Secondary Refrigerants Market Overview
The secondary refrigerants market size is forecasted to reach US$760.3 million by 2027 after growing at a CAGR of 6.6% during 2022-2027. Secondary refrigerants are liquids that assist in sensible heat transfer from the substance being cooled to a heat exchanger where the transferred heat is absorbed by a primary refrigerant. A wide range of secondary refrigerants such as salt brines, calcium chloride brine, carbon dioxide, among others find their high uses in multiple end-use applications. Secondary refrigerants are an integral element used in air conditioning for providing freeze protection. The demand for the air conditioner is increasing owing to the soaring temperature and humidity levels globally and this will drive the growth of the market in the forecast period. For instance, as per the Federation of Indian Chambers of Commerce & Industry report, in January 2021, Panasonic India planned to double its residential air conditioning business in the next three years. Furthermore, secondary refrigerants find extensive use in large process refrigeration systems in the oil and gas industries. The oil and gas sector expanding globally and this will drive the growth of the market in the forecast period. For instance, according to the January 2020 data by the International Energy Agency, biofuel production is expected to increase fourfold from around 2 mboe/d in current times to almost 8 mboe/d by 2040. The high investment in the initial stage might hamper the growth of the market.
COVID-19 Impact
The secondary refrigerants market was moderately affected by the COVID-19 pandemic. Disturbances in the supply chain and idling of factories were the key challenges faced by the market amid the pandemic. As per the COVID-19 pandemic response data by Hydratech, the company witnessed a weak supply chain during the pandemic. The severity of COVID-19 forced market players to adopt new working strategies to maintain a standard operation of their businesses. SRS Frigadon closed its office and was able to continue its business normally. Going forward, the market is projected to witness significant demand owing to the increase in demand for secondary refrigerants in air conditioning applications and the oil & gas industry.
Secondary Refrigerants Market – By Type Glycol segment dominated the secondary refrigerants market in 2021 and is growing at a CAGR of 6.9% in the forecast period. This type of secondary refrigerant offers frost protection for cooling systems and closed-loop refrigeration systems. Ethylene and propylene-based water solutions comprise the glycol segment. These glycol solutions have low toxicity and are less corrosive which makes them a robust choice in the market. Owing to these superior qualities, market players and research organizations are utilizing glycols in high quantities as secondary refrigerants. For instance, as per the July 2019 journal by Multidisciplinary Digital Publishing Institute, heat transfer in an active barocaloric cooling system was enhanced using ethylene-glycol based nanofluids as secondary refrigerants. Such growing uses of glycol refrigerants will increase their demand in the market during the forecast period. The salt brines segment which involves sodium chloride brine and calcium chloride brine will witness significant demand in the forecast period.
Secondary Refrigerants Market – By Application
Air Conditioning application dominated the secondary refrigerants market in 2021 and is growing at a CAGR of 7.2% in the forecast period. The high demand for secondary refrigerants in this application is attributed to the rising temperature and humid levels globally, leading to a higher development of air conditioning applications. As per the February 2021 Global Strategic Studies Institute Monthly Report by Mitsui Group, the demand for commercial air conditioners is increasing in the North American region. Similarly, as per the September 2020 report by India Brand Equity Foundation, demand for air conditioners increased in 2020 with the market of air conditioners reaching an estimated amount of US$ 2.56 billion. Such high growth in air conditioning application will increase the requirement for secondary refrigerants for providing freeze protection and this will drive the growth of the market in the forecast period. The industrial refrigeration application is projected to witness significant demand in the forecast period.
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Secondary Refrigerants Market – By Geography
The Asia-Pacific region held the largest market in the secondary refrigerants market with a market share of up to 32%. The high demand for secondary refrigerants is attributed to the expanding air conditioners in the region. For instance, as per the June 2019 report by International Energy Agency, AC ownership in China is projected to touch as much as 85% by 2030. Similarly, as per the data by Invest India, in 2021, 26 applicants have been selected as beneficiaries under the Production Linked Incentive scheme for the manufacturing of air conditioners in India. Such massive growth in the region’s air conditioners will stimulate the higher uses of secondary refrigerants for offering freeze protection and this will contribute to the market’s growth in the forecast period.
