Refrigeration Lubricants Market

Market Overview

The global refrigeration lubricants market size was valued at USD 3,285.76 million in 2022. It is estimated to reach USD 4,466.48 million by 2031, growing at a CAGR of 3.47% during the forecast period (2023–2031).

Refrigeration is a technology that provides benefits like food preservation, control of indoor air quality, gas liquefaction, industrial process control, storage and transport of food and drinks, computer cooling, etc. The purpose of refrigeration lubricant is to be used in cooling systems. In order to maintain the refrigeration unit's smooth performance, it is used to lubricate the compressor. The refrigerant is not reactive with the qualities of refrigeration lubricant, which include chemical and thermal stability.

The lubricant lessens friction in the compressors, halting further compressor deterioration. Mineral and synthetic oil are options used as base oil for refrigeration lubricants. These lubricants are employed in the air conditioning systems of automobiles, refrigerators, and freezers. Refrigeration lubricants, such as air conditioning, chillers, and coolers, are essential for refrigeration systems' performance and longevity.

Highlights

• Mineral oil lubricants dominate the base oil segment
• Air conditioning dominates the application segment
• Asia-Pacific is the highest shareholder in the global market

Market Dynamics

Global Refrigeration Lubricants Market Drivers

Emergence of New Generation Refrigeration Lubricants Optimized for Energy Efficiency

Inefficient energy use and wasting valuable resources can lead to global warming. Developing technologically and economically viable solutions is crucial for environmental protection and resolving the energy dilemma. This scenario demanded the emergence of new-generation refrigeration lubricants optimized for energy efficiency. New-generation POE refrigeration lubricants provide energy-efficient lubrication solutions for refrigerants like CO2(R-744), HFO, and difluoromethane (R-32). Similarly, refrigerants, like hydrocarbons and ammonia, receive lubricant solutions from new-generation PAOs and PAGs, respectively.

For example, Patech Fine Chemicals Co. Ltd provides a range of polyol ester (POE) refrigeration lubricants for following-generation refrigerants, such as R32 and HFO. R32 has a GWP of 675, and HFO has a GWP of less than 10. Synthetic polyol esters (POE) lubricants are provided with greater lubricity and improved energy efficiency, designed specifically for refrigeration and air-conditioning compressors employing HFC refrigerants. The limitations of current refrigerant lubricants led to the development of new-generation refrigeration lubricants, which are optimized for energy efficiency. This is expected to drive market demand over the forecast period.

Recovering Automotive Industry

Refrigeration lubricants are critical components of any transportation A/C system. Besides providing good lubricity, the materials also offer sufficient solubility to the refrigerant to ensure the return of lubricants to the compressor. Automotive A/C compressors are mainly designed to run under elastohydrodynamic (EHL) or hydrodynamic regimes, where a lubricating film always separates the moving metal surfaces. In 2021, with the decrease in the impact of COVID-19, various governments around the world eased lockdowns and travel regulations, and the automotive industry resumed its operations. During the nine months of 2021, automobile production reached 57.26 million units, increasing by 10% from the same period in 2020, augmenting the demand for the market.

Global Refrigeration Lubricants Market Restraint

Phasing Out of Existing Refrigerants Due to Constant Regulations and Amendments 

Chlorofluorocarbons (CFCs) are widely used as refrigerants. However, it was discovered that CFCs cause ozone depletion. This created a significantly different approach to the design of refrigerators. Likewise, the rapid ozone depletion increased the pressure to discontinue CFC use. As a replacement for CFCs, another class of halogenated compounds, namely hydrochlorofluorocarbons (HCFCs), were proposed as a short-term solution. In addition to the ozone-depleting atom chlorine, these compounds also include hydrogen, which is less detrimental to the ozone layer.

HCFCs are not as damaging to the ozone layer as CFCs. The ozone depletion potential of HCFC ranges from 0.01 to 0.13. However, many systems now employ HFCs instead of HCFCs, while HCFCs are still used in underdeveloped countries. At the national and global levels, regulations have been the most important restraints for refrigerants. HCFCs are anticipated to be completely phased out by 2030, restraining the market growth.

Global Refrigeration Lubricants Market Opportunities

Increasing Momentum in the Global HVACR Industry

HVAC (heating, ventilation, air conditioning, and refrigeration) is important in residential and commercial buildings. Refrigeration lubricants for high-purity ammonia, such as R600a (isobutane), R290 (propane), R1270 (propene/propylene), R1150 (ethene/ethylene), and R170 (ethane), are used in a wide range of applications in domestic refrigeration, industrial refrigeration, and transport refrigeration. These are also used in small air conditioning systems, heat pumps, water heaters, and large air conditioning and chiller systems.

