U.S. Natural Refrigerants Market Size, Share & COVID-19 Impact Analysis, By Type (Hydrocarbons, Ammonia, and Carbon Dioxide), By End-Use Industry (Industrial, Commercial, and Domestic), and Forecast, 2023-2030

The U.S. natural refrigerants market size was worth USD 259.8 million in 2022 and is projected to grow at a CAGR of 6.5% during the forecast period.

Natural refrigerants are produced by biochemical processes that use natural resources. Most products used in Heating, Ventilation, Air Conditioning, and Refrigeration (HVACR) applications are hydrocarbons such as propylene (R-1270), propane (R-290), and isobutene (R-600a); ammonia (R-717, NH3), and carbon dioxide (R-744, CO2), while other refrigerants include air (R-729) and water (R-718, H2O).

The U.S. natural refrigerants market is driven mainly by the increasing demand for natural type of refrigerants with good energy efficiency and minimal environmental effects. Natural refrigerants are becoming increasingly popular as an alternative to synthetic refrigerants, such as chlorofluorocarbons (CFCs) and hydrofluorocarbons (HFCs), known to have significant potential for global warming and ozone depletion. The rising concern about global warming and other environmental issues are key factors driving the U.S. natural refrigerants market growth.

The COVID-19 outbreak had a detrimental impact on every aspect of the global economy, and this industry is no exception. Natural refrigerant manufacturing companies and ammonia and hydrocarbon manufacturing faced crippled demand and stalled business activities. Companies operating in the natural refrigerants manufacturing sector had to adopt additional safety measures and maintain appropriate COVID-19 behavior to safeguard their employees.

LATEST TRENDS

Implementation of Stringent Environmental Regulations to Favor Market Growth

According to the U.S. Environmental Protection Agency (EPA), Ozone-Depleting Substances (ODS) are regulated in the U.S. as Class I or II controlled substances. Class I substances, such as halons and chlorofluorocarbons (CFCs), have a higher ozone-depleting potential and have been phased out in the U.S., with a few exceptions, meaning that no one can import or manufacture Class I substances. Class II substances are fluorochlorinated hydrocarbons (HCFCs), transitional substitutes for many Class I substances. The new production and import of most HCFCs was discontinued in 2020. Such regulations are anticipated to drive the market expansion.

DRIVING FACTORS

Reduced Operating Costs and Lower Maintenance to Drive the Market Growth

Natural refrigeration technologies are an outperformer from an economic standpoint. Many refrigerants in this category are cheaper than artificial gases, CFCs, and HFCs. Some are up to 40% more energy efficient than HFCs. Depending on the size and type of the system, many manufacturers may incur additional expenses upon installing a natural refrigerant system. Still, these costs are offset in the mid to long term by the reduced costs of the product.

Hydrocarbons, such as propane, butane, and propene, are ideal natural refrigerants. Butane is increasingly found in small commercial refrigeration systems. For example, Pepsi compared the efficiency of small drinks chillers with up to 150 g of coolant and discovered that butane-powered chillers used up to 27% less energy than R134a-powered chillers. Since then, the beverage manufacturer is the only one who uses butane in these chillers. Ben & Jerry's used butane for the first time in the U.S. for its ice cream freezers, and the results were mostly satisfactory. These results will drive the demand for butane for soft drink freezers in the retail market.

RESTRAINING FACTORS

Toxicity and Challenges of Using Natural Refrigerants to Restrict Market Growth

Natural refrigerants have some challenges and limitations as hydrocarbon refrigerants are extremely flammable and require additional safety such as gas detectors and safety instructions for personnel. Carbon dioxide refrigerants operate at high pressure. Ammonia refrigerants are toxic. Ammonia alkalinity is extremely corrosive and application components require careful consideration of material compatibility. However, some challenges and its toxicity have slowed the U.S. market growth.

SEGMENTATION

By Type Analysis

Based on type, the market is segmented into hydrocarbons, ammonia, and carbon dioxide.

The hydrocarbons segment accounted for the largest U.S. natural refrigerants market share and is anticipated to grow at a notable CAGR over the study period. This is due to the growing demand for hydrocarbon refrigerants for various applications such as air conditioners, refrigerators, heat pumps, chillers, and others. Moreover, the surge in industrialization in developing countries and their utilization for a wide range of commercial and residential purposes also boost the market growth.

Growing consumption of ammonia as an ideal natural refrigerant in applications, such as food & beverage preservation and processing, owing to its superior cooling abilities and low environmental impact would flourish the segment growth.

Carbon dioxide natural refrigerants are gaining traction in various applications such as compression-type refrigerating machines and onboard refrigerated ships. This is on account of the advent of synthesized halogenated working fluids, which are found to be an ideal and safe refrigerant.

By End-Use Industry Analysis

Based on end-use industry, the market is segmented into industrial, commercial, and domestic.

The industrial segment is expected to dominate the U.S. market share during the forecast period. Growing industrialization in the U.S. along with rising demand for ammonia in industrial refrigeration owing to its thermodynamic properties, profitability, and efficiency would propel the industrial segment growth. These factors would also help escalate product adoption in the industrial sector.

The demand for carbon dioxide, hydrocarbons, and ammonia as an ideal substitute is increasing rapidly in the domestic sector over hydrofluorocarbon (HFC) refrigerants. Their versatility enables them to work in home systems ranging from family-sized freezer/refrigeration systems to small under-the-counter refrigerators with numerous cooling compartments.

KEY INDUSTRY PLAYERS

In terms of the competitive landscape, the U.S. market depicts the presence of established and emerging natural refrigerant companies. Key players include Air Liquide USA, Linde plc, Airgas, Inc., AGC Inc., and Honeywell International Inc. Industry players compete primarily based on the price and application characteristics of the product. Companies are focusing on product innovation, social marketing, acquisitions, and collaborations.

LIST OF KEY COMPANIES PROFILED:

• Air Liquide USA (U.S.)


• Linde plc (Ireland)


• Airgas, Inc. (U.S.)


• AGC Inc. (Japan)


• Honeywell International Inc. (U.S.)


• Copeland LP (U.S.)


• Energy Recovery Inc. (U.S.)


• Evonik Industries AG (Germany)

KEY INDUSTRY DEVELOPMENTS:

• September 2020 - Linde plc launched a new line of hydrogen-based refrigeration systems for industrial and commercial applications. These systems used hydrogen, a natural refrigerant, and were designed to provide energy-efficient and environment-friendly cooling solutions.


• January 2022 - Honeywell launched a new, non-flammable, energy-efficient refrigerant, Solstice N71 (R-471A), to meet stringent regulations to reduce greenhouse gas emissions.

REPORT COVERAGE

The report thoroughly examines key factors such as leading companies, applications, and products. It also provides market trends and highlights significant industry advancements. The study includes different variables that have contributed to the market growth in recent years. It examines the market dynamics & opportunities and historical data and revenue growth estimates at the country level.

Report Scope & Segmentation