Natural Refrigerants Market - Global Industry Size, Share, Trends, Opportunity, and Forecast, Segmented By Gas (Carbon Dioxide, Ammonia, Hydrocarbons, Others), By Application (Refrigerators, Air Conditioning Systems, Others), By Region and Competition, 2021-2031F

Forecast Period	2027-2031
Market Size (2025)	USD 2.44 Billion
CAGR (2026-2031)	4.46%
Fastest Growing Segment	Carbon Dioxide
Largest Market	Europe
Market Size (2031)	USD 3.17 Billion

Market Overview

The Global Natural Refrigerants Market will grow from USD 2.44 Billion in 2025 to USD 3.17 Billion by 2031 at a 4.46% CAGR. Natural refrigerants are naturally occurring substances, such as ammonia, carbon dioxide, and hydrocarbons, utilized in cooling and heating applications due to their negligible global warming potential and zero ozone depletion potential. The market’s growth is fundamentally supported by stringent international regulatory frameworks that mandate the phase-down of synthetic fluorinated gases, compelling industries to transition toward compliant alternatives. Additionally, the superior thermodynamic properties of these substances often result in enhanced energy efficiency, serving as a primary operational driver for commercial and industrial entities seeking to reduce long-term energy expenditures and meet decarbonization targets.

One significant challenge impeding the market's rapid expansion is the critical shortage of specialized technicians trained to handle the specific safety protocols and high-pressure requirements associated with these systems. This workforce gap can delay installation timelines and increase maintenance complexity for adopters. Despite this obstacle, the sector demonstrates strong momentum; according to ATMOsphere, in 2024, the number of food retail stores in North America operating transcritical CO2 systems reached 4,100, representing a 40% increase compared to the previous year.

Key Market Drivers

Implementation of stringent international regulations phasing out high-GWP hydrofluorocarbons serves as the foremost catalyst for market adoption. Legislative frameworks, such as the Kigali Amendment and the EU F-Gas Regulation, are systematically reducing the availability of synthetic refrigerants, thereby forcing end-users to retrofit or replace existing infrastructure with compliant natural alternatives. This regulatory pressure has created a massive compliance-driven shift, particularly in regions with aggressive sustainability targets where synthetic options are facing imminent bans. According to ATMOsphere, February 2025, in the 'Natural Refrigerants: State of the Industry 2024' report, this legislative push has resulted in 90,700 food retail stores in Europe installing transcritical CO2 systems, achieving a market penetration of 30%.

Rising global demand for energy-efficient cooling systems to reduce operational costs acts as a powerful parallel driver, incentivizing the switch even in the absence of immediate regulatory penalties. Natural refrigerants like ammonia and carbon dioxide possess superior thermodynamic properties that translate into lower electricity consumption and reduced operating expenses for commercial and industrial facilities. The financial return on these green investments is becoming increasingly attractive to corporate boards seeking to optimize lifecycle costs. According to the Environmental Investigation Agency, July 2025, in the 'Cooling the Climate Crisis' report, leading retailers adopting these technologies reported payback periods of 4–10 years, underscoring the long-term economic benefits. Broader industrial uptake is also evident; according to ATMOsphere, in 2025, the number of industrial sites in Europe utilizing transcritical CO2 systems reached 4,900, reflecting the sector's shift toward cost-effective thermal management.

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Key Market Challenges

The critical shortage of specialized technicians trained to handle the specific safety protocols and high-pressure requirements constitutes a formidable barrier to the widespread adoption of natural refrigerants. Unlike conventional synthetic fluids, natural alternatives such as carbon dioxide and ammonia often operate under extreme pressures or possess flammability characteristics that demand rigorous safety protocols and precise handling. When the workforce lacks the necessary competency to manage these technical complexities, installation projects face significant delays, and operational risks increase. Consequently, end-users in commercial and industrial sectors encounter heightened uncertainty regarding long-term system reliability, often delaying investment in these sustainable technologies due to fears of prolonged downtime and inadequate maintenance support.

This skills gap is substantiated by recent industry data highlighting the disparity between regulatory ambition and workforce readiness. According to the European association of refrigeration, air conditioning and heat pump (AREA), in 2024, only 21% of F-gas certified personnel were trained on Carbon Dioxide (CO2) and just 12% were trained on Ammonia. This low penetration of specialized skills directly restricts the market's capacity to scale, as the supply of qualified labor fails to keep pace with the growing regulatory pressure to transition away from fluorinated gases.

Key Market Trends

The surge of hydrocarbons in self-contained commercial display units is transforming retail cooling by offering superior operational flexibility and reduced infrastructure complexity. Unlike centralized systems requiring extensive piping, these plug-in units utilize Propane (R290) in small, hermetically sealed circuits, allowing for modular store layouts and easier renovation cycles. This shift is accelerated by the high thermodynamic efficiency of hydrocarbons, which enables significant energy savings in small-capacity applications without the regulatory burdens associated with synthetic fluids. The scale of this transition is evident in recent adoption figures; according to ATMOsphere, February 2025, in the 'Natural Refrigerants: State of the Industry 2024' report, the European market has deployed approximately 17 million self-contained hydrocarbon cabinets, establishing the technology as a dominant standard for modern food retail merchandising.

