Natural Refrigerant Market Research, 2032
The global natural refrigerant market was valued at $1.5 billion in 2022 and is projected to reach $2.7 billion by 2032, growing at a CAGR of 6.2% from 2023 to 2032.
Report key highlighters
- Quantitative information mentioned in the global natural refrigerant market includes the market numbers in terms of value (USD Million) and volume (Tons) with respect to different segments, pricing analysis, annual growth rate, CAGR (2023-32), and growth analysis.
- The analysis in the report is provided on the basis of the gas and application. The study will also contain qualitative information such as the market dynamics (drivers, restraints, opportunities), Porter’s Five Force Analysis, key regulations across the region, and value chain analysis.
- A few companies, including Danfoss, Linde Plc, A-Gas International Ltd., Daikin Industries Ltd., and Evonik Industries AG, hold a large proportion of the natural refrigerant market.
- This report makes it easier for existing market players and new entrants to the natural refrigerant business to plan their strategies and understand the dynamics of the industry, which ultimately helps them make better decisions.
A natural refrigerant is a substance derived from natural sources such as ammonia, water, or carbon dioxide that possesses favorable thermodynamic properties for heat transfer and is used in refrigeration and air conditioning systems. It is characterized by having low or zero ozone depletion potential (ODP) and low global warming potential (GWP), making it an environmentally friendly alternative to synthetic refrigerants. Natural refrigerants have minimal impact on climate change and thus serve as a sustainable and energy-efficient cooling solution.
Increased Awareness Regarding Environment-Friendly Refrigerants
Biological and chemical cycles in nature produce natural refrigerants without human intervention. Natural hydrocarbons, ammonia, carbon dioxide, water, and oxygen are substances with zero or close to zero global warming potential (GWP) and the potential to reduce energy, gas, and water consumption. Switching to natural refrigerants that are better for the sustainable development of the environment is one of the most effective methods to reduce greenhouse gas emissions.
In the past few years, the environmental impact of refrigerants has become a significant concern. With large gaps in the cooling system, these fluids are destroying the ozone layer, enhancing the greenhouse effect in the atmosphere, and contributing directly to global warming. Propane (R290), propylene (R1270), butane (R600), and isobutene (R600a) are the hydrocarbons that are currently the most popular refrigerants. Hydrocarbons can be used as long-term alternatives for residential air conditioning and heat transmission applications to increase productivity growth, as they provide good performance and reasonable energy savings without harming the environment. Thus, increased awareness of eco-friendly refrigerants is expected to drive market growth.
The increasing stringency of government regulations regarding refrigerants acts as a catalyst, propelling the adoption of natural refrigerants in various industries.
According to the U.S. Environmental Protection Agency (EPA), ozone-depleting substances (ODS) are classified as class I- or class II-controlled substances in the U.S. Class I substances such as chlorofluorocarbons (CFCs) and halons exhibit a higher ozone depletion potential and have been phased out in the U.S., with a few exceptions. As a result, class I substances cannot be produced or imported. Class II substances are all hydrochlorofluorocarbons (HCFCs), which serve as transitional replacements for a number of class I substances. As of 2020, the production and import of the majority of HCFCs were prohibited. Consequently, such regulations are anticipated to boost the demand for natural refrigerants.
In addition, natural refrigerants are inexpensive to produce, readily available over the long term, and permit the efficient operation of refrigeration and air conditioning systems. Although ammonia is a highly valuable refrigerant and could also be used for heat pumping (with some limitations due to its high discharge temperature), its use is complex, and it is only cost-effective for large-capacity units in the industrial refrigeration and district heating industries. Thus, all these factors collectively foster the expansion of the market for natural refrigerants.
Using combustible gas frequently involves risk. In many homes, propane or natural gas is used for cooking and heating. The goal of a heat pump that employs a flammable refrigerant is to contain the refrigerant within a hermetically sealed system. In contrast to refrigerators, which are governed by the International Electrotechnical Commission (IEC) standards that permit up to 150 grams of flammable refrigerant, heat pumps with flammable refrigerant charges exceeding 150 grams have no applicable standards. Certain authorities have determined that the risk associated with the use of flammable refrigerants is acceptable if certain precautions are taken. Depending on the extent of the room, the cost may be restricted. The heat pump installation chamber must have adequate ventilation. There may not be any components that can ignite in the event of a spill. Thus, the risks associated with flammable refrigerants can hamper the growth of the natural refrigerants market.