The International Energy Agency (IEA) reported that since 1990, the amount of energy used for space cooling has more than tripled, providing significant issues for electricity infrastructure, particularly during periods of high demand and extreme heat. According to the same source, around 2 billion air conditioners are currently in use worldwide, making space cooling one of the most important drivers of increased electricity consumption in buildings and expanding generation capacity to satisfy peak power demand. In the coming decade, rising living standards, population increase, and more frequent and harsh heat waves will result in enormous cooling demand. As a result, the number of air conditioners installed may increase by another 40% by 2030, creating opportunities for refrigerating lubricants market to grow.

Regional Analysis

Based on region, the global refrigeration lubricants market is bifurcated into North America, Europe, Asia-Pacific, South America, and the Middle East and Africa.

Asia-Pacific Dominates the Global Market

Asia-Pacific is the most significant global refrigeration lubricants market shareholder and is anticipated to exhibit a CAGR of 3.81% during the forecast period. The greatest market for refrigeration lubricants is in the Asia-Pacific region. The increasing use of air conditioning systems for residential and commercial purposes is responsible for the increased need for refrigeration lubricants. The world's biggest automobile hub is in China. According to OICA, the nation's total vehicle output in 2021 was 260,822,220, up 3% from 2020. In addition, China's top three electric vehicle producers are Tesla, BYD Co., and Nio Inc. The nation's increasing demand for electric vehicles drives the market for refrigeration lubricants for automobile compressors. According to the OICA study, China manufactured 18,242,588 vehicles in the same period as Europe, producing 11,886,776 units during the first and third quarters of 2021. As a result, the demand for vehicle air conditioning is rising. India produced 32,89,683 electric vehicles in the first three quarters of 2021, a startling 53% increase from 2020. The market is expected to grow over the forecast period due to the developing automotive industry.

North America is anticipated to exhibit a CAGR of 3.40% over the forecast period. North American market comprises the U.S., Canada, and Mexico. The U.S. dominates the regional market. The refrigeration and air-conditioning system has one of the major demands from the United States construction sector compared to the other countries in North America due to its larger market size and active investments in developing the construction sector. The National Association of Realtors estimates that by the end of 2020, the U.S. building market was worth approximately USD 1.36 trillion. Hence, the market is expected to show steady growth in the forecast period, with mixed residential and non-residential growth in the forecast period. In terms of car production, the United States comes in second place to China. In 2020, the nation manufactured 8.82 million automobiles, a 19% decrease from the 10.89 million produced in 2019. Furthermore, in the first nine months of 2021, the nation produced 68,57,182 vehicles, a 10% rise over the same time in 2020. The car output is significantly below pre-covid levels and is anticipated to influence the market.

Germany was the largest revenue contributor to the European regional market. Germany is witnessing a sharp increase in rail transport infrastructure investments. According to Organization for Economic Co-operation and Development (OECD), in 2018, rail transport infrastructure investments in Germany were more than EUR 6.1 billion, an increase of about 7.5% from the previous year. To continue such growth, it started investing in the 10-year plan called "the biggest railway modernization program." In addition, according to a deal made in January 2020 between Germany and its main train operator, Deutsche Bahn, the "largest modernization project ever" in that country will cost EUR 86 billion over ten years. In Germany, public and private sector investments in infrastructural, residential, and commercial construction projects predominate. Commercial and non-residential structures in the nation are predicted to experience a vital increase in the years to come. Furthermore, lower interest rates, rising real disposable incomes, and many investments by the German and European Union governments contribute to the rise. The growth in the construction segment is expected to boost the refrigeration lubricants market in the country during the forecast period.

South American region includes Brazil, Argentina, and the rest of South America. Brazil is the largest contributor to the regional market growth. Major vehicle manufacturers have set up their facilities in Brazil owing to resource availability and skilled labor. Moreover, increasing demand for passenger vehicles and mini trucks, coupled with the rising popularity of electric vehicles, is expected to impact the automobile industry in the country positively. Therefore, it will likely support the market studied over the forecast period. In addition, Argentina's construction industry is suffering from a severe downturn. Argentina faces a large structural housing deficit. The Department of Urban Development and Housing states that ~25% of Argentine families need improved housing. This strong and growing housing demand faces a daunting lack of supply. The poor construction industry growth has limited the country's demand for refrigeration and air-conditioning.

