Cooling Towers Market – Global Industry Size, Share, Trends, Opportunity, and Forecast, Segmented By Product (Open-circuit, Closed-circuit, Hybrid), By Material (FRP, Steel, Concrete, Wood), By Application (HVAC, Power Generation, Oil & Gas), By Region, By Competition 2021-2031F

Forecast Period	2027-2031
Market Size (2025)	USD 5.34 Billion
CAGR (2026-2031)	5.01%
Fastest Growing Segment	FRP
Largest Market	Asia Pacific
Market Size (2031)	USD 7.16 Billion

Market Overview

The Global Cooling Towers Market will grow from USD 5.34 Billion in 2025 to USD 7.16 Billion by 2031 at a 5.01% CAGR. A cooling tower is a heat rejection device that extracts waste heat to the atmosphere by cooling a water stream to a lower temperature through evaporation or conduction. The global market is primarily supported by the escalating energy demands of the power generation sector and the robust expansion of industrial manufacturing, both of which necessitate efficient thermal management systems. Additionally, the continued development of large-scale commercial infrastructure has intensified the requirement for centralized heating, ventilation, and air conditioning applications, further solidifying the demand for these critical units across diverse economies.

However, the industry faces a significant impediment regarding environmental sustainability and strict water conservation mandates. The high water consumption inherent in traditional evaporative cooling often conflicts with regulatory frameworks in water-scarce regions, creating a barrier to new installations. According to Eurovent Market Intelligence, in 2024, the cooling tower market in Europe was valued at €210 million, a figure that reflects stagnation compared to the growth of water-saving alternatives. This data highlights the challenge manufacturers encounter in balancing thermal performance with the increasing pressure to minimize resource usage.

Key Market Drivers

The surging demand for HVAC systems in commercial and residential infrastructure, particularly within the rapidly expanding data center sector, stands as a primary catalyst for market growth. As digital transformation accelerates, facilities require robust thermal management systems to dissipate the massive heat generated by high-density servers, thereby relying heavily on evaporative cooling towers for energy-efficient heat rejection. This trend is visibly translating into financial performance for key manufacturers. According to SPX Technologies, May 2024, in the 'First Quarter 2024 Results', the HVAC segment generated revenue of $302.4 million, an increase of 20.2% from the previous year, driven significantly by strong demand in cooling applications and operational volume.

Simultaneously, the increasing global capacity in thermal and nuclear power generation necessitates a parallel expansion in the cooling tower sector to manage waste heat and ensure regulatory compliance. Power plants are intensifying their output to meet base-load electricity requirements, creating sustained demand for both natural draft and mechanical draft towers that handle large water flow rates. According to the U.S. Energy Information Administration, February 2024, in the 'Preliminary Monthly Electric Generator Inventory', developers planned to add 62.8 gigawatts of new utility-scale electric-generating capacity in the United States in 2024, a trajectory that directly correlates with the procurement of auxiliary cooling apparatus. This sectoral momentum is further evidenced by equipment suppliers; according to Babcock & Wilcox, August 2024, in the 'Second Quarter 2024 Results', the company reported an ending implied backlog of $757.8 million, reflecting a 51% increase year-over-year due to sustained project activity.

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Key Market Challenges

Strict water conservation mandates and the escalating prioritization of environmental sustainability impose a severe limitation on the Global Cooling Towers Market. As fresh water becomes a critical resource, regulatory bodies in key industrial zones are enforcing stringent caps on water withdrawal, directly targeting the high operational consumption inherent in traditional evaporative cooling towers. This regulatory friction creates a substantial barrier to new facility construction, as project developers face prolonged permitting delays or outright denials for water-intensive heat rejection systems, thereby shrinking the potential customer base for standard cooling units.

According to the Uptime Institute, in 2024, only 43% of data center operators tracked their water usage metrics, a significant transparency gap that has prompted authorities to impose tighter precautionary restrictions on evaporative cooling deployments. This lack of transparent efficiency reporting hampers the industry’s ability to defend against water-use caps, forcing a contraction in orders for conventional towers as end-users pivot toward dry-cooling technologies to ensure operational compliance. Consequently, the inability to meet these stringent sustainability benchmarks without incurring prohibitive operational costs is actively stalling market expansion.

Key Market Trends

The Adoption of Hybrid Cooling Technologies for Water Conservation is rapidly reshaping the market as industries seek to balance thermal performance with diminishing freshwater availability. Unlike traditional evaporative units that consume vast quantities of water, hybrid systems intelligently switch between wet and dry operation modes based on ambient conditions, thereby drastically lowering utility footprints. This technological evolution is particularly critical for data centers and heavy industry in drought-prone regions, where water use efficiency is becoming a primary operational metric alongside energy performance. According to ACHR News, July 2024, in the article 'Sustainable Data Center Cooling', the deployment of hybrid solutions like the HXV Hybrid Cooler has demonstrated the ability to achieve up to 70% water savings compared to open cooling towers, illustrating the substantial resource efficiency driving this trend.

