Next Generation Refrigerants Market - Global Industry Size, Share, Trends, Opportunity & Forecast, Segmented By Type (Natural Refrigerants, Hydrofluoro Olefins, Others), By Application (Air Conditioning, Refrigeration, Heat Pump, Others), By End Use (Residential, Industrial, Commercial & Transportation), By Region, & Competition, 2020-2030F

Market Overview

Global Next Generation Refrigerants market was valued at USD 4.15 Billion in 2024 and is expected to reach USD 5.10 Billion by 2030 with a CAGR of 3.48%. The global next-generation refrigerants market is experiencing rapid evolution, propelled by the combined influence of stringent environmental regulations, advancements in refrigerant technology, and growing demand for energy-efficient, eco-conscious cooling solutions. This category includes hydrofluoroolefins (HFOs), natural refrigerants such as CO₂, ammonia, and hydrocarbons, along with specialized blended formulations engineered to deliver ultra-low global warming potential (GWP) without compromising system efficiency or reliability.

Market expansion is being driven by breakthroughs in refrigerant chemistry, the development of equipment optimized for new formulations, and the integration of IoT-based monitoring and performance management. Although the transition is challenged by factors such as elevated conversion costs, specialized handling requirements, and uneven supply chain readiness, the sector remains on a strong growth trajectory. Positioned at the forefront of the cooling industry’s decarbonization efforts, next-generation refrigerants present significant long-term opportunities for manufacturers, technology developers, and service providers that can adapt to the sector’s rapidly evolving environmental and operational benchmarks.

Key Market Drivers

Rising Demand for Energy-Efficient Cooling Solutions

Rising demand for energy-efficient cooling solutions is a significant growth catalyst for the global next-generation refrigerants market, driven by the combined pressures of increasing energy costs, environmental sustainability targets, and expanding cooling needs across diverse sectors. The global population reached 8 billion in November 2022 and, while growth is expected to slow in the coming decades, it is projected to peak at approximately 10.4 billion by the mid-2080s, rapid urbanization, and rising living standards especially in emerging economies are contributing to a surge in demand for air conditioning, refrigeration, and heat pump systems. At the same time, climate change is leading to higher average temperatures and longer warm seasons, intensifying the reliance on cooling solutions. This sustained demand is prompting end users to prioritize systems that deliver high performance while consuming less energy.

Next-generation refrigerants, such as hydrofluoroolefins (HFOs) and natural refrigerants like CO₂, ammonia, and hydrocarbons, offer improved thermodynamic properties that enhance system efficiency. By enabling lower energy consumption without compromising cooling capacity, these refrigerants directly contribute to operational cost savings and reduced carbon emissions key considerations for both residential consumers and large-scale commercial operators. Government regulations and international energy-efficiency standards are pushing manufacturers to redesign HVAC and refrigeration equipment for optimal performance with low-global-warming-potential (GWP) refrigerants. Businesses, particularly in the commercial and industrial sectors, are adopting these solutions not only for regulatory compliance but also to meet corporate sustainability goals and strengthen ESG performance. The market is seeing accelerated adoption of next-generation refrigerants in both new installations and retrofits, reinforcing their role as a central enabler of the global shift toward energy-efficient, climate-resilient cooling technologies.

Expanding Commercial and Industrial Infrastructure

Expanding commercial and industrial infrastructure is a major growth driver for the global next-generation refrigerants market, as the development of new facilities and modernization of existing ones significantly increases the demand for advanced, sustainable cooling and refrigeration solutions. The rise of large-scale commercial spaces such as According to the Economic Times, new retail space in shopping malls grew by 72% last year, reaching approximately 5.95 million square feet across eight major cities to address rising demand from retailers. In 2023, these cities saw the launch of 11 new shopping malls, collectively contributing 5,948,395 square feet of additional retail space, supermarkets, hotels, office complexes, hospitals, educational institutions, and data centers requires extensive HVAC and refrigeration systems to ensure comfort, preserve perishable goods, and maintain sensitive environments. Similarly, industrial sectors such as food processing, pharmaceuticals, manufacturing, and cold chain logistics depend heavily on high-capacity cooling systems for operational efficiency and product integrity. These applications demand refrigerants that deliver reliable performance while meeting increasingly stringent environmental regulations.

Next-generation refrigerants, including hydrofluoroolefins (HFOs) and natural options like CO₂, ammonia, and hydrocarbons, are becoming the preferred choice in these settings due to their low global warming potential (GWP), energy efficiency, and compliance with international sustainability standards. In many cases, large commercial and industrial facilities are mandated to transition away from high-GWP hydrofluorocarbons (HFCs), driving accelerated adoption of eco-friendly alternatives. The rapid growth of sectors such as cold storage, e-commerce-driven logistics hubs, and green-certified commercial buildings amplifies the need for refrigerants compatible with modern, high-efficiency equipment. Investments in infrastructure projects across emerging markets, particularly in Asia Pacific, the Middle East, and Latin America, are creating vast opportunities for refrigerant manufacturers and HVAC equipment suppliers. As businesses and governments continue to prioritize energy efficiency, operational sustainability, and regulatory compliance, the expansion of commercial and industrial infrastructure will remain a key force propelling the global next-generation refrigerants market forward.

