Transcritical CO2 Market

Market Overview

The global transcritical CO2 market size was valued at USD 49.79 billion in 2022. It is expected to reach USD 203.01 billion by 2031, growing at a CAGR of 16.9% during the forecast period (2023–2031). The primary factor driving the transcritical CO2 market growth rate is the booming demand for the gas in the ice-making, beer-brewing, and margarine producing industries.

New technology called transcritical carbon dioxide (CO2) is applied in heating and refrigeration. For heating and refrigeration, these systems use carbon dioxide as a fluid. Being devoid of chlorine, combustible, and environmentally benign are just a few of its many advantages. With its high level of efficiency in water heating pumps, the CO2 based system is a vapor compression technology utilized in refrigeration and heat pump systems. In residential water heat pumps, there are about four million transcritical CO2 systems installed worldwide.

Carbon dioxide, or CO2, is very important to the environment and human survival. It has negligible potential for global warming and no potential for ozone depletion. As a result, it is frequently evident that CO2, even in its HFC or hydrofluorocarbon form, carries no regulatory liability. Additionally, its reclamation is not required. Transcritical CO2 systems have a low critical temperature (31.1°C) and are nonflammable, nontoxic, and chlorine-free. These systems have negligible heating potential, low ozone depletion potential, and low leakage rates. Compared to fluorocarbon refrigerants, they are more affordable and efficient in energy use. Heat pumps, food processing, storage facilities, ice skating rinks, supermarkets, convenience stores, and other places primarily use these.

Market Dynamics

Global Transcritical CO2 Market Drivers

Rising Demand from Laboratories and Pharmaceutical Processes

In December 2019, the COVID-19 outbreak was deemed a global health emergency. WHO declared this coronavirus-related illness pandemic (World Health Organization). However, even the largest developed nations were unprepared for this pandemic and are still adjusting. Many countries understood that to combat the current pandemic, people would need vaccines and better therapeutic needs. In addition, many nations are increasing their R&D spending and being cautious about combating the current pandemic. The current pandemic has increased demand for pharmaceuticals, laboratories, and product testing facilities worldwide to ensure the top quality of products and people's health. The demand in the Transcritical CO2 market is anticipated to be driven by the rising demand for pharmaceutical processes, laboratories, and product testing facilities during the forecast period.

Expanding Market for Cold Chain

A cold chain is a supply chain that is temperature-controlled and features continuous distribution and storage operations. The cold chain market operations aim to guarantee and increase the shelf life of fresh seafood, frozen foods, photographic film, chemicals, and pharmaceuticals. These businesses are anticipated to experience high demand due to rising consumer demand, primarily due to shifting consumer lifestyles and developing cutting-edge technologies. For instance, convenience has been a significant factor in the continued rise in demand for frozen food worldwide. The market for frozen foods was dominated by the meat sector, with frozen fruits, vegetables, etc., coming in second. Most food processors, distributors, and retailers are moving from manually operated outdated facilities to high bay deep-freeze warehouses, where refrigerants are widely used, due to the rising demand for frozen food products and the existence of a highly competitive market with low margins. Additionally, the demand for cold chain processes has increased due to the growth in international trade and the expansion of retail food chains by multinational corporations and trade liberalization. As a result, the demand for carbon dioxide refrigerants is rising globally.

Global Transcritical CO2 Market Restraints

Impaired Situations as a Result of Covid-19 Outbreak

Due to the closure of commercial complexes because of lockdowns in various countries, COVID-19 has hurt economic growth in several countries. Additionally, COVID-19 is anticipated to impede the switch from high to low GWP refrigerants, specifically transcritical CO2, for the reasons listed below: Uncertain regulatory environment because nations may relax regulations to boost their economies. To use natural refrigerants, equipment must have modifications made to its design. The cost of manufacturing the finished equipment will increase due to this change in design requirements. Furthermore, compared to R404A technology, the cost of purchasing CO2 refrigeration systems is still higher. The COVID-19 pandemic has brought attention to flaws in the cold food chain, inspiring organizations like the Consortium for Energy Efficiency (CEE) to design a clean cooling system. All these factors are anticipated to limit the transcritical CO2 market's expansion during the anticipated period.

Global Transcritical CO2 Market Opportunities

Rising Environmental Concerns

There is growing interest in the environmentally friendly use of CO2 transcritical system solutions for supermarket refrigeration, and several installations are already operational in various European nations. The demand for transcritical CO2 is anticipated to rise due to rising environmental concerns worldwide, particularly in countries like India, China, and Russia. The most environmentally friendly option for commercial refrigeration is transcritical CO2, which is a suitable replacement for HFO and HFC-based systems. This shows that transcritical CO2 is regarded as a long-term fix for commercial refrigeration installations.

A component of the atmosphere called CO2 is necessary for life. Like HFCs, CO2 has no regulatory liability because it has no potential to deplete the ozone layer and has a significant potential to increase global warming. It is optional to account for the amount used or to claim it back. The refrigerant of choice for food retailers is increasingly CO2. Ten thousand supermarkets worldwide switch to transcritical CO2 refrigeration systems each year, which is rising.

Regional Analysis

The global transcritical CO2 market is segmented by region into North America, Europe, Asia-Pacific, South America, and the Middle East and Africa.