On the contrary, developing countries globally are witnessing high demand for cooling equipment owing to rapid industrialization and an increase in the inclination of industrialists towards efficient cooling systems. Moreover, as per capita disposable incomes are rising in developing countries such as China, India, and Indonesia, the use of air conditioning systems is anticipated to rise, leading to an unprecedented increase in the overall energy demand. Moreover, the surge in demand for quality maintenance and conservation of industrial equipment requiring cold surroundings among several manufacturing units in developing economies coupled with a rise in the demand for absorption chillers in oil & gas refineries offer lucrative opportunities for market growth. Furthermore, a rapid increase in the ownership of domestic air conditioning systems in developing countries is anticipated to open new avenues for the growth of the global natural refrigerant market during the forecast period.
The global natural refrigerant market is segmented into gas, application, and region. By gas, the market is divided into carbon dioxide, ammonia, hydrocarbons, and others. On the basis of application, it is categorized as refrigerators, air conditioning systems, and others. Region-wise, the market is studied across North America, Europe, Asia-Pacific, and LAMEA.
The major players operating in the global natural refrigerant market are Danfoss, Linde Plc, A-Gas International Ltd., Daikin Industries Ltd., Evonik Industries AG, AGC Inc., Air Liquide, HyChill Australia Pty Ltd., Johnson Controls, and Puyang Zhongwei Fine Chemical Co., Ltd.
The carbon dioxide segment accounted for more than three-fifths of the global natural refrigerant market revenue. Carbon dioxide (CO2) is a colorless, odorless, and heavier-than-air liquid under normal conditions. As an inflammable and non-toxic substance, it is categorized as a superior refrigerant. Co2-based refrigerants have no effect on the ozone layer, as their ODP (Ozone Depletion Potential) is 0. However, it can be argued that it does not contribute to climate change because it is a byproduct of industrial processes and would have been released into the atmosphere anyway. As an alternative to synthetic refrigerants, carbon dioxide is one of the most prevalent gases used for supermarket refrigeration. Other applications of this material include heat pump water heaters, commercial refrigerated vending machines, secondary expansion systems, industrial and transport refrigeration systems, and vehicle air-conditioning systems.
Ammonia is the fastest-growing segment with a CAGR of 6.8%. As a result of its excellent thermodynamic properties, zero ozone depletion potential, and low global warming potential, ammonia is acquiring popularity as a natural refrigerant. It is an ideal alternative to synthetic refrigerants for industrial and commercial refrigeration systems due to its high heat transfer coefficient and energy efficiency.
The refrigerators segment accounted for more than half of the global natural refrigerant market revenue and is the fastest-growing segment with a CAGR of 6.4%. There are numerous varieties, including industrial, domestic, and others. There is an immediate need to seek out pure, eco-friendly refrigerants for a better future. The search for refrigerants that do not contribute to the depletion of the ozone layer and global warming has increased the demand for natural refrigerants such as CO2, NH3, and hydrocarbons, which are widely used in refrigerators.
Europe garnered the largest share for around two-fifths of the global natural refrigerant market revenue Europe is attributable to strict environmental regulations that have limited the use of hydrofluorocarbon (HFC) refrigerants and increased the demand for natural refrigerants. Due to the region's high rate of natural refrigerant adoption by end consumers, Europe is also anticipated to be the fastest-growing region in the market. In addition, this region's market for refrigerants is anticipated to expand as a result of the region's population's higher standard of living. Natural refrigerants are more energy efficient, have a lower leakage rate, and are less expensive than fluorocarbons. According to the Air Conditioning and Refrigeration European Association (AREA), the European Association of Refrigeration, air conditioning, and heat pump (RACHP) contractors, the annual turnover in 2020 will approach $26.27 billion (€23 billion). The increasing volume of business reflects the expanding demand for natural refrigerants.