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Key Market Challenges

High Initial Transition and Equipment Upgrade Costs

Shifting from conventional high-global-warming-potential (GWP) refrigerants to next-generation alternatives often requires significant capital investment. Many existing HVAC and refrigeration systems are incompatible with low-GWP refrigerants such as hydrofluoroolefins (HFOs) or certain natural refrigerants, necessitating equipment replacement or costly retrofits. For large commercial and industrial facilities such as supermarkets, manufacturing plants, and data centers this conversion can involve complex system redesigns, safety modifications, and operational downtime. In price-sensitive markets, these upfront costs can deter adoption, especially among small and medium-sized enterprises.

Technical and Safety Concerns with Certain Refrigerants

While next-generation refrigerants are environmentally friendly, some present operational or safety challenges. For example, hydrocarbons like propane (R-290) are flammable, ammonia (R-717) is toxic, and CO₂ (R-744) operates under very high pressures requiring specialized handling, equipment design, and maintenance practices. These factors demand skilled technicians, additional safety infrastructure, and strict compliance with building codes, which may be lacking in developing markets. Inadequate awareness and training among service providers can further limit adoption, particularly in regions with limited technical expertise.

Key Market Trends

Rapid Emergence of Hybrid and Blended Refrigerant Formulations

A significant market trend is the growing adoption of refrigerant blends that combine hydrofluoroolefins (HFOs) with other low-global-warming-potential (GWP) compounds to balance performance, safety, and cost. These hybrid formulations are designed to optimize thermodynamic efficiency while addressing application-specific needs such as flammability reduction or compatibility with existing equipment. This approach allows industries to transition away from high-GWP hydrofluorocarbons (HFCs) without incurring the full cost of complete system overhauls, making them particularly attractive for large-scale commercial retrofits and industrial upgrades.

Integration of Refrigerants into Smart and IoT-Enabled Cooling Systems

As digitalization transforms the HVAC and refrigeration sector, next-generation refrigerants are increasingly being integrated into systems equipped with IoT sensors, cloud-based monitoring, and AI-driven predictive maintenance. These smart systems can precisely track refrigerant charge levels, detect leaks in real time, and optimize system performance for maximum energy efficiency. The compatibility of advanced refrigerants with intelligent control technologies enhances their value proposition, particularly for mission-critical facilities such as data centers, pharmaceutical cold chains, and high-end commercial buildings.

Segmental Insights

Type Insights

Based on the category of Type, the Hydrofluoro Olefins segment emerged as the fastest growing in the market for Next Generation Refrigerants in 2024. HFOs offer ultra-low global warming potential (GWP) compared to conventional hydrofluorocarbons (HFCs) while maintaining high energy efficiency and compatibility with existing HVAC and refrigeration systems, making them a preferred choice for both retrofits and new installations.

The accelerating phase-down of high-GWP refrigerants under the Kigali Amendment, coupled with stringent environmental regulations in major economies, is fueling rapid adoption of HFO-based solutions in sectors such as commercial refrigeration, automotive air conditioning, heat pumps, and industrial cooling. Manufacturers are increasingly investing in scaling up production and developing blended formulations that combine HFOs with other refrigerants to optimize performance, cost efficiency, and safety. These factors contribute to the growth of this segment.

Application Insights

Based on the category of Application, the Air Conditioning segment emerged as the dominating segment in the market for Next Generation Refrigerants in 2024. Rapid urbanization, rising global temperatures, and the expansion of infrastructure particularly in emerging economies are driving large-scale installation of air conditioning systems in homes, offices, retail spaces, hotels, and industrial facilities. The segment’s dominance is further reinforced by regulatory mandates promoting the adoption of low-global-warming-potential (GWP) and energy-efficient refrigerants in cooling systems. Governments and industry bodies across major markets, including Asia Pacific, North America, and Europe, are phasing down high-GWP hydrofluorocarbons (HFCs) in favor of sustainable alternatives such as hydrofluoroolefins (HFOs) and natural refrigerants. This regulatory shift is prompting equipment manufacturers to redesign air conditioning units for compatibility with next-generation refrigerants, accelerating market penetration.

Technological advancements, such as variable refrigerant flow (VRF) systems, inverter-based compressors, and smart climate control solutions, are also expanding the segment’s appeal, as these innovations often integrate seamlessly with new refrigerant chemistries. Additionally, climate conditions in many high-growth regions sustain year-round demand for cooling, further consolidating air conditioning as the largest application segment. With a combination of high installation volumes, regulatory support, and continuous product innovation, the air conditioning segment is positioned to maintain its leadership in the global next-generation refrigerants market.

