The refrigerants market is projected to reach USD 8.4 billion by 2027, at a CAGR of 6.2% from USD 6.2 billion in 2022. The major drivers for this market are the increasing demand for consumer appliances such as refrigeration and air conditioning equipment and the growing cold chain market. Factors such as growth in the organized retail framework, a shift toward horticultural crops, and growth in the processed food sector have also contributed to the demand for refrigerants. Increasing regulations against fluorocarbon refrigerants due to their flammability and toxicity issues restrain the market growth.
Refrigerators and air conditioners are the major appliances requiring refrigerants. The improvement in the standard of living, rapid urbanization, and growing disposable income are contributing to the demand for refrigerators and air conditioners. The growing food and healthcare industries are also driving the market, as these industries require refrigerators to preserve food items and drugs.
Various governments and agencies are imposing regulations to limit the usage of fluorocarbon refrigerants as they cause severe damage to the ozone layer. Several countries have agreed to phase out the use of HCFCs and HFCs by imposing limitations on their consumption through various protocols and regulations. The regulations such as F-Gas regulations, Montreal Protocol, Kigali Amendment, SNAP regulations, and Ozone Protection & Synthetic Greenhouse Gas Amendment Bill restrict the growth of the fluorocarbon refrigerants market.
The most used natural refrigerants are ammonia, carbon dioxide, and HCs such as propane and isobutene. Technological advancements in cooling equipment are replacing traditional refrigerants such as HCFC and HFC with natural ones. This has increased the market share of natural refrigerants in applications such as air conditioning, refrigeration, and heating systems.
Illegal imports of refrigerants such as HFCs pose a major threat to the safety and health of users, installers, and equipment. The illegal import of refrigerants calls for legal action from authorities and can also impact the reputation of companies. According to a report by EURACTIV, the number of illegal refrigerants entering Europe in 2018 was equivalent to 20% of the legal F-gas quota.
HFC & blends accounted for the largest market share, followed by carbon dioxide in terms of volume, in 2021. Following the phase-out of chlorofluorocarbons (CFCs) and later HCFCs, which were also greenhouse gases, HFC & blends became popular. Although HFCs are greenhouse gases but not as potent as CFCs or HCFCs. Following the phase-out of CFCs and HCFCs, demand for HFCs has risen rapidly and further increased with the expansion of air conditioning in developing countries.
The refrigeration system segment led the global refrigerants market, with a market share of 41.4%, in terms of volume, in 2021. Within the refrigeration system segment, the industrial refrigeration system accounted for the largest market share due to the high-volume usage of refrigerants in the segment.
Asia Pacific is the largest refrigerants market, followed by North America and Europe in 2021. The key factor driving the demand for refrigerants in the Asia Pacific region is the presence of manufacturing and other industries that use refrigerants in applications such as refrigeration systems, air conditioning, and chillers. Factors such as a huge industrial base, increasing disposable income, increasing urbanization, and changing lifestyles are expected to drive the market for refrigerants in different application segments and make Asia Pacific the largest and fastest-growing market.
The key players in this market are Honeywell International Inc. (US), The Chemours Company (US), The Linde Group (Ireland), Air Liquide (France), Daikin Industries Ltd. (Japan), Sinochem Group (China), Arkema S.A. (France), and Orbia (Mexico). Continuous developments in the market—including new product launches, mergers & acquisitions, agreements, and expansions—are expected to help the market grow. Leading manufacturers of refrigerants have opted for new product launches to sustain their market position. They are introducing several products and investing substantially to increase their production capacity of refrigerants.