Refrigerant Market Size & Share Report By Product (Fluorocarbon, Hydrocarbon, Inorganic), By Application (Stationary Air Conditioning, Chillers, & Heat Pumps, Mobile Air Conditioning, Commercial), And Segment Forecasts, 2014 - 2025
The global refrigerant market size was valued at USD 19.17 billion in 2016. Asia Pacific and Latin America are two of the fastest growing regions in terms of volume and are characterized by rapid urbanization as well as evolving cold chain sectors. The industry is, however, highly reliant on regulations and policies of various environment protection agencies.
The air conditioning industry accounts for the largest share by consumption, with mobile air conditioning, a sub-application, expected to witness substantial growth. Rising demand for air conditioning in automobiles as a comfort feature is a key factor driving this segment.
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Increase in demand for energy-efficient cooling solutions and rising awareness regarding global warming and ozone depletion is expected to shape the industry over the forecast period. Fluorocarbon phase-out as per regulations laid down by the Montreal Protocol and updated by the Kyoto Protocol has led to a resurgence in demand for natural refrigerants. The hydrocarbon and inorganic segments are, therefore, expected to witness considerable growth.
Increased industrialization in emerging economies such as China, India, and Japan has led to establishment of a large number of data centers, subsequently fueling demand for refrigerants. Factors such as rise in manufacturing units across Asia Pacific and surge in demand for improved maintenance of industrial equipment will further augment the global refrigerant market.
<h3><strong>Product Insights</strong></h3>
Fluorocarbons emerged as the dominant product segment in 2016, accounting for 53.13% of the overall volume. They are extensively used for domestic purposes and in air conditioning equipment. However, stringent government regulations imposed on consumption and manufacture of fluorocarbons owing to potential ozone depletion and global warming are likely to hamper the growth of this segment.
HFCs are widely utilized in air conditioning applications as they are less harmful to the atmosphere in comparison to other fluorocarbon refrigerants. They also serve as the most prominent substitutes for phased-out CFCs and HCFCs. Emerging nations are slowly phasing out fluorocarbon refrigerants and are working on phasing out HCFCs. This will, in turn, result in high demand for HFCs globally.
Energy efficiency, low cost, and ecofriendly nature of hydrocarbons are key traits driving their demand. They are also being increasingly preferred as an ideal substitute for fluorocarbon-based cooling equipment and processes owing to cheap prices and easy availability. Europe serves as a prominent consumer of hydrocarbons, as the air-conditioning industry in the region has been swiftly employing them in all their cooling products.
Inorganic refrigerants emerged as the second-largest segment in 2016, accounting for 24.17% of the overall volume. Its superior thermal efficiency has allowed it to play a significant role in industrial applications. Owing to low cost, easy availability, and ecofriendly nature, the segment is expected to grow steadily in future.
Stringent regulations and policies proposed by the United Nations Framework Convention on climate change regarding global warming and ozone depletion substances is expected to play a crucial role in boosting demand for hydrocarbon and inorganic refrigerants. Multinational companies in the field are increasingly investing in R&D to develop novel and ecofriendly offerings to ensure a sustainable business model.
<h3><strong>Application Insights</strong></h3>
The stationary air conditioning, chillers, and heat pumps segment dominated the market by application and accounted for over 47% of the overall volume in 2016. Increased spending power of the middle class on consumer appliances, such as refrigeration systems, has resulted in the growth of this segment. Rising demand for cooling equipment owing to rapid industrialization, deteriorating weather conditions, and growth in the manufacture of consumer appliances has also positively influenced its demand.
Commercial refrigeration is another application witnessing significant growth. Increasing hypermarket, supermarket, and food retail chains, coupled with rise in consumption of packaged and frozen foods, has boosted the demand for commercial refrigerants.
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The mobile air conditioning application segments represents fast-growing and lucrative opportunities owing to rapid expansion of automotive manufacturing in emerging economies. Significant increase in consumer disposable income has substantially increased passenger car sales in countries such as China, India, Vietnam, Thailand, Venezuela, Argentina, and Indonesia.
Domestic refrigeration demand is fueled by rising adoption of energy-efficient and environment-friendly products in developed economies like North America and Europe. Across emerging economies such as Asia Pacific and Middle East and Africa, demand for domestic refrigeration is spurred by food wastage concerns, need for improved food quality, and increase in disposable income, leading the more affluent middle class to spend more on modern appliances.
Growth of refrigeration market, particularly in cold-chain logistics, is driven by the boom in international trade of perishable commodities, consumer demand for frozen and chilled food and beverages, and demand from the life science and pharma industries. The segment is expected to witness substantial growth in Asia Pacific owing to increased healthcare spending, booming trade of fruits and vegetables and confectionery, and increased spending by the middle class on frozen food and beverages.
Air conditioning is observed to be gaining importance as a comfort feature in automobiles, thereby influencing consumer purchasing behavior and generating high demand for mobile air conditioning products and services. Air conditioning has also been considered as a factor resulting in increased efficiency in off-highway automobile applications, which has further boosted its demand.
<h3><strong>Regional Insights</strong></h3>
Asia Pacific emerged as the leading consumer in 2016, accounting for 33% of the total volume. It is also projected to be the fastest growing regional segment on account of several macro-economic factors such as burgeoning population, rising consumer disposable income, and rapid urbanization and industrialization.
In North America, the inorganic segment has gained a greater share due to technological advancements in the cold chain sector, increased concerns over food wastage, growing demand for refrigerated food and beverages, and stronger penetration of supermarkets. Ammonia held the dominant share in the inorganic segment owing to excellent cooling and efficiency exhibited by the compound.
Europe is the second-largest regional segment in terms of consumption owing to strong demand from mobile air conditioning, industrial, and commercial segments. The region is regulated by numerous legislations and manufacturers are compelled to adhere to stringent guidelines in order to ensure overall sustainability of products.
The Middle Eastern government has increased its backing for urban and infrastructural developments in countries such as Saudi Arabia, Qatar, Oman, and Egypt. These developments have upped the demand for air conditioning equipment, thereby promoting growth.
Several manufacturers have established production facilities in emerging economies and initiated joint ventures with Asian companies to expand their capacities and tap into lucrative opportunities presented by end users. Furthermore, availability of cheap labor and resources assists in reducing production costs, and cater with lost cost offerings for the refrigeration industry in the region.
<h3><strong>Refrigerant Market Share Insights</strong></h3>
Major industry participants include Honeywell International, Daikin Industries Limited, Dongyue Group, Arkema S.A., Linde Group, Mexichem SAB de C.V., Sinochem Group, Air Liquide, and The Chemours Company.
Honeywell International is a pioneer in developing low GDP and OWP blends. Innovations such as these are expected to inspire other industry players to invest significantly in R&D and production of environment-friendly products to meet stringent regulatory specifications and changing consumer preferences.
New entrants are expected to face challenges from volatile raw material prices and from multinational companies employing advanced technologies. Existing players are engaged in extensive R&D and expansion activities to increase their global presence and are developing innovative cost-effective products to meet specific application requirements.
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