Refrigerants Market Size, Share & Trends Analysis Report By Product Type (Chlorofluorocarbons (CFCs), Hydrofluorocarbons (HFCs), Hydrochlorofluorocarbons (HCFCs), HydroFluoroOlefin (HFOs), Carbon Dioxide, Ammonia, Propane), By Application (Air Conditioners, Refrigerators, Chillers and Heat Pumps, Others), By End-User (Residential, Commercial, Automotive, Industrial, Marine) and By Region(North America, Europe, APAC, Middle East and Africa, LATAM) Forecasts, 2024-2032

Market Overview

The global refrigerants market size was valued at USD 24.20 billion in 2023 and is projected to reach a value of USD 47.98 billion by 2032, registering a CAGR of 7.90% during the forecast period (2024-2032). The increase in refrigerant market share during the forecast period is related to environmental and safety concerns and application diversity.

Refrigerants are working fluids that absorb and transmit heat within a refrigeration system. It is a material recommended for cooling purposes because of the ability of the refrigerants to absorb heat at low pressure and low temperature and then release heat at increasing pressure and temperature. The key reasons driving the growth of the worldwide refrigerants market during the forecast period are the flourishing cold supply chain and the growing demand for consumer durables. This demand directly results from the strengthening global economy and the rise in disposable incomes throughout the forecast period. Furthermore, it is projected that the expanding automotive and food-beverage sectors will further fuel the expansion of the global market for refrigerants.

On the other hand, the rigorous regulations that governments and environmental groups have imposed due to the negative ecological impact of refrigerants, such as the depletion of the ozone layer and the acceleration of global warming, have negatively influenced the growth of the refrigerants industry. Furthermore, the change in the phase-out of synthetic refrigerants has brought up attractive growth prospects for market players in the natural refrigerants sector. These opportunities have enabled these market players to expand their operations and satisfy the growing demand of customers.

Highlights

• Hydrofluorocarbons lead the market by product type.
• The residential segment holds a significant share by end-user.

Market Dynamics

Market drivers

Environmental and safety concerns

Several environmental and safety concerns are some of the factors that have hampered the growth of refrigerant market demand in the last two decades. According to the Montreal Protocol, an environmental agreement that regulates the production and consumption of ozone-depleting substances (ODS), refrigerants should have zero ozone-depleting potential and minimum global warming potential. Per the Montreal Protocol, refrigerants with non-zero ODP have either been phased out, such as R-11 and R-12 or will be phased out in the upcoming years, such as R-22.

Apart from the Montreal Protocol, various agreements worldwide have been signed to phase out the chemicals that negatively impact the ozone layer. Some of the international environmental agreements leading to the phase-out of such substances are the Montreal Adjustment (2007), the Beijing Amendment (1999), the Montreal Amendment (1997), the Copenhagen Amendment (1992), the London Amendment (1990), the Montreal Protocol on Substances that Deplete the Ozone Layer (1987), and Vienna Convention for the Protection of the Ozone Layer (1985).

Application diversity

Application diversity is of the utmost importance in propelling the worldwide refrigerants market as it increases the demand for refrigerants across numerous industries and broadens the spectrum of possible applications. Refrigerants find application in various sectors, encompassing industrial processes, transportation, refrigeration, and air conditioning. The wide range of industries in which refrigerants are utilized, including pharmaceuticals, chemicals, data centers, and food retail, substantially contributes to the market's expansion and generation of revenue. 

Furthermore, industry expansion is being driven by the rising demand for refrigerants in various applications, including building air conditioning systems in the chemical, pharmaceutical, and culinary sectors. The adoption and market expansion of refrigerants is propelled by their ability to chill diverse sectors suitably. Furthermore, the growing prevalence of emerging trends, such as the utilization of natural refrigerants as a means to tackle environmental issues, emphasizes the criticality of application diversity in influencing the worldwide refrigerants market.

Market restraints

Environmental regulations

As constraints, environmental regulations substantially influence the worldwide refrigerants market. These regulations aim to mitigate the adverse environmental effects caused by refrigerants, specifically those that possess significant ozone depletion potential (ODP) and global warming potential (GWP). For example, the Montreal Protocol specifically focused on CFC refrigerants such as R11 and R12 because of their elevated ODP, resulting in their eventual elimination by 2010. Following this, regulations were imposed on HCFC refrigerants, including R22 and R123, due to their detrimental effects on the ozone layer.

Additionally, developed countries were required to eliminate these refrigerants by 2020, while developing countries had until 2030 to do so. The global promotion of HFC alternatives with zero ODP, such as R410A and R134a, has replaced HCFC refrigerants. To reduce greenhouse gas emissions, however, concerns over the high GWP of HFC refrigerants prompted a drive for low-GWP alternatives. Adopted at the 28th Meeting of the Parties to the Montreal Protocol, the Kigali Amendment set phase-out objectives for HFC refrigerants in developing countries. This reflects the international community's endeavor to tackle environmental issues and advance sustainable refrigerant alternatives.

Market opportunity

Population migrating to urban areas generates need for healthy air-flow solutions

In the commercial sector, refrigerants are primarily used in the HVAC systems to control the temperature of the buildings. The architects and builders are focusing on implementing better and more efficient HVAC systems in these buildings. Over the last two decades, a significant growth trend in the urban population throughout the world has been observed, especially in the Asia-Pacific region. More population traveling to metro cities for IT and other jobs created a need for many commercial buildings. Due to the dense placement of buildings and traffic, city temperature is generally higher than that of rural areas, which creates the need for a robust HVAC system to maintain healthy airflow in the building. Thus, this increase in the demand for HVAC systems across the commercial sector will further fuel the global refrigerant market growth during the forecast period.

