Things are getting a bit furry in such times! The climate change concerns and environmental regulations; ozone layer challenges and GWP values, are containing global refrigerants market growth. The growing concern pertains to ecology dangers caused by HCFC refrigerants, which triggers their phasing out the world over. This intensifies the opportunity for alternative refrigerant blends and variants growth. Market players are becoming more attentive to climate friendly atmosphere. Consequently, the regulations to go ‘Green’ accelerate market demand for natural refrigerants. More likely, energy efficiency, cost factor and eco-friendly nature of hydrocarbons will influence all-inclusive refrigerants’ demand in the near future. Presently, with easing lockdown, refrigerant market will continue its moderate growth in the post-lockdown ‘New Normal’ times.
Trends driving refrigerants market growth
In essence, emergence of energy-efficient systems, consumer electronics growth, rising demand for domestic air conditioning and demand for energy-efficient technology as well, are among few trends driving the refrigerants global market. All the more, global warming awareness is boosting demand for eco-friendly variants.
The enormity of refrigeration market trend lies in expansions of cold chain network. The increase in requirement of deep freezers and refrigerators by cold chain market also augments demand for refrigerants in the food and beverage industry. Air conditioning industry, automotive air conditioning, split ACs, as well as increasing use of VRF systems are the latest trends contributing to the growth of this market. Featuring in COVID-19 times – food retail chains, online markets coupled with rise in consumption of packaged and frozen foods etc., are other upcoming trends boosting refrigerants demand. The surge in manufacturing activity and demand for improved maintenance of industrial equipment factors will further enlarge the market.
Countries phasing out HCFCs are concreting opportunity to create demand for HFCs. The chief advantage of HFCs over chlorofluorocarbons is – they are non-reactive with environment even upon direct exposure; are non-flammable, recyclable, energy efficient, less toxic, and chemically stable. Halocarbons, specifically fluorocarbon refrigerants commercialised as ‘Freons’, so far dominated the market followed by hydrocarbons. The inorganic refrigerant and HFOs occupied lesser volume by percentage. Nonetheless, increasing demand for ‘bio-based refrigerants’ seems plausible for market growth in the future.
So to say, the refrigerant usage should have safety, health and protection standards for living beings. Eco-friendly refrigerants such as low GWP HFOs R-1234yf, ammonia, R-1234ze, and hydrocarbons are replacing chlorofluorocarbon applications. OE car manufacturers moving to R-1234yf with GWP four value refrigerant in their vehicle AC systems. When designing a refrigeration system, ammonia, hydrocarbons, carbon dioxide, air (as in air-conditioning of aircraft), and even water (in applications above freezing point) are emerging among the several refrigerants from which to choose from. The safe use of hydrocarbons rests in system that requires smaller charge. For instance it’s the dominant refrigerant for refrigerators, ice and vending machines. Hydrocarbons, like isobutane (R600a) and propane (R290) are a few of the eco-friendly refrigerants with zero ODP, low GWP benefits and stated to be highly efficient. “Earth friendly refrigerants, increased efficiency and reliability of refrigeration systems and equipment through the length and breadth of the cold chain network must continue to be a priority among the technical community. Energy efficient systems will benefit the world by reducing the amount of CO2 produced, which reduces the potential for climate change and the amount of energy consumed – thereby positively impacting both the environmental and economic costs associated with the refrigeration industry,” comments, Ravichandran Purushothaman, President, Danfoss India on ‘World Refrigeration Day’.
Demand of refrigerants in emerging economies
Today, eco-friendly refrigerants are used across the world penetrating Asia-Pacific, Europe, Latin America, Middle East & Africa and North America regions. Asia Pacific is serving most of the demand of refrigerants for this region’s rapidly growing construction, infrastructure, automotive industries, rising population and disposable income. The market for refrigerants during forecast 2020-2025 is expected to grow at a CAGR of > 3% as per Mordor Intelligence report. The global ‘natural refrigerants’ market is projected to reach USD 2.88 billion by 2027 according to Reports and Data research agency. The market is estimated to be powered by the increasing demand for natural refrigerants concerning the adverse effects on environment created by the flux of HCFC and HFC based refrigerants. However, owing to unsettling pandemic, hurly-burly international trade, and unfavourable geopolitical affairs, the growth rate may slow down or speed up considering improved conditions in the future.