Secondary Refrigerants Market Drivers
Expanding oil and gas industry will drive the market’s growth Secondary refrigerants are a key element in the oil and gas industry as they are implemented in large process refrigeration systems in this sector. The oil and gas sector expanding globally with the increase in energy and this will drive the market’s growth in the forecast period. For instance, as per the report by India Brand Equity Foundation, natural gas consumption in India is anticipated to touch 143.08 million tonnes by 2040. Similarly, according to the stats by the Employment and Income Assistance Program, US Liquefied natural gas export is anticipated to be the largest in the world in 2022 as two new Liquefied natural gas liquefaction units, Sabine Pass LNG and Calcasieu Pass LNG will be placed into service in 2022.
Increasing demand for air conditioners will drive the market’s growth Secondary refrigerants such as ethylene glycol and calcium chloride brine find their massive uses in air conditioners as they provide freeze protection systems and assist in other cooling applications. The demand for air conditioners is increasing globally and this will drive eth market’s growth in the forecast period. For instance, as per the data by Invest India, the Indian air conditioners market is projected to increase to US$ 16.5 million units by FY25 which was US$ 6.5 million in FY19. Similarly, as per the January 2019 data by the World Economic Forum, global air conditioner stock is projected to reach 5.6 billion by 2050 which was 1.6 billion in 2019. Such high demand for air conditioners globally will augment the higher uses of secondary refrigerants and this will drive the market’s growth in the forecast period.
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Secondary Refrigerants Market Challenges
High investment in the initial stage might hamper the market’s growth The investment process for secondary refrigerants in multiple industries is high and this has been a challenge in the secondary refrigerants market which might affect the growth of the market in the forecast period. For instance, secondary refrigerants are an integral part of food retail outlets, especially in supermarkets as refrigeration is essential for the preservation of food. Supermarkets use carbon dioxide as a refrigerant for its improved efficiency but the high cost associated with carbon dioxide makes the investment high. As per the September 2020 report by United Nations Industrial Development Organization, carbon dioxide requires a high level of technical expertise for design, commissioning, and maintenance which makes the initial investment related to the refrigerant in supermarkets high. Such high investment involved with secondary refrigerants might affect the growth of the market.
Secondary Refrigerants Industry Outlook
Investment in R&D activities, acquisitions, product and technology launches are key strategies adopted by players in the secondary refrigerants market. Major players in the secondary refrigerants market include:
A Gas International
Tazzetti SPA
Arteco Coolants
Temper Technology AB
SRS Frigadon
Hydratech
Dynalene
Environmental Process Systems
Gas Servei
Climalife
Linde Group
Clariant AG
Dow Chemical Company
Key Takeaways:
Glycol segment is leading the secondary refrigerant market. The ability of glycols to provide superior freeze protection makes it a desirable choice in the market.
The air conditioning application will drive the growth of the market. As per the July 2020 Cooling Emissions and Policy Synthesis Report by the United Nations Environment Programme (UNEP) and the International Energy Agency (IEA), strict actions to make air conditioning systems more effective could reduce 210 to 460 billion metric tonnes of carbon dioxide over the next four decades.
The Asia-Pacific region is projected to witness the highest demand for secondary refrigerants in the forecast period.
As per the June 2019 report by International Energy Agency, China is the leading producer of air conditioners, accounting for 70% of the world’s room air conditioners and covering about 22% of installed cooling capacity globally.
Recent Developments
In September 2021, Arteco launched its new coolant named Freecor EV Micro 10 which will be used in fuel cells of vehicles, marine, and stationary equipment. This new coolant comes with frost protection and corrosion protection. In July 2021, Global safety equipment manufacturer MSA Safety Incorporated has completed its acquisition of Bacharach, Inc. in a transaction valued at $337 million. Based in New Kensington, Pa., Bacharach is a leader in gas detection technologies used in the heating, ventilation, air conditioning and refrigeration (HVAC-R) markets, with annual revenue of approximately $70 million.
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