Refrigeration Oil Market Expected to Reach $2.2 Billion by 2031—Allied Market Research

According to a new report published by Allied Market Research, titled, “Refrigeration Oil Market," The refrigeration oil market was valued at $1.4 billion in 2021, and is estimated to reach $2.2 billion by 2031, growing at a CAGR of 4.7% from 2022 to 2031.

The refrigeration oils are type of industrial oils that are used as hydraulic control, functional fluid, and lubricating oil in refrigeration compressors under the influence of the refrigerant.

Paraffin-based mineral refrigeration oils are minimally miscible with ammonia refrigerant that further ensures and limits oil thinning and reduces oil carry-over in the compressors. Mineral-based refrigeration oils have low volatility, which further reduces oil consumption (fewer oil top-ups) and minimizes oil thinning from fractionation.

In addition, minimal Brookfield viscosity further contributes towards improved oil flow at cryogenic temperature and oil return from evaporator, which contributes towards the growth of the global market. In addition, paraffin-based refrigeration oils help surface protection of compressors, which in turn ensures longevity of the equipment and cuts down maintenance cost. Viscosity index is crucial for safe and proper lubrication of compressors. Refrigeration oil tend to have high viscosity index, making them the best choice for lubrication of compressors. In addition, mineral refrigeration oil compatibility contributes to oil separator efficiency, which ensures low miscibility of refrigeration oil with ammonia refrigerant. All these factors have escalated the demand for mineral oil and is anticipated to offer new growth opportunities during the forecast period.

Several environmental risks associated with use of refrigeration oils hamper the market growth. For instance, during disposal of used refrigeration oil, the risk of contamination associated with water bodies negatively impacts aquatic animals.

In addition, emission risk associated with use of refrigeration oil also hampers the market growth. Refrigeration oil tend to cause ozone depletion and contribute to global warming. Refrigeration oils are mainly used in air conditioning and refrigeration systems.

However, the air conditioning and refrigeration systems tend to impact negatively on stratospheric ozone owing to use of ozone-depleting refrigerants. This further contributes towards global warming owing release of refrigerants and from emission of greenhouse gases (GHGs) for associated energy use. All these factors tend to negatively impact the demand and use for refrigeration oil in air conditioning and refrigeration systems. This further tends to hamper the growth of the global market.

Refrigeration oils offer high thermal and oxidation stability that in turn improves shelf life of other industrial oil used in compressors. Moreover, compressors and other heat pumps require regular draining of oils and other refrigerants used. However, oxidation capability of refrigeration oils minimizes drain intervals and routine maintenance cost. In addition, high viscosity index of refrigeration oil further minimizes fluid temperature that in turn helps to reduce the deposition of wax content on compressors and its associated parts, ensuring smooth working of the equipment and its parts. Minimal traction co-efficient factor is vital for ensuring improved system efficiency and reduced power consumption.

Refrigeration oil has low traction co-efficient factor, making it widely used in compressors, which drives the growth of the global market. Some refrigeration oil poses environmental issues owing to need for periodic drain and replace the oil. Thus, key-players in the refrigeration oil market are testing environment-friendly oils, intended to be used across industrial compressor.

For instance, highly-refined mineral oil are type of refrigeration oils that are gaining importance over fossil-fuel-based refrigeration oils. All these factors drive the growth of the global market. The refrigeration oil market is segmented on the basis of oil type, application, and region.

By oil type, the market is segregated into synthetic and mineral. The synthetic segment dominated the global market in terms of revenue in 2021, with over 53% of the total share. Synthetic refrigeration oil are widely used in refrigeration compressors and heat pumps. Industrial compressors and other HVAC systems majorly pose risk of shaft leakage.

However, several industrial sealants are used to minimize the risk of shaft leakage. Despite using sealants and other industrial oil, the shaft leakage in heat pumps is still a concern to be considered. Refrigerants tend to form film over these industrial pumps and other compressors. However, formation of thin layer leads to shaft leakage in these equipment. Solubility of synthetic industrial oils with refrigerants is low, which in turn results in formation of thick refrigerant film and reduces shaft leakage significantly. Conventional mineral oil used in compressors increases the risk of light end stripping that further increases maintenance cost of the equipment. High stability and low volatility of refrigeration oil significantly reduces the light end stripping, which drives the demand for synthetic refrigeration oil.

By application, the global refrigeration oil market is segmented into refrigerators & freezers, air conditioner, automotive air conditioning system, and others. The refrigerators and freezers application dominated the global market in terms of revenue in 2021, with over 49% of the total share. Polyol ester (POE) refrigeration oil is widely used in refrigerators systems. In addition, POE refrigeration oil is compatible with HFC refrigerants.

Refrigeration oil is crucial and widely used in refrigerators to ensure proper lubrication of compressor that produces cold air. Oil thickness is crucial and determines efficiency of the compressors used in refrigerators and freezer. In addition, high oil thickness on compressor metal parts increases wear and tear, thereby increasing maintenance cost. Refrigerant oil, also known as refrigeration oil is a high temperature formulation that is specifically designed and widely used to reduce formation of high oil thickness. This factor has escalated the demand for refrigeration oil in freezers and refrigerator compressors.

Region-wise, the refrigeration oil market is analyzed across North America, Europe, Asia-Pacific, and LAMEA. The Asia-Pacific refrigeration oil market is projected to grow at the highest CAGR during the forecast period. Refrigeration oil is crucial and widely used in refrigerators to ensure proper lubrication of compressor that produces cold air. Other applications of refrigeration oil include, low temperature evaporators, marine refrigeration systems, and industrial heat pumps. Industrial refrigeration compressors use ammonia as refrigerating fluid.

Use of refrigeration oil along with ammonia ensures high performance of these industrial refrigeration compressors. Polyalphaolefin (PAO) and synthetic alkylbenzene refrigeration oils offer resistance to thermal/oxidative degradation, making them viable to be used with low temperature evaporators and marine refrigeration systems. Marine refrigeration systems face sludge and deposit formation that further escalates the risk of valve or filter plugging. Refrigeration oil tend to minimize sludge and wax deposit formation, thereby minimizing valve or filter plugging in the marine refrigeration systems. Mineral naphthenic oils are substitute products used in industrial heat pumps.

Key players operating in the global refrigeration oil market include Exxon Mobil Corporation, HP Lubricants, Castrol Limited, Shell plc, ENEOS Corporation, ADDINOL, FUCHS, Phillips 66 Company, BP Lubricants Pvt. Ltd., Lubriplate Lubricants Company, Freudenberg Group, and Whitmore Manufacturing LLC.

COVID-19 analysis

The refrigeration oil market is expected to recover rapidly post COVID-19 situation due to its increased dependency over automotive, aerospace, marine, and other sectors. For instance, according to an article published by Financial Express, the Indian automotive industry registered a growth of 15% in 2021, and is expected to grow at an average annual growth rate of 18.6% by 2025. This is expected to enhance the performance of the refrigeration oil market post- COVID-19 scenario.

Key findings of the study

• By oil type, the synthetic oil segment is estimated to display the highest growth rate, in terms of revenue, registering a CAGR of 4.9% from 2022 to 2031.
• By application, the air conditioner segment is estimated to display the highest growth rate, in terms of revenue, registering a CAGR of 5.0% from 2022 to 2031.
• Asia-Pacific garnered the highest share of 41% in 2021, in terms of revenue, growing at a CAGR of 5.1%