These days, the consumer’s changing preference has put focus on health and hygienic food products, including organics foods that require cold storages. Packaged frozen foods are also becoming popular. And, the refrigeration appliances are becoming household necessities because of usage of ready-to-eat packed food, thus lending to market growth. Digital emergence and industrialization in economies such as India, China and Japan have led to the establishment of a large number of data centers fuelling demand for refrigerants in this region consistently.
Manufacturers operating in market
As known, global refrigerants market is consolidated. The top five major players accounting for a decent share in the market comprise, Honeywell International Inc., The Chemours Company, Mexichem SAB de CV, Arkema Group and The Linde Group. Other key players include Daikin Industries Ltd, Sinochem Group Co. Ltd, Messer Group, and Navin Fluorine International Limited, among others in the highly fragmented market. Many of these players are engaged in extensive R&D and developing innovative refrigerants, as regulations & compliances set by governing bodies around the world obligates the discontinuation of many harmful refrigerants.
Prioritizing the natural refrigerants will benefit the direct emissions saving and is the best way forward. The norms require vendors working on mixtures of gases to focus upon energy efficiency, climate change and health of general public worldwide as the prime most concern in post-pandemic times.
“As the world faces a reset moment from the COVID-19 pandemic, it’s clear that cooling for all is necessary to recover better. We must accelerate access to energy-efficient cooling solutions that will protect people against the immediate public health and safety concerns caused by the pandemic, as well as support long-term economic recovery,”says Damilola Ogunbiyi, CEO and Special Representative of UN Secretary General for Sustainable Energy for All and Co-Chair of UN-Energy.
Furthermore, UNIDO also is currently developing a modelling tool that allows manufacturers to estimate the cooling and energy efficiency of refrigeration systems in different setups during the design phase, for the domestic and commercial refrigerator manufacturing sector as an environmental initiative.
Reduction of GHG emissions
Comprehensively, selection of suitable refrigerant has become one of the most important concerns as chemical refrigerants are potent greenhouse gases that contribute to climate change. Refrigerant discharge always happens: be it during maintenance, accidents or leakages. EU has enacted legislation evolving with the climate and energy strategy, also known as the ‘20-20-20 targets’ which includes a 20% reduction in greenhouse gas emissions by the year 2020. Desire to reduce GHG emissions has prompted development and application of alternative system designs, which employ secondary refrigerants as well as natural refrigerants such as CO2, ammonia and hydrocarbons. Underwriters Laboratories (UL) test protocols establish safety standards in the unlikely event of a refrigerant leak and most likely, it would not certify a refrigerant they deemed dangerous.
A new ITU standard- L.1470 highlights, that compliance with ‘Paris Agreement’ will require Information and Communication Technology (ICT) industry to reduce GHG emissions by 45% from 2020 to 2030, to meet the UNFCCC Paris Agreement’s goal – of limiting global warming to 1.50C above pre-industrial levels. Signatories to ‘Kigali Amendment’, including India, have agreed to reduce the production and use of climate-warming refrigerant gases which have potential to avoid as much as 0.40C of global warming by 2100 through this step alone.
Conclusively, the outlook concerns that bad effects of specific refrigerants to the environment is severe. Hence, it seems that growing awareness among manufacturers will fall for developing energy-efficient cooling systems, coursing the growth of eco-friendly refrigerants. The digital technologies such as IoTs, machine learning and autonomous mobile robots continue to advance in the refrigeration systems for monitoring and control, generating data and graphs for better analysis, and customising refrigerant variants, suitable to refrigeration systems. Clearly, the cleaner future majorly belongs to hydrocarbon systems.
Inclusive of energy efficient approach, eco-friendly variant happens to be a major factor driving growth of global refrigerants bazaar, continuing its moderate growth with easing lockdown. Amid, all said above and beyond, the emergence from pandemic indulgence together with climate friendly focus should lead to a different and better new normal world to propel growth all around.