Europe Dominates the Global Market

Europe transcritical CO2 market is the most significant revenue contributor and is expected to grow at a CAGR of 18.87% during the forecast period. The German economy is the fifth largest in the world and the biggest in Europe. The German economy expanded by 0.6% in 2019, the slowest growth rate in the previous five years. Many factors, including government policies on debts, fiscal adjustments, and trade tensions that reduce exports, impact the country's economic growth. By announcing the availability of funds (totaling more than USD 600 billion), the nation hopes to halt the further decline of the economy brought on by the COVID-19 impact and ensure future growth and smooth operation in several public sectors.

Asia-Pacific transcritical CO2 market growth is expected to reach at a CAGR of 18.09 % during the forecast period. China has the largest GDP in the Asia-Pacific region. China has seen an increase in the building and development of cold storage facilities in recent years, particularly in the central areas to produce fruits and vegetables and in the suburbs of large and medium-sized cities like Shanghai and provinces like Jiangsu, Zhejiang, Hubei, and Henan. According to a government announcement from February 2019, China is anticipated to increase cold storage and logistic facilities for agricultural products over the following four years. Beijing's five-year plan to revive the agricultural sector by enhancing the quality of its output may prioritize the construction of pre-cooling, storage, and freshness-retaining infrastructure facilities in its leading production regions.

The United States is the largest and most potent economy in the world. The use of natural and low GWP materials has grown in the nation due to the laws. Non-halocarbon refrigerants, like R-744 (carbon dioxide), are used more frequently in supermarket refrigeration across the United States, both in transcritical and cascaded systems. Climate Alliance regulations drive the market for green and low GWP refrigerants to reduce high GWP refrigerants. The American Institute of Architects predicts that the industrial sector in the US will grow by 0.5% in 2020 and 0.3% in 2021. The demand for cold storage units is anticipated to rise significantly in Los Angeles and New York, with the highest food production levels, such as California, Washington, Florida, Texas, and Washington.

Brazil's economy has experienced volatility recently. The nation's economy has shrunk due to political unrest, high inflation, low export prices, and low levels of consumer confidence. The Montreal Protocol, which encourages ozone layer protection measures, has been ratified by Brazil. The protocol sets goals for eliminating the substances which cause ozone layer thinning. Additionally, the Kigali amendment to the Montreal Protocol in 2016 further restricted hydrofluorocarbons (HFCs) due to how they affected the world's climate system. Since the nation ratified the Montreal Protocol thirty years ago, it has gradually phased out the consumption of roughly 17,000 metric tons of substances with ozone-depleting potential. In agriculture, these substances include methyl bromide, halons, CFCs, and CTCs. However, these protocols have had an impact on local market research. One of the largest food producers in the world is Brazil. Due to rising domestic demand, foreign investments, and exports to Middle Eastern nations, the country's food industry has experienced significant growth in recent years.

The economy of South Africa has recently experienced erratic growth. Transcritical CO2 has a huge market potential in South Africa, mainly because of the growing environmental worries about how using conventional refrigerants contributes to global warming. The retail sale of frozen fish and seafood, primarily meat products, makes up South Africa's frozen food market. As South Africans consume more vegetables and protein and lose their aversion to frozen foods, which have long been viewed as unsatisfactory diet options or containing an excessive amount of artificial ingredients, the market for frozen meals is growing. As a result, there is an increase in demand for cold chains, increasing demand for transcritical CO2 throughout the nation. Transcritical CO2 refrigeration systems are also used in many retail outlet companies' stores. As an illustration, the food retailer Pick n Pay PnP opened its first transcritical CO2 store in Milnerton, Cape Town, in September 2018. The market demand for transcritical CO2 in the nation is represented by the 16 transcritical stores that are currently present there, with a projected 32 by the end of 2020.

Segmental Analysis

The global trans-critical CO2 market is segmented by application.

Based on application, the global trans-critical CO2 market is bifurcated into commercial refrigeration, industrial refrigeration, and supermarkets.

The supermarket segment is the highest contributor and is expected to grow at a CAGR of 19.52% during the forecast period. Convenience stores and supermarkets are more likely to use refrigeration. Transcritical CO2 refrigeration has a high safety rating and is considered nontoxic and nonflammable, so its use has expanded quickly in recent years. Additionally, because of these systems' high volumetric cooling capacity, supermarkets have a very high application demand for transcritical CO2. Additionally, refrigeration systems account for more than 50% of the total electricity used in supermarkets. By lowering the cost of refrigeration system maintenance, transcritical CO2 aids retailers in reducing their energy consumption. Additionally, compared to other refrigeration systems, transcritical CO2 systems operate at a higher pressure. These systems are preferred for supermarket applications because of their low GWP and ODP, so their use is expanding.

Industrial coolant systems typically need larger cooling capacities to operate at higher extreme temperatures than other refrigeration disciplines. Because the working fluids in transcritical CO2 systems transition between subcritical and supercritical states, these systems can generally be identified. Plans for industrial refrigeration typically require capacities between 25 kW and 30 MW. The primary industries where industrial refrigeration is used are meat processing, cold storage, food processing, and district heating and cooling. The use of transcritical CO2 in the food production and processing industries is growing. Many businesses worldwide have upgraded their transcritical CO2 systems in their industrial cold storage systems. As a result, the use of transcritical CO2 in industrial refrigeration is expanding in response to the rising demand for environmentally friendly and more effective systems brought on by strict regulations on industrial emissions.

Recent Developments

• October 2022- Danfoss and Beijer Ref renewed their partnership agreement to place greater emphasis on sustainability.
• October 2022- One of the biggest stainless-steel manufacturers in India, Jindal Stainless Limited (JSL) and Lind announced that their existing long-term agreement to supply industrial gases had been expanded.