Air Separation Unit Market – Global Industry Size, Share, Trends, Opportunity, and Forecast Segmented by Process (Cryogenic Distillation and Non-cryogenic Distillation), Gas (Nitrogen, Oxygen, Argon, and other gases), End User (Chemical Industry, Oil and Gas Industry, Iron and Steel Industry, and Other End Users), By Region, Competition 2021-2031F

Forecast Period	2027-2031
Market Size (2025)	USD 5.96 Billion
CAGR (2026-2031)	4.04%
Fastest Growing Segment	Iron and Steel
Largest Market	Asia Pacific
Market Size (2031)	USD 7.56 Billion

Market Overview

The Global Air Separation Unit Market will grow from USD 5.96 Billion in 2025 to USD 7.56 Billion by 2031 at a 4.04% CAGR. Air Separation Units are specialized industrial facilities designed to fractionate atmospheric air into its primary components, such as nitrogen, oxygen, and argon, typically utilizing cryogenic distillation or non-cryogenic adsorption technologies. The primary drivers supporting market growth include the intensifying demand for industrial gases within the steel manufacturing and chemical processing sectors where high purity feedstocks are essential. Furthermore, the global transition toward cleaner energy sources is creating sustained requirements for oxygen in hydrogen production and coal gasification projects, thereby reinforcing the necessity for these separation technologies.

One significant challenge that could impede market expansion is the high operational cost associated with the substantial electricity consumption required for cryogenic fractionation processes. This dependency on energy inputs makes profit margins highly susceptible to fluctuating electricity prices and supply grid instability. According to the European Industrial Gases Association, in 2024, the global industrial gas market's value stood at €86.9 billion. While this figure illustrates the vast scale of the industry, high energy expenses remain a critical barrier to cost efficient infrastructure development in price sensitive regions.

Key Market Drivers

The expansion of the global iron and steel manufacturing industry acts as a primary catalyst for the deployment of air separation units, particularly for oxygen production used in blast furnaces. Steel producers require massive volumes of high-purity oxygen to increase combustion efficiency and reduce carbon emissions in the smelting process. This heavy reliance ensures a consistent revenue stream for industrial gas suppliers who install on-site separation facilities to support continuous metal production. According to the World Steel Association, September 2024, in the 'August 2024 crude steel production' update, world crude steel production for the 71 countries reporting to the association was 144.8 million tonnes. Such sustained output levels necessitate the continuous operation of large-scale cryogenic plants to maintain global supply chains.

The emergence of green hydrogen and decarbonization initiatives further accelerates market demand as industries transition toward cleaner energy vectors. Air separation units are critical in these projects, providing nitrogen for ammonia synthesis in hydrogen transport or oxygen for oxy-combustion carbon capture processes. Major industrial gas companies are heavily capitalizing on this trend by expanding their infrastructure to support low-carbon hydrogen hubs. According to Air Liquide, July 2024, in the 'First half 2024 financial report', the Group's investment backlog maintained a very high level of €4.1 billion, largely supported by diverse energy transition projects. Moreover, the financial scale of leading market players underscores the sector's robustness; according to Linde plc, in 2024, the company reported third-quarter sales of $8.4 billion.

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Key Market Challenges

The high operational cost stemming from the substantial electricity consumption required for cryogenic distillation processes acts as a significant restraint on the expansion of the Global Air Separation Unit Market. Since these facilities rely on continuous, high-voltage power inputs to maintain necessary sub-zero temperatures, the economic viability of air separation projects is intrinsically linked to local energy tariffs. This heavy dependence creates financial volatility, where even marginal increases in electricity prices can disproportionately erode profit margins. Consequently, manufacturers often hesitate to sanction new infrastructure developments in regions characterized by expensive or unstable power grids, thereby limiting the industry's geographical reach and preventing capacity additions in potentially high-demand areas.

This financial exposure is particularly acute in major manufacturing hubs where the volume of production is high. According to the European Industrial Gases Association, the industrial gases sector in the EU-27 generated €21.2 billion in revenue in 2024. This figure underscores the magnitude of the market currently susceptible to energy cost fluctuations. When power expenses rise, the resulting increase in production costs forces companies to raise prices for end-users, which reduces competitiveness and dampens demand from price-sensitive sectors such as steel manufacturing and chemical processing.

Key Market Trends

The integration of renewable energy sources is fundamentally reshaping the operational framework of air separation units to mitigate the volatility of electricity costs and reduce carbon footprints. As these facilities are highly energy-intensive, operators are increasingly decoupling from traditional fossil-fuel-based grids in favor of dedicated renewable power agreements to ensure price stability and regulatory compliance. This pivot is evidenced by major capital allocations toward low-carbon infrastructure to secure sustainable power inputs. According to Linde, July 2024, in the '2023 Sustainable Development Report', the group announced a target to spend an additional $3 billion on decarbonizing its own operations, a move largely centered on increasing low-carbon energy sourcing to meet intensified environmental goals.

