Cryogenic Fuels Market Expected to Reach $188.7 Billion by 2030

According to a new report published by Allied Market Research, titled, “Cryogenic Fuels Market: Global Opportunity Analysis and Industry Forecast, 2021–2030,” the global cryogenic fuels market was valued at $105.6 billion in 2020, and is projected to reach $188.7 billion by 2030, growing at a CAGR of 6.1% from 2021 to 2030.

Cryogenic fuels are in the gaseous form when they are at normal atmospheric conditions. These gases are cooled till they reach boiling point so as to store them as low-temperature liquids. Liquid hydrogen, LNG, liquid nitrogen, liquid helium, liquid neon, and argon are some of the prominent cryogenic fuels. Cryogenic fuels are in gaseous form when they are in ambient condition. These gases are cooled to their boiling point to store as liquids for future use.

Demand for cryogenic fuels has witnessed tremendous growth driven by increasing penetration in industries such as energy, manufacturing, aerospace, biomedical & healthcare, and chemical. All industry players are investing heavily to find new commercial avenues for their product segments via strategic production and business expansion. Some of the major factors that drive the demand for cryogenic fuels include growing usage of cryogenic fuels in the development of carbon capture technologies, increasing number of M&A activities in the industrial gases industry, and the development of the rapid surface chilling process for the food industry. However, high initial investment for setting up cryogenic plant for large-scale production of cryogenic fuel is expected to hamper the growth of the cryogenic fuels market during the forecast period. Furthermore, rise in space and satellite missions bring opportunities for cryogenic fuel is expected to provide growth opportunities for the cryogenic fuels market during the forecast period.

By type, the global cryogenic fuels market size is studied across liquid nitrogen, liquid air, liquid helium, liquid neon, liquid hydrogen, and liquefied natural gas (LNG). The liquid air segment accounted for the largest market share in 2020, owing to surge in its demand from aerospace, medical industry, and welding industry. The liquid air segment dominated the global cryogenic fuels market with more than two-fifths of the total market share in 2020.

By end-use industry, the global cryogenic fuels market is studied across energy, manufacturing, aerospace, biomedical & healthcare, chemical, and others. The manufacturing segment emerged as the leader in 2020, owing to growing consumption of cryogenic fuels from automotive and steel industry. The manufacturing segment dominated the global cryogenic fuels market with more than half of the total market share in 2020.

Region-wise, the global cryogenic fuels market is studied across North America, Europe, Asia-Pacific, and LAMEA. Asia-Pacific accounted for a major cryogenic fuels market share in 2020, and dominated the global market with more than one-third of the total market share in 2020.

The major players studied and profiled in the global cryogenic fuels market are Air Liquide, Air Products & Chemicals, Air Water, Inc., Gulf Cryo, Maine Oxy, Messer Group GmbH, Mitsubishi Chemical Holdings (Taiyo Nippon Sanso), Narco Inc., Linde Plc (Praxair Technology, Inc.), and SOL Group.

COVID-19 analysis:

• According to the International Monetary Fund (IMF), owing to the outbreak of novel coronavirus (COVID-19), the global economy shrunk by 3.0% in 2020. Many countries are under strict lockdowns, which have forced several sectors to shut down their operations. This has halted manufacturing activities and reduced the demand and production of cryogenic fuels.
• According to the United Nations Industrial Development Organization (UNIDO), the Micro, Small & Medium Enterprises (MSME) sector across developing economies, such as India, has been worst affected due to the COVID-19 outbreak and the lockdown imposed thereafter. This is expected to decline the demand for cryogenic fuels from various end-use industries such as building & construction, automotive, chemicals, and aerospace. In addition, in the second half of 2020, some countries started to lift restrictions and gradually start business operations in various sectors. Even with the gradual lifting of the lockdown, it is expected to be challenging for the manufacturing sector to get back to normal working conditions. This is expected to subsequently affect the cryogenic fuels market growth in the coming years.
• According to the UNIDO, 30.0%–70.0% of pre-COVID-19 workforce of various manufacturing industries, such as automotive, steel, and electrical & electronics, have migrated back to their hometowns due to uncertainties and loss of income during the lockdown. This non-availability or less availability of workforce is expected to directly affect production activities of these industries, thereby resulting in decline in demand for cryogenic fuels. This is expected to decline growth of the market during the forecast period. 
• The COVID-19 pandemic outbreak is having a huge impact on the automotive and chemical industry. There is a delay in imports and exports of chemical items due to the import-export restriction by the governments in various regions. Automotive manufacturing has been disruptively halted, leading to significant losses in the automobile sector as a whole. According to the European Association of Car Manufacturers, demand for new commercial vehicles across the EU remained low in June 2020 (-20.3%), although the rate of decline slowed compared to April and May. Double-digit percentage decreases were recorded last month by three of the four largest markets in the region: Germany (-30.5 percent), Spain (-24.2 percent), and Italy (-12.8 percent), while France recorded a small increase (+2.2 percent). With the decrease in automotive production, the demand for liquid nitrogen has significantly fallen, which is having a major impact on the demand of liquid nitrogen.
• The demand for liquid air was negatively impacted by COVID-19 in 2020. The construction works were on temporary halt during the lockdown, thus led to a decrease in the consumption of liquid air like argon and hydrogen, which are used for welding purposes while construction, thus negatively impacted the market’s growth. However, the demand for oxygen for resuscitation and inhalation therapy has been increased from the medical industry during the pandemic situation, which stimulates the market’s growth.
• Due to the COVID-19 outbreak, the aerospace industry took a severe blow, which resulted in the contraction of the aerospace industry in recent times, which negatively affected the growth prospects of liquid helium in aerospace applications. Moreover, aircraft manufacturing companies have also been witnessing a decline in the number of orders compared to previous years, with many aviation companies cutting down on their previous orders. For instance, in July 2020, Avolon canceled its additional 27 Boeing 737 MAX planes order after it already canceled about 75 of the jet orders in April, with the COVID-19 pandemic affecting its operations. Such trends may impact the new orders during the short and medium term as a result of changes in aviation companies’ investment plans. Similarly, the slowing down of R&D activities due to the economic slowdown and lockdowns due to the COVID 19 outbreak has negatively impacted the growth of the electronics and semiconductor industry in the short term, and thereby, the demand for liquid helium has been affected adversely.
• The global crisis affected almost every industry’s production, demand and supply chain. The liquid neon gas market was not immune to it. The semiconductor industry which requires liquid neon for its processing has also taken a hit due to the pandemic. The work from home is expected to promote smart home products and thus in this field, the demand is going to surge. In addition, amid lockdown there will be decrease in production of original equipment manufacturing resulting in drop in demand for liquid neon. Furthermore, there is expected to be drop in demand for mobile phones and consumer electronics, due to loss of income and stay-at-home orders. Thus, the production of these products and hence the consumption of liquid neon for processing will be significantly affected.

Key findings of the study

• In 2020, Asia-Pacific dominated the global cryogenic fuels market with around 37.0% share, in terms of revenue. In addition, it is also projected to grow at the highest CAGR of 6.6% in terms of value.
• The liquid air segment dominated the global cryogenic fuels market with around 41.2% of the share in terms of revenue. 
• The liquid hydrogen segment is projected to grow at the highest CAGR of 6.6% in terms of revenue.
• The manufacturing segment dominated the global cryogenic fuels market with around 53.1% of the share in terms of revenue. In addition, it is also projected to grow at the highest CAGR of 6.5% in terms of value.