Refrigeration Oil Market - Global Forecasts to 2026
The refrigeration oil market size is projected to reach USD 1.4 billion by 2026 from USD 1.1 billion in 2021, at a CAGR of 4.1%. Refrigeration oil is a high-temperature formulation composed of additives and oil, specially formulated to perform in extreme environments.
These oils are designed for use in cooling systems. The major use of refrigeration oil is to lubricate the compressor bearings and other moving parts. It is also used to reduce friction on metal parts, reduce wear on the compressor, and extend the life of the system. The different types of refrigeration oils used are mineral oil and synthetic oil. These are used in applications such as refrigerator & freezer, air conditioner, automotive AC system, and aftermarket for refilling.
Impact of COVID-19 on refrigeration oil market
The refrigeration oil industry got affected negatively by the pandemic. Owning to the pandemic situation, several countries around the world went into lockdown, to curb the spread of the virus. Due to this the supply and demand chain got disrupted affecting the market. The industries, manufacturing units and mining operations got on hold for the past two years due to the pandemic situation leading to the reduced sales in electronics and automotive.
The fluctuating price of raw materials used to make refrigeration oil and COVID-19 pandemic have hindered the growth of the refrigeration oil market. The companies on a brighter side are expecting the situations to get back to normal and the market to improve in the near future. The countries such as China, US, among the others are back on their feet continuing their regular work.
Increased demand for frozen food and pharmaceutical industries
One of the major drivers for the refrigeration oil market is increase in the use of frozen food and pharmaceutical industries. These are the major users of refrigeration oils in the refrigerator & freezer application. Rising population and changing food habits drive the growth of packaged and ready-to-eat food products which are perishable and needs to be stored at low temperature. Also, the pharmaceutical industry also requires low-temperature conditions for the transportation and storage of drugs. The pharmaceutical industry is witnessing significant growth, especially in major emerging economies of APAC such as China and India. Therefore, the growth in the pharmaceutical industry is expected to drive the refrigeration oil market.
Stringent regulations to limit the use of fluorocarbon refrigerants
Governments of various countries are imposing regulations to limit the use of refrigerants, as fluorocarbon has an adverse effect on the atmosphere’s ozone layer. Currently, over 147 countries hold Article 5 Parties. These include developing countries such as China, India, Kuwait, Malaysia, Singapore, South Africa, Thailand, and Turkey. As per the Montreal Protocol, HCFC must be phased out by 97.5% by 2030–2040 and completely by 2040 for the Article 5 Parties
Technological & product innovation
The current market demand is concentrated on refrigeration oil that are cost-effective and meet the minimum standards or regulations mandated in the region. With changing nature of applications, customers demand more functions apart from cooling. Customers are becoming more focused on multi-functional refrigerators & freezers, air conditioners and also for automotive. So the increasing demand for new and innovative electronics leads to technological and product innovation.
APAC to account for the largest share of the global refrigeration oil market during the forecast period
APAC is an emerging market for the refrigeration oil market, and it is mainly attributed to high economic growth rate, followed by heavy investment across industries such as oil & gas, automotive, infrastructure, chemical, and electronics among others. With economic contraction and saturation in the European and North American markets, the demand is shifting to the APAC region.
Refrigeration oil manufacturers are targeting this region as it is the strongest regional market for various applications, such as automotive, electronics and home appliances among others. The advantage of shifting production to the Asian region is that the cost of production is low here. Also, it is easier to serve the local emerging market.
Key Market Players
The key market players profiled in the report include as Eneos Holdings Inc. (Japan), BASF SE (Germany), Idemitsu Kosan Co. Ltd (Japan), ExxonMobil Corporation (U.S.), Royal Dutch Shell Plc. (Netherlands), Total Energies SE(France), China Petrochemical Corporation (Sinopec Corp), Petroliam Nasional Berhad(Petronas), FUCHS Petrolub SE (Germany), Johnson Controls(Ireland).
Eneos Holdings Inc. is one of the world’s leading manufacturers and innovators of petroleum, natural gas, and metals. . The company operates through four business segments, namely, Energy, Metals, Oil, Natural gas E&P, and Others. . The company operates through four business segments, namely, Energy, Metals, Oil, Natural gas E&P, and Others. The company operates its refrigeration oil business in Japan, China, and other among other countries
BASF SE is one of the largest chemical producers in the world. It engages in manufacturing and selling a wide range of chemicals and intermediate solutions. The BASF Group comprises subsidiaries and joint ventures in more than 80 countries and operates six integrated production sites and 390 other production sites in Europe, Asia, Australia, America, and Africa. BASF has customers in over 200 countries and supplies products to a wide variety of industries. The company has a presence in more than 60 countries of Europe, North America, APAC, South America, and the Middle East & Africa.