Low GWP Refrigerants Market - Forecast(2023 - 2028)

Low GWP Refrigerants Market Overview

The Low GWP Refrigerants Market size is forecast to reach US$32.1 billion by 2027 after growing at a CAGR of 11.6% during 2022-2027. Low global warming potential (GWP) refrigerants are gaining traction globally owing to their less environmental impact and provide better energy performance. A wide range of low GWP refrigerants such as hydrocarbons, fluorocarbons, carbon dioxide, and ammonia is used in multiple applications. The low GWP refrigerants find their extensive use in the commercial refrigeration application where they help in preserving various types of food items, pharmaceuticals drugs, and several other products. The demand for commercial refrigeration is expanding with the increasing food production and drug formulation and this is expected to drive the market’s growth during the forecast period. For instance, as per the stats by Investment Promotion and Facilitation Agency, the food processing sector in India is projected to reach USD 470 billion by 2025. The flammability issue with low GWP refrigerants might hamper the market’s growth.

COVID-19 Impact

The low GWP refrigerants market was severely impacted due to the COVID-19 pandemic. The market came across challenges in the form of supply chain scarcity and idling of the factories which hampered the market’s growth. The market players enforced several measures to withstand the unprecedented circumstance amid the pandemic. The market witnessed decent growth towards the end of 2020 with increased food processing and drug formulation. Going forward, the low GWP refrigerants market is projected to witness significant demand owing to the expansion of commercial refrigeration systems.

Report Coverage

The “Low GWP Refrigerants Market Report - Forecast (2022-2027)”, by IndustryARC, covers an in-depth analysis of the following segments of the Low GWP Refrigerants Industry. 

By Type: Inorganics (Carbon Dioxide, Ammonia, Others (Air and Water)), Hydrocarbons, (Propane, Isobutene, Propene, Ethane, Methane, Others), Fluorocarbons (Hydrofluorocarbons (HFCs), Hydrofluoroolefins (HFOs))
By Application: Industrial Refrigeration, Commercial Refrigeration, and Residential Refrigeration
By Geography: North America (USA, Canada, Mexico), Europe (UK, Germany, France, Italy, Netherlands, Spain, Russia, Belgium, Rest of Europe), Asia Pacific (China, Japan, India, South Korea, Australia, and New Zealand, Indonesia, Taiwan, Malaysia, Rest of Asia Pacific), South America (Brazil, Argentina, Colombia and Rest of South America), and RoW (Middle East and Africa).

Key Takeaways:

• Hydrocarbons are leading the low GWP refrigerants market. This type of refrigerant provides an energy-efficient refrigeration system, making them a suitable choice in the market.
• The commercial refrigeration application is influencing the market’s growth. As per the 2021 report by the European Federation of Pharmaceutical Industries and Associations, medicines production in the European region stood at US$ 302,722 million in 2019 compared to US$ 286,053 million in the previous year.
• The European region is projected to witness the highest demand for low GWP refrigerants owing to regulations regarding fluorinated greenhouse gas (F-gas)/HFC. As per the data by European Environment Agency, incorporated the Kigali Amendment to the Montreal Protocol which aims to reduce fluorinated gas (F-gas) emissions.

Low GWP Refrigerants Market Segment Analysis - By Type

The hydrocarbons segment dominated the low GWP refrigerants market in 2021 and is growing at a CAGR of 12.3% during the forecast period. This type of low GWP refrigerant possesses robust thermodynamic properties and allows the cost-effective operation of refrigerating and air-conditioning systems. Owing to such excellent properties, market players and research organizations are focused on the higher use of hydrocarbons. For instance, as per the September 2021 journal by IntechOpen, the use of R600a hydrocarbon increased the refrigeration system’s coefficient of performance by 27.1% compared to R134a fluorocarbon. Such increasing use of hydrocarbons is expected to increase their demand in the market during the forecast period.

Low GWP Refrigerants Market Segment Analysis - By Application

The commercial refrigeration application dominated the low GWP refrigerants market in 2021 and is growing at a CAGR of 12.6% during the forecast period. A wide range of low GWP refrigerants such as hydrocarbons and fluorocarbons are used in large quantities in commercial refrigeration systems. The commercial refrigeration system is comprised of various applications such as cold preservation and safety system for food items, pharmaceutical drugs, and cold chain networks for commercial air conditioners. The commercial preservation application segment is expanding globally with increasing food production, drug formulation, and rising sales of air conditioners and this is expected to drive the market’s growth during the forecast period. For instance, In March 2021, World Bank approved a loan of USD 400 million to China for the China Food Safety Improvement Project. Similarly, according to the July 2020 stats by the United States National Library of Medicine, overall expenditure on the US pharmaceutical grew 5.4% in 2019 compared to the previous year. Such massive growth in the commercial refrigeration application is expected to increase the demand for low GWP refrigerants, in turn driving the market’s growth during the forecast period.

