Natural Refrigerant Market Expected to Reach $2.7 Billion by 2032—Allied Market Research

According to a new report published by Allied Market Research, titled, “Natural Refrigerant Market," The natural refrigerant market was valued at $1.5 billion in 2022, and is estimated to reach $2.7 billion by 2032, growing at a CAGR of 6.2% from 2023 to 2032.

Natural refrigerant refers to a substance that is inherently occurring in nature and possesses favorable thermodynamic properties for use in refrigeration and cooling applications. Carbon dioxide (CO2), ammonia (NH3), and hydrocarbons such as propane (R290) and butane (R600) exhibit low or zero ozone depletion potential (ODP) and negligible global warming potential (GWP). Natural refrigerants are environmentally friendly alternatives to synthetic refrigerants, offering energy efficiency and sustainability while minimizing the adverse impacts of climate change and ozone layer depletion.

A surge in demand for natural refrigerants and a rise in environmental consciousness among individuals are the primary factors that drive the growth of the natural refrigerants market. As natural refrigerants are sustainable, they have 0% impact on global warming and do not deplete the ozone layer, thus boosting their demand for the betterment of the future. Furthermore, the increase in environmental consciousness and the high affordability of natural refrigerants act as the key driving factors of the global market.

Natural refrigerants help extend the life of refrigeration and air conditioning units because they are more efficient and less harmful to the environment. Natural refrigerants are more durable than synthetic refrigerants. Natural refrigerants are healthier for the environment because they have zero potential for ozone depletion and negligible potential for global warming. Artificial refrigerants pose an environmental hazard due to their high ozone depletion and global warming opportunities. Nonetheless, rising demand for natural refrigerants and rising environmental consciousness among individuals have increased the demand for Natural Refrigerants.

Frozen food is gaining popularity among working women and families with increasing spending abilities. Preservation of food through freezing retains the quality of food products for long storage periods. As an approach to the long-term preservation of vegetables and fruits, freezing is considered superior to dehydration and canning of food & beverages to retain the nutritive properties and sensory attributes. In recent years, owing to changing consumer profiles, the frozen food & beverages industry has witnessed a significant change. The rapid increase in the number of working women and the reduction in the overall family size globally has resulted in a decrease in time spent cooking/preparing food. This has further led to an increase in the variability of frozen or ready-to-eat food and dairy products.

In addition, the global frozen food industry is expanding exponentially to cater to the increasing demand for frozen food and dairy products and their variability. Harmful and relatively less efficient fluorocarbon refrigerants are being replaced by ammonia, carbon dioxide, hydrocarbons, and other natural refrigerants by increased industry players. Approximately two-thirds of multinational supermarkets use natural refrigerants. Thus, surge in demand for frozen food and dairy products along with an increase in the demand for a variety of frozen food products is a key factor that boosts the market growth.

However, natural refrigerants present specific challenges and obstacles, such as the fact that hydrocarbon refrigerants are exceedingly flammable, necessitating additional safety measures such as gas detectors and safety instructions for personnel. High-pressure carbon dioxide refrigerants operate. Refrigerants containing ammonia are toxic. Ammonia's alkalinity is exceedingly corrosive, necessitating careful consideration of material compatibility for components used in applications. However, a number of obstacles and its toxicity have restrained the growth of the natural refrigerants market.

In humid conditions, natural refrigerants perform better than artificial refrigerants. Natural refrigerants enable refrigeration units and air conditioners to operate more efficiently and cost-effectively. Natural refrigerants offer numerous advantages, including a 38% reduction in heating and cooling costs. For instance, hydrocarbon refrigerants reduce the cost of repairs and maintenance for air conditioning and refrigeration systems. Hydrocarbon refrigerants are more affordable than their synthetic counterparts. In addition, hydrocarbon refrigerants are more energy-efficient, resulting in a 17–38% reduction in energy consumption costs, which offers manufacturers more opportunities to save money.

The natural refrigerant market is segmented on the basis of gas, application, and region. By gas, the market is divided into carbon dioxide, ammonia, hydrocarbons, and others. On the basis of application, it is categorized as refrigerators, air conditioning systems, and others. Region-wise, the market is studied across North America, Europe, Asia-Pacific, and LAMEA.

On the basis of gas, the natural refrigerant market is categorized into carbon dioxide, ammonia, hydrocarbons, and others. Ammonia is projected to be the fastest-growing segment and carbon dioxide has garnered the highest share in the natural refrigerants market.

On the basis of application, the natural refrigerant market is classified into refrigerators, air conditioning systems, and others. Refrigerators are projected to be the fastest-growing segment and have garnered the highest share in the natural refrigerants market.

The major players operating in the global natural refrigerant market are Danfoss, Linde Plc, A-Gas International Ltd., Daikin Industries Ltd., Evonik Industries AG, AGC Inc., Air Liquide, HyChill Australia Pty Ltd., Johnson Controls, Puyang Zhongwei Fine Chemical Co., Ltd.

Key findings of the study

• On the basis of gas, the ammonia segment is expected to grow at a CAGR of 6.8%, in terms of revenue, during the forecast period.
• Depending on the application, the refrigerators segment is expected to grow at a CAGR of 6.4%, in terms of revenue, during the forecast period.
• Region-wise, Europe garnered a major share in 2022 in terms of revenue.