Simultaneously, the market is witnessing the emergence of Liquid Air Energy Storage (LAES) systems, which repurpose cryogenic separation technology for large-scale grid balancing. Unlike traditional units that focus solely on gas production for industrial use, LAES plants utilize excess grid electricity to liquefy air, storing it to generate power during peak demand periods. This application effectively transforms air separation technology into a critical enabler for managing intermittent renewable energy baseloads. Validating this trend's commercial viability, according to Highview Power, June 2024, in an official press release, the company secured £300 million to construct one of the world's largest commercial-scale liquid air energy storage facilities in the United Kingdom.

Segmental Insights

The Iron and Steel segment represents the fastest-growing category in the Global Air Separation Unit Market, driven by rapid industrialization and infrastructure development in emerging economies. Steel manufacturers extensively utilize these units to generate high-purity oxygen, which is a critical input for optimizing combustion efficiency in Basic Oxygen Furnaces and Electric Arc Furnaces. This integration allows facilities to enhance production rates while reducing energy consumption, aligning with strict environmental mandates. As the World Steel Association projects sustained growth in global steel demand, the reliance on air separation technologies for consistent industrial gas supply continues to surge.

Regional Insights

The Asia Pacific region maintains a leading position in the Global Air Separation Unit Market, primarily driven by extensive industrial manufacturing in China and India. This market dominance stems from the high volume of oxygen and nitrogen required by the expanding iron and steel industries. Additionally, the region experiences strong demand from the chemical and electronics sectors, particularly for semiconductor fabrication which necessitates high-purity gases. Continued investments in energy infrastructure and heavy industry further solidify the requirement for large-scale air separation facilities across these developing economies.

Recent Developments

• In July 2025, Linde secured two long-term agreements to supply industrial gases for commercial space operations, prompting significant infrastructure developments in the southern United States. The company detailed plans to construct and operate a new air separation unit in Brownsville, Texas, while simultaneously expanding its existing facility in Mims, Florida. These projects, aimed at producing liquid oxygen, nitrogen, and argon, were designed to support the rapidly growing frequency of rocket launches. The Texas facility was anticipated to begin operations in early 2026, serving both the space sector and regional merchant customers.
• In January 2025, Messer announced a strategic investment of over $70 million to build a state-of-the-art air separation unit in Berryville, Arkansas. This new facility was commissioned to address the escalating demand for industrial gases across the southern United States and to reinforce the company's supply network in the region. Expected to be completed in the latter half of 2026, the plant was planned to complement existing operations in Lewisville, Arkansas, and produce essential gases for various expanding industries. The project highlighted the company's dedication to supporting economic growth and strengthening its market presence in the Americas.
• In July 2024, Air Products revealed plans to modernize its industrial gas operations by constructing two new air separation units at its facilities in Conyers, Georgia, and Reidsville, North Carolina. These advanced units were selected to replace older assets, thereby increasing production capacity and improving operational reliability for regional merchant markets. Scheduled to come onstream in 2026, the new infrastructure was designed to supply liquid oxygen, nitrogen, and argon to diverse industries, including chemicals, food, and metals processing. This development underscored the company's commitment to sustainability and productivity efficiencies within its established base business.
• In June 2024, Air Liquide announced a major strategic development involving an investment of up to $850 million to construct, own, and operate four Large Modular Air separation units in Baytown, Texas. This project, established under a long-term agreement with a leading energy corporation, was designed to supply massive volumes of low-carbon oxygen and nitrogen for the production of low-carbon hydrogen and ammonia. The initiative represented the largest industrial investment in the company's history at that time and leveraged its extensive pipeline network to support industrial decarbonization along the U.S. Gulf Coast while expanding its rare gases portfolio.

Key Market Players

• Linde AG
• Messer Group GmbH
• Siad Macchine Impianti Spa
• Shanghai Chinllenge Gases Co. Ltd
• Taiyo Nippon Sanso Corporation
• Air Liquide SA
• Air Products and Chemicals Inc.
• Universal Industrial Plants Mfg Co. Pvt Ltd
• Bhoruka Gases Limited
• Sichuan Air Separation Plant Group

By Region

North America Europe Asia Pacific South America Middle East & Africa

Report Scope:

In this report, the Global Air Separation Unit Market has been segmented into the following categories, in addition to the industry trends which have also been detailed below:

• Air Separation Unit Market, By Region:

• North America
• United States
• Canada
• Mexico
• Europe
• France
• United Kingdom
• Italy
• Germany
• Spain
• Asia Pacific
• China
• India
• Japan
• Australia
• South Korea
• South America
• Brazil
• Argentina
• Colombia
• Middle East & Africa
• South Africa
• Saudi Arabia
• UAE