In parallel, the adoption of low-charge ammonia technology in light industrial sectors is fundamentally altering the safety equation for large-scale thermal management. By drastically reducing the refrigerant inventory required for effective cooling, these systems mitigate the toxic release risks traditionally associated with ammonia, making them viable for facilities located in densely populated or mixed-use zones. This technological evolution involves a move toward factory-assembled packaged units that ensure higher quality control and faster onsite commissioning compared to custom-built plants. The market traction for this safer architecture is substantial; according to ATMOsphere, February 2025, in the 'Natural Refrigerants: State of the Industry 2024' report, the number of industrial sites in North America utilizing low-charge ammonia systems reached 1,230, with the installation of packaged units witnessing a 38% growth year-over-year.

Segmental Insights

The Carbon Dioxide segment constitutes the fastest-growing category within the global natural refrigerants market, primarily driven by stringent environmental mandates targeting substances with high global warming potential. Regulatory frameworks, specifically the European Union F-Gas Regulation and the Kigali Amendment, compel industries to transition toward sustainable alternatives. Consequently, the commercial refrigeration and cold chain sectors are increasingly adopting Carbon Dioxide due to its non-flammable properties and favorable thermodynamic performance. This shift ensures compliance with international sustainability goals while offering a reliable solution for heavy-duty cooling applications.

Regional Insights

Europe maintains a dominant position in the global natural refrigerants market, driven primarily by stringent environmental mandates enforced by the European Union. The aggressive implementation of the F-Gas Regulation has significantly restricted the use of synthetic hydrofluorocarbons, thereby necessitating a widespread shift toward sustainable alternatives with low global warming potential. This legislative pressure has accelerated the adoption of carbon dioxide and ammonia-based systems across commercial and industrial applications. Furthermore, the region's strong commitment to the Montreal Protocol strengthens this framework, ensuring that European industries prioritize environmentally compliant cooling solutions over conventional chemical refrigerants.

Recent Developments

• In December 2025, Copeland announced the commercial launch of its transcritical CO2 scroll compressor featuring dynamic vapor injection (DVI) technology in the North American market. Engineered for distributed refrigeration architectures, this new product facilitates the adoption of natural refrigerants in food retail sectors for both new store constructions and retrofits. The integration of DVI technology enhances system efficiency by managing high-pressure vapor directly within the compression cycle, effectively eliminating the need for parallel compression. This advancement simplifies the overall system design and reduces installation complexity, supporting retailers in their transition to sustainable, low-global warming potential refrigerant solutions.
• In October 2024, Danfoss introduced the NeoCharge solution for industrial ammonia refrigeration systems during the Chillventa trade show in Nuremberg, Germany. This innovative technology was developed to significantly reduce the refrigerant charge required in large-scale cooling plants while simultaneously enhancing system efficiency. By minimizing liquid recirculation and enabling operation without superheat, the solution offers potential energy savings of approximately 15 percent. This development addresses key safety and regulatory concerns associated with ammonia charges, allowing facility operators to increase storage capacity within existing infrastructures while maintaining strict adherence to sustainability and safety standards in the industrial refrigeration sector.
• In March 2024, Bitzer broadened its range of compression products with the introduction of the Orbit PRO scroll compressor series, which is specifically optimized for the natural refrigerant propane (R290). Showcased at the Mostra Convegno Expocomfort trade fair, these new compressors are engineered for use in commercial air conditioning, process cooling, and heat pump applications. The series supports the industry's shift toward low-global warming potential solutions by delivering high energy efficiency and reliable performance with hydrocarbons. This product launch underscores the manufacturer's commitment to providing future-proof technology that aligns with tightening environmental regulations regarding fluorinated refrigerants.
• In January 2024, Panasonic expanded its portfolio of environmentally sustainable technologies by launching a new 20-horsepower CO2 condensing unit across the European market. Designed to utilize the natural refrigerant R744, this larger capacity unit addresses the cooling requirements of supermarkets, cold stores, and industrial applications. The system features two-stage inverter-controlled rotary compressors, enabling it to operate efficiently in extreme ambient temperatures while providing a wide evaporation range suitable for both medium and low-temperature needs. This strategic release complements the company's existing lineup of smaller CO2 units, offering installers greater flexibility with extended pipe runs and a compact footprint.

Key Market Players

• Linde
• Danfoss
• Bitzer
• Emerson
• Panasonic
• GEA Group
• Mayekawa
• Daikin
• Carrier
• Gree

By Gas	By Application	By Region
Carbon Dioxide Ammonia Hydrocarbons Others	Refrigerators Air Conditioning Systems Others	North America Europe Asia Pacific South America Middle East & Africa

Report Scope:

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

• Natural Refrigerants Market, By Gas:

• Carbon Dioxide
• Ammonia
• Hydrocarbons
• Others

• Natural Refrigerants Market, By Application:

• Refrigerators
• Air Conditioning Systems
• Others

• Natural Refrigerants 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