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Regional Insights

Asia Pacific emerged as the largest market in the global Next Generation Refrigerants market in 2024, holding the largest market share in terms of Value & Volume. The Asia Pacific region emerges as the largest market in the global next-generation refrigerants industry due to a combination of strong economic growth, rapid urbanization, and increasing demand for energy-efficient and environmentally sustainable cooling solutions. The region is witnessing robust expansion in key end-use sectors, including residential and commercial air conditioning, refrigeration, automotive air conditioning, and industrial cooling, driven by population growth, rising disposable incomes, and expanding urban infrastructure.

Government initiatives and regulatory frameworks promoting low-global-warming-potential (GWP) and ozone-friendly refrigerants are accelerating the adoption of next-generation solutions. Countries such as China, Japan, India, and Australia are actively implementing policies aligned with the Kigali Amendment to the Montreal Protocol, encouraging the phase-out of high-GWP hydrofluorocarbons (HFCs) in favor of hydrofluoroolefins (HFOs), natural refrigerants, and other sustainable alternatives. Additionally, substantial investments in manufacturing capabilities, technological innovation, and R&D activities from both global and regional players strengthen the supply ecosystem, ensuring availability and cost competitiveness.

Recent Developments

• In July 2025, Advancement of refrigeration and air-conditioning technologies to enable the practical deployment of next-generation, low-global-warming-potential (GWP) refrigerants, focusing on system design optimization, performance enhancement, and regulatory compliance for large-scale commercial and industrial applications.
• In March 2025, Thermo Fisher Scientific introduced its first large-capacity and superspeed centrifuges equipped with a next-generation natural refrigerant-based cooling system, designed to significantly reduce environmental impact while maintaining high performance. The new models combine advanced temperature control with low-global-warming-potential (GWP) refrigerant technology, enabling laboratories to achieve superior energy efficiency and regulatory compliance without compromising operational reliability.
• In October 2024, Daikin Comfort Technologies North America Inc. (Daikin), a leading global HVAC manufacturer, has launched a targeted industry education initiative to accelerate the transition to low-global-warming-potential (GWP) refrigerants. The program focuses on equipping HVAC professionals with the knowledge and skills to work with advanced systems engineered for these next-generation refrigerants, ensuring both regulatory compliance and optimized system performance across residential, commercial, and industrial applications.
• In August 2024, The University of Notre Dame has been selected to lead the development of next-generation refrigerant technology through its participation in a newly established National Science Foundation (NSF) Engineering Research Center. This initiative will focus on creating advanced, low-global-warming-potential refrigerants designed to meet stringent environmental standards while delivering high energy efficiency for HVAC, refrigeration, and heat pump applications. The program will bring together multidisciplinary research teams, industry partners, and government agencies to accelerate innovation, scale viable solutions for commercial deployment, and position the U.S. as a global leader in sustainable cooling technologies.
• In January 2024, Hyundai Motor, in collaboration with SK Enmove, is advancing the development of next-generation vehicle refrigerants aimed at enhancing thermal management efficiency and supporting the growth of advanced climate control systems in the automotive sector. This initiative targets improved energy performance, compliance with low-GWP regulations, and integration into next-generation electric and hybrid vehicle platforms to strengthen competitiveness in the expanding thermal management market.

Key Market Players

• Honeywell International Inc
• Zhejiang Juhua Co Ltd
• Arkema
• DAIKIN INDUSTRIES Ltd
• The Chemours Company
• SRF Limited
• Tazzetti S.p.A
• ASPEN Refrigerants Inc
• Linde PLC
• Harp International Ltd.

Report Scope:

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

• Next Generation Refrigerants Market, By Type:

o   Natural Refrigerants

o   Hydrofluoro Olefins

o   Others

• Next Generation Refrigerants Market, By Application:

o   Air Conditioning

o   Refrigeration

o   Heat Pump

o   Others

• Next Generation Refrigerants Market, By End Use:

o   Residential

o   Industrial

o   Commercial & Transportation

• Next Generation Refrigerants Market, By Region:

o   North America

§  United States

§  Canada

§  Mexico

o   Europe

§  France

§  United Kingdom

§  Italy

§  Germany

§  Spain

o   Asia-Pacific

§  China

§  India

§  Japan

§  Australia

§  South Korea

o   South America

§  Brazil

§  Argentina

§  Colombia

o   Middle East & Africa

§  South Africa

§  Saudi Arabia

§  UAE

Competitive Landscape

Company Profiles: Detailed analysis of the major companies present in the Global Next Generation Refrigerants Market.

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Global Next Generation Refrigerants market report with the given market data, TechSci Research offers customizations according to a company's specific needs. The following customization options are available for the report:

Company Information

• Detailed analysis and profiling of additional market players (up to five).