Segmental Analysis

The global refrigeration lubricants market is segmented by base oil and application.

Based on base oil, the global refrigeration lubricants market is bifurcated into mineral oil lubricants and synthetic lubricants. 

The mineral oil lubricant segment dominates the global market and is anticipated to grow at a CAGR of 3.01% over the forecast period. Mineral oil is derived from crude oil. Due to their superior lubricating properties, these are the most popular and economical categories of liquid lubricants. Mineral oil is not a single substance but a mixture of hydrocarbons isolated from crude petroleum oil. For best performance, the carbon content is kept between 83 and 87% by weight, while hydrogen is kept between 11 and 14%.

In addition, mineral-oil-based lubricants are frequently used for multipurpose lubrication of mechanical components, like bearings, chains, gears, slides, and threaded connections, whose operating temperatures typically vary from -17°C to 150°C. This is due to their outstanding lubricating qualities. Mineral oils combine paraffin, naphthenes, and aromatic oils and are used in refrigerator compressors as they are hydrocarbon mixtures without wax. They are particularly suited for refrigerants like CFC (chlorofluorocarbon), HCFC (hydrochlorofluorocarbon), and ammonia. Each base oil has unique qualities that affect how well they withstand various lubrication difficulties. The refining process for mineral oil aims to enhance the resulting qualities to create a superior lubricant.

Synthetic lubricants are made through a synthesizing process and can be formulated in several formulations with unique properties for the desired purpose. Most synthetic oil-based lubricants possess a higher viscosity index and flashpoint but exhibit lower pour points than mineral oils. Synthetic bases, such as polyalphaolefin (PAO), alkylated aromatic, and polybutene, are widely used in the refrigeration lubricant industry. In general, synthetic lubricants can offer larger advantages since they have characteristics that are affected by high temperatures, such as oxidative and thermal stability, which can lengthen service life. Synthetics, such as PAOs, outperform mineral oils when the lubricant might experience cold starter temperatures or high operating temperatures. Synthetic lubricants are easily compatible with modern refrigerants. Although many fluids can be used as refrigerants, CFCs have recently become the most popular refrigerants. Thus, the production of ultra-refrigeration components has a higher demand for synthetic lubricants and is likely to upscale during the estimated period.

Based on application, the global refrigeration lubricants market is segmented into air conditioning and refrigeration. 

The air conditioning segment owns the highest market share and is estimated to grow at a CAGR of 3.46% during the forecast period. Air conditioning (AC) units are designed to modify humidity and air temperature in an enclosed area. The primary components of an air conditioner are a compressor, evaporator, expansion valve, and condenser. These components are also the areas where cooking with oil can result in a loss of efficiency. Lubricants reduce side effects, such as pipeline corrosion, and provide better compatibility with common refrigeration gases. Refrigeration lubricants have multiple purposes, such as removing heat, lubricating moving parts, acting as a sealant, and cooling the critical components of compressors.

Additionally, the demand for air conditioning lubricant is expected to ascend in the coming years owing to the surge in the manufacturing and sale of air conditioners. The market for refrigeration lubricants is being supported by rising demand for air conditioners from the construction industry and vehicles worldwide. The growing population, estimated to influence residential and commercial constructions positively, is also expected to increase demand for air conditioning systems.

Refrigeration lubricants are critical components of any transportation A/C system. Besides providing good lubricity, the materials also offer sufficient solubility to the refrigerant to ensure the return of lubricants to the compressor. The transportation segment includes passenger, commercial, railroads, marine, and airways. Refrigeration lubricants are designed for refrigeration systems with very high reciprocating compressor temperatures, shallow evaporator temperatures, and screw compressor systems using refrigerants such as HFC. With young people's growing interest in traveling and exploring uncharted territories, the demand for transportation facilities is witnessing an all-time high. Major airway service providers, such as Lufthansa, Etihad, Virgin, etc., are increasing transportation units to cope with the growing demand.

Recent Developments

• March 2023- Hindustan Petroleum Corporation Ltd. (HPCL) signed an agreement to produce, supply, and market Chevron's lubricants in India.

• August 2022- Fuchs Petrolub SE, a joint venture in Vietnam, acquired land to construct a lubricant facility. The company purchased a 20,000-square-meter site and intended to invest 8 million euros (8.6 million dollars) to construct the plant. The facility will produce lubricants for the automotive aftermarket, mining, and industrial sectors. Under the segment for industrial lubricants, the company provides refrigeration lubricants.