Snowballing automotive sector and its need for efficient air conditioning system

The air conditioning systems used in the automotive are called motor vehicle conditioning systems (MVAC). In automobiles, air conditioning systems are used for four applications: cooling, circulating, purifying, and humidifying the air. According to the India Brand Equity Foundation (IBEF), in October 2018, Honda Motors announced that it would build its third factory in India, with an investment of USD 1.31 billion, to launch hybrid and electric vehicles. It is the most significant investment in India's automotive sector so far. Thus, this rise in demand for automobiles is further expected to propel the growth of the global refrigerants market during the forecast period.

Furthermore, refrigerants are extensively used in food processing, pharmaceutical, and storing and distributing sectors. The cooling systems used in the industrial industry differ from their use in other areas by size and operating temperatures. These refrigerants are used in the chiller and HVAC systems in the industrial sectors. The world is growing through rapid industrialization and trade expansion due to the increasing demand from end consumers. Industrialists are rapidly adopting and implementing technologies that create optimum and controlled conditions in manufacturing plants.

Regional Analysis

Asia-pacific dominates the global market

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

Asia-Pacific is the most significant market shareholder and is estimated to grow at a CAGR of 7.5% over the forecast period. This market is being driven by rapid economic growth, notably in the industries of automobiles and consumer goods. The rising urbanization of the region and the improvement in living standards are both factors that contribute to the expansion of the sector. The demand for refrigerants in the Asia-Pacific region is significantly influenced by multiple countries, including China, India, Japan, and South Korea. The expansion of the refrigerant market is supported by the rising disposable income of the growing population in Asia-Pacific, particularly in the context of the requirements for air conditioning in commercial and residential settings.

North America is estimated to grow at a CAGR of 8% over the forecast period. North America is projected to be the region with the fastest-developing refrigerant market. This is because technical improvements and the growing demand for refrigerants drive this growth. Two factors contributing to the market expansion in this region are the rising disposable income and the increasing need for air conditioning in residential settings. The demand for refrigerants is mainly driven by the United States of America, Canada, and Mexico, three of North America's most significant countries.

In Europe, it is anticipated that the market for refrigerants will enjoy significant growth, which will be supported by the expansion of the food and beverage industry and the growing demand for refrigerators. Several variables, such as the demand for refrigerants in various applications and industries, are driving the expansion in Europe. Significant players in the European refrigerants market include countries such as France, the United Kingdom, Germany, Italy, and Spain.

Segmental Analysis

The global refrigerants market is segmented based on product type, application, and end-user.

The market is further segmented by product type into chlorofluorocarbons (CFCs), hydrofluorocarbons (HFCs), hydrochlorofluorocarbons (HCFCs), hydrofluoroolefin (HFOs), carbon dioxide, ammonia, and propane.

Hydrofluorocarbons, often known as HFCs, are a type of refrigerant that does not contribute to the depletion of the ozone layer (ODP). Still, they do have a significant impact on the global warming potential (GWP). Concerns about their high global warming potential have led to a drive toward migrating to low-GWP alternatives in order to minimize greenhouse gas emissions. These alternatives are often utilized as alternatives to chlorofluorocarbons and hydrochlorofluorocarbons.

In the past, chlorofluorocarbons (CFCs) were utilized extensively as refrigerants; however, due to their detrimental effects on the ozone layer, their use has been gradually phased out. As a result of the Montreal Protocol, CFC refrigerants such as R11 and R12 were targeted for eradication, ultimately leading to their complete phase-out by 2010.

Hydrochlorofluorocarbons (HCFCs): HCFCs are refrigerants set aside for elimination because of their detrimental effects on the ozone layer. According to international accords such as the Montreal Protocol, the deadline for the phase-out of HCFC refrigerants is set for 2020 in affluent countries and for 2030 in poor ones.

The market is further segmented by application into air conditioners, refrigerators, chillers, heat pumps, and others.

In air conditioners, refrigerants are utilized extensively to provide cooling and control atmospheric conditions. A number of variables are driving the need for refrigerants in air conditioners. These aspects include expanding urbanization, rising temperatures, and the requirement for comfortable interior conditions.

Refrigerants are essential to refrigeration systems, including residential refrigerators and commercial refrigeration units. Refrigerators are one type of refrigeration system. The need for refrigerants in refrigerators is affected by several variables, including the requirements for food preservation, the expansion of the food and beverage sector, and consumers' shifting tastes for frozen and refrigerated items.

The market is further segmented by end-user into Residential, Commercial, Automotive, Industrial, and Marine.

The residential segment holds a significant share of end-users. The use of refrigerants in residential applications includes the installation of heat pumps, air conditioning systems, and refrigerators in residential homes. The demand for cooling and refrigeration solutions in houses is the primary factor that drives a substantial share of the market for refrigerants, driven by the residential sector.

Commercial end-users include businesses, offices, retail stores, and other commercial establishments that require refrigeration and air conditioning systems. Commercial end-users also include retail stores. Business refrigeration units, cold storage facilities, and heating, ventilation, and air conditioning (HVAC) systems in business buildings are just some of the applications that fall under the purview of the commercial sector.

The automobile industry uses refrigerants in vehicles' air conditioning systems to offer passengers a cooling environment inside the cars. Refrigerants are an essential component in ensuring that automobiles, trucks, and other types of automobiles are kept at comfortable temperatures.

Recent Developments

• March 2024- The ATMO Approved Natural Refrigerants Label has been granted to Zero-C, a refrigeration manufacturer based in Canada and Switzerland. This accreditation demonstrates Zero-C's dedication to advancing natural refrigerants and advocating for environmentally sustainable practices in the refrigeration sector. The ATMOsphere label functions as an international benchmark, showcasing top-tier producers of natural refrigerant systems and components from across the globe.