic equipment market analysis is conducted in North America, Europe, Asia-Pacific, the Middle East and Africa, and Latin America.

Asia-Pacific Dominates the Global Market

Asia-Pacific is the most significant global Cryogenic Equipment market shareholder and is estimated to grow at a CAGR of 7.9% over the forecast period. The metallurgy industry's considerable use of argon, oxygen, and nitrogen gases will likely fuel the segment's expansion. Nitrogen is commonly utilized in metallurgy for various applications, including annealing, neutral hardening, sintering, cyanidation, and blast furnaces. Rising metallurgy and increased demand for technical gases promote segment expansion. The food and beverage segment is expected to increase during the projection period rapidly. The popularity and demand for frozen foods have increased significantly in the food and beverage industry. Furthermore, encouraging environmentally friendly products to reduce carbon footprints influenced the choice of freezing technology and food and beverage legislation.

Moreover, Japan is the world's top LNG importer, while China and India have witnessed significant increases in LNG imports during the previous decade. Asia-Pacific is both the world's largest consumer and exporter of LNG. The growing use of LNG necessitates using a wide range of equipment, from converting gas into LNG to its transportation, distribution, and storage. Fives was awarded a contract in January 2021 to supply 13 cryogenic centrifugal pumps from Cryomec (8 Cryomec LABS (single and multi-stage type) and 5 Cryomec NLL pumps) for a new Air Separation Unit (ASU) in China. The new ASU, with an oxygen production capacity of more than 2,000 tons per day, will be developed in Tianjin Port Free Trade Zone's Lingang Economic District.

North America is anticipated to exhibit a CAGR of 8.3% over the forecast period. The rising exploration of natural gas reserves and the acceleration of construction activities drive the area sector forward. Favorable regulatory measures relating to the proliferation of low-emission components have aided in the deployment of cryogenic equipment. According to the current Monthly Electric Generator Inventory, 27.3 gigatonnes (GW) of new natural gas-fired capacity will come online in the United States between 2022 and 2025. This additional capacity would add 6% to the existing capacity (489.1 GW as of August 2021).

Furthermore, increased consumer awareness toward adopting sustainable solutions and the increasing substitution of traditional equipment will contribute to product penetration. Furthermore, the scenario for these products has varied as the production base has expanded and the region's infrastructure development rate has increased.

Europe's cryogenic equipment market has a moderate market share due to increased exploration of natural gas reserves and increased construction activity. Favorable regulatory policies about the expansion of low-emission components have aided in the deployment of cryogenic equipment in this region. According to the European Commission, In Q4 2022, LNG continued to surge and broke the previous record, achieving a historic high of 45% of total EU gas imports, an increase of 21 percentage points over Q4 2021. Furthermore, the German cryogenic equipment market had the biggest market share, while the UK cryogenic equipment market had the quickest growth in the European region.

However, following Russia's invasion of Ukraine and a jump in energy prices, natural gas demand in the European Union plummeted by 55 billion cubic meters, or 13%, in 2022, the biggest reduction in history. The decrease is equivalent to the gas required to power nearly 40 million homes. 

The Middle East and Africa are the most important oil and gas-producing regions, accounting for 55% of the world's confirmed conventional natural gas reserves. Qatar, Saudi Arabia, Oman, and Kuwait are the biggest LNG exporters in the Middle East and Africa. The expansion is mostly linked to offshore gas operations in the UAE and Qatar, necessitating cryogenic pumps, LNG storage, and transit equipment.

Segmental Analysis

The global cryogenic equipment market is segmented based on product, cryogen, application, end-user, and region.

The market is further segmented by product into Tanks, Valves, Pumps, and vaporizers, and Vacuum Jacketed Piping.

Tanks hold the major market share. Cryogenic storage tanks are an important part of the industry. They are intended for the storage of liquid gases at extremely low temperatures. These tanks are usually double-walled with enhanced insulation to reduce heat transmission and keep the contents liquid. Cryogenic storage tanks are used for various purposes, including LNG, liquid oxygen, liquid nitrogen, and other gases. Tanks dominated the market, accounting for 40% of total revenue. In developing nations, category growth is driven by the increased need to maintain gases for various critical industrial processes, as opposed to conventional cooling lubricants with longer durability, superior insulation, and less maintenance.

Cryogenic pumps transport cryogenic liquids from storage tanks to locations of application. For specialized uses, vaporizers transform cryogenic liquids back into gas. These parts are critical in transporting and using cryogenic gases in healthcare, metal processing, and food freezing industries.

Based on cryogen, the market is sub-segmented into Nitrogen, Oxygen, Argon, and Liquefied Natural Gas.

Liquefied Natural Gas accounts for the largest market share. Natural gas chilled to cryogenic temperatures, making it easier to transport and store, is known as LNG. The LNG industry requires cryogenic equipment like storage tanks and vaporization systems. LNG is employed in producing energy, marine transportation, and industrial purposes.

Nitrogen in liquid form (liquid nitrogen or LN2) is widely employed in cryogenic applications. It is employed in cryopreservation, as a refrigerant in food processing and pharmaceutical manufacturing, and as a coolant in scientific research and industrial activities.

By application, the segment can be further bifurcated into Distribution and storage.

Storage accounts for the maximum share of the market. The storage sector includes the equipment and facilities necessary to safely and efficiently store cryogenic fluids. Cryogenic storage tanks, dewars, and freezers are examples of this. Cryogenic storage is required in various applications, including biobanking, medical institutions, LNG terminals, and industrial gas production facilities. It ensures the long-term preservation of cryogenic materials while ensuring a consistent supply for end customers.

The distribution segment includes the equipment and systems needed to transport and deliver cryogenic fluids from the source or manufacturing plant to end customers. This includes cryogenic tankers, pipelines, and filling and unloading equipment for cryogenic containers. Cryogenic fluids must be properly transported to diverse business destinations such as industrial gases, LNG, and healthcare.

Based on end-users, the market is divided into Oil and Gas, Metallurgy, Automotive, Food and Beverage, and Chemical.

Metallurgy is a significant contributor to the market. Cryogenic technology is used in metallurgy for various purposes, including cryogenic grinding for metal processing, cryogenic heat treatment to improve material qualities, and the use of liquid nitrogen in metal welding and cutting procedures. The metallurgy industry's considerable use of argon, oxygen, and nitrogen gases will likely fuel the segment's expansion. Nitrogen is commonly utilized in metallurgy for various applications, including annealing, neutral hardening, sintering, cyanidation, and blast furnaces. Rising metallurgy and increased demand for technical gases promote segment expansion. 

The oil and gas industry is a major user of cryogenic equipment. Cryogenic technology is utilized for liquefied natural gas (LNG) handling and shipping, cryogenic separation of gases, and other uses in hydrocarbon exploration, production, and distribution. The oil and gas segment will likely grow further in the coming years, owing to the substantial usage of cryogenic equipment in the oil and gas industry, rising LNG demand, and increased investment in LNG infrastructure.

Recent Developments

• October 2023- Chart Industries completed the sale of Cofimco to PX3 Partners.
• April 2023- Linde (NYSE: LIN) announced a long-term partnership with Evonik, a major specialty chemicals manufacturer, to supply green hydrogen.
• May 2023- Wessington Cryogenics debuted a cryogenic storage tank with liquid hydrogen on the first day of VentureFest North East at Newcastle's Boiler Shop.