Simultaneously, the Integration of IoT and AI for Predictive Maintenance and Real-Time Monitoring is transforming cooling towers from passive assets into intelligent, data-responsive components. Manufacturers are increasingly embedding sensors and cloud-based analytics to enable condition-based maintenance, which anticipates component failures before they cause unplanned downtime. This digital shift enhances operational reliability and optimizes energy consumption by dynamically adjusting fan speeds and water flow in real-time response to thermal load fluctuations. According to Johnson Controls, May 2024, in the '2024 Sustainability Report', the implementation of their AI-driven OpenBlue solutions in complex environments has resulted in reducing carbon emissions by 30% while delivering guaranteed energy savings, underscoring the market’s pivot toward digitally optimized thermal management.

Segmental Insights

Fiber Reinforced Plastic is currently the fastest-growing material segment within the global cooling towers market, driven by its advantageous physical properties. Industrial operators increasingly prefer this material over traditional steel or concrete due to its high resistance to corrosion and chemical weathering, which is essential for heavy industrial applications. This durability significantly lowers maintenance demands and extends the service life of the equipment in harsh environments. Additionally, the favorable strength-to-weight ratio facilitates easier installation processes. These factors collectively encourage the widespread adoption of these units to ensure cost-effective and reliable thermal management.

Regional Insights

The Asia Pacific region commands the leading position in the Global Cooling Towers Market, primarily driven by extensive industrialization and rapid urbanization in major economies such as China and India. The region experiences sustained demand from critical sectors including power generation, manufacturing, and HVAC applications. This market expansion is further accelerated by strict mandates for energy efficiency and water conservation enforced by regulatory institutions like the Bureau of Energy Efficiency in India. Additionally, continuous investments in commercial infrastructure and data centers ensure a steady requirement for advanced heat rejection systems across the region.

Recent Developments

• In February 2025, John Cockerill Hamon entered into a strategic partnership with B.Grimm Technologies to expand its presence in the industrial cooling tower market in Thailand. This collaboration aimed to combine the company's global expertise in cooling tower design and thermal engineering with the local market knowledge and operational capabilities of its partner. The agreement focused on delivering high-performance cooling solutions to support the growing industrial infrastructure in the region. By joining forces, the companies sought to provide sustainable and efficient heat rejection systems tailored to the specific needs of power generation and industrial clients in Southeast Asia.
• In October 2024, Baltimore Aircoil Company launched its new AI-driven Loop™ Platform designed to optimize the performance of cooling towers. This innovative digital solution was engineered to enhance system efficiency by continuously monitoring operational data and adapting to changing environmental conditions in real-time. The platform aimed to reduce energy consumption, lower maintenance costs, and extend the lifespan of equipment through advanced predictive maintenance capabilities. By integrating artificial intelligence, the system allowed facility managers to prevent unexpected downtime and streamline cooling operations, reinforcing the company’s commitment to delivering smart and sustainable cooling technologies for the global market.
• In August 2024, Babcock & Wilcox announced that its environmental segment had secured a contract worth more than $8 million to supply a cooling system for a renewable energy facility in the United Kingdom. The project involved the design and delivery of a SPIG air-cooled condenser, a dry cooling technology that condenses turbine exhaust steam using ambient air without requiring water. This system was selected for its ability to operate efficiently in the local climate while eliminating water usage and reducing plume formation. The contract highlighted the company's role in supporting low-carbon electricity generation with advanced thermal management solutions.
• In February 2024, Aggreko was granted a patent by the United States Patent and Trademark Office for its novel rental cooling tower design. The patented solution featured a modular cooling tower integrated within an ISO-compliant shipping container frame, which facilitated faster deployment and safer installation on project sites. This design allowed the units to be transported efficiently by land or sea without the logistical challenges and costs associated with oversized loads. The system was engineered to deliver significant energy savings and reduce the physical footprint required for temporary cooling applications, helping industrial customers minimize their operational carbon emissions during rental periods.

Key Market Players

• Cooling Tower Systems, Inc.
• Babcock & Wilcox Enterprises, Inc.
• Baltimore Aircoil Company
• Delta Cooling Towers Inc.
• Engie Refrigeration GmbH
• EVAPCO, Inc.
• Johnson Controls International Plc.
• Kelvion Holdings GmbH
• Liang Chi Industry Co. Ltd

By Product	By Material	By Application	By Region
Open-circuit Closed-circuit Hybrid	FRP Steel Concrete Wood	HVAC Power Generation Oil & Gas	North America Europe Asia Pacific South America Middle East & Africa

Report Scope:

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

• Cooling Towers Market, By Product:

• Open-circuit
• Closed-circuit
• Hybrid

• Cooling Towers Market, By Material:

• FRP
• Steel
• Concrete
• Wood

• Cooling Towers Market, By Application:

• HVAC
• Power Generation
• Oil & Gas

• Cooling Towers 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