Low GWP Refrigerants Market Segment Analysis - By Geography

The European region held the largest share in the low GWP refrigerants market in 2021, up to 32%. The high demand for low GWP refrigerants is attributed to the F-gas regulations/HFC phase out plan. Hydrofluorocarbons (HFCs) account for the majority of fluorinated greenhouse gas emissions. Owing to such adverse impact of hydrofluorocarbons low GWP refrigerants, the European Union implements EU F-gas Regulation which aims to cut HFCs emissions in the EU by two thirds by 2030. Such regulations regarding greenhouse emissions from fluorinated gas in the region are expected to increase the demand for low GWP refrigerants during the forecast period.

Low GWP Refrigerants Market – Drivers

Expansion of commercial refrigeration applications is driving the market’s growth

Low GWP refrigerants such as hydrocarbons and fluorocarbons like hydrofluorocarbons and hydrofluoroolefins are used extensively in commercial refrigeration systems. The commercial refrigeration system boasts a diverse system that includes food preservation and safety, a cold chain network for pharmaceutical drugs, commercial air conditioners, and many other applications. The commercial refrigeration system is expanding globally with increasing food processing, and drug formulation, and this is expected to propel the market’s growth during the forecast period. For instance, according to the November 2020 stats by FoodDrinkEurope, European Union’s food and drink sector generate a turnover of USD 1.33 trillion and US$ 332.57 billion in value-added, making it European Union’s largest manufacturing industry. Similarly, as per the stats by Invest India, the export of ready to cook, ready to eat and ready to serve accounted for more than USD 2 billion in 2020-21. Such massive growth in the commercial refrigeration application is expected to increase the requirement for low GWP refrigerants, in turn driving the market’s growth during the forecast period.

Increasing demand for hydrocarbons is influencing the market’s growth

Hydrocarbons such as propane, isobutene, propene, among others, account for the highest use in different refrigeration systems ranging from industrial to commercial and residential refrigeration systems. These low GWP refrigerants come with robust properties such as robust thermodynamic properties, the ability to execute efficient refrigeration operations, and require a less energy intensive production process. Such excellent properties allow their higher use in the market. For instance, as per the May 2019 journal by the International Research Journal of Engineering and Technology (IRJET), hydrocarbon refrigerant was used in air conditioners and the result concluded that the cooling capacity of the refrigeration system is more compared to hydro-chlorofluorocarbons HCFC-22. Such increasing demand for hydrocarbons is expected to influence the market’s growth during the forecast period.

Low GWP Refrigerants Market – Challenges

The flammability issue with low GWP refrigerants might hamper the market’s growth

Low GWP refrigerants come with several robust properties such as less environmental impact and better energy performance, however they are associated with flammability issues which have been a challenge in the market and this might hamper the market’s growth during the forecast period. Owing to such flammability issues, various governing bodies regulate the implementation of low GWP refrigerants. The Air Conditioning, Heating, and Refrigeration Institute (AHRI) of the US regulate the use of low GWP refrigerants. According to the November 2019 report by AHRI, Class 3 refrigerants such as propane and butane have higher flammability and faster flame propagation. Such flammability issue of low GWP refrigerants might affect the market’s growth during the forecast period.

Low GWP Refrigerants Market Industry Outlook

Investment in R&D activities, acquisitions, product and technology launches are key strategies adopted by players in the Low GWP Refrigerants Market. Global Low GWP Refrigerants top 10 companies include:

1. Honeywell
2. Linde Group
3. Sinochem Group
4. Airgas Inc.
5. Engas Australasia
6. A-Gas
7. Harp International
8. Tazzetti
9. Chemours
10. Daikin Chemicals

Recent Developments

• In January 2022, Honeywell announced the launch of its new low GWP refrigerant, Solstice N71 (R-471A), for the supermarket industry.
• In December 2019, Daikin Chemicals announced the sales launch of its low GWP refrigerant Creard R-448A (R-448A) in Japan for industrial and commercial refrigeration.
• In February 2019, Chemours announced its plan to start the production of its new Opteon YF (HFO-1234yf) low global-warming-potential refrigerant at its Corpus Christi manufacturing plant in Texas.

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