Refrigeration Oil Market size is forecast to reach $1.35 billion by 2025, after growing at a CAGR of 4.30% during 2020-2025. Refrigeration oil is a high-temperature formulation of a mixture of oil and additives devised for usage in cooling systems. It acts as a lubricant in refrigeration compressors, derived from both mineral and synthetic oil in order to lubricate or reduce friction of metal parts and wear on the compressor. The product flows under high pressure to turn from liquid to vapor state to generate a cooling effect due to its special characteristics such as better chemical and thermal stability, low contamination, low pour point, high dielectric strength and viscosity.
By Type of Oil - Segment Analysis
Synthetic Oil segment held a significant share in refrigeration oil market in 2019. This dominance is attributed to its high performance in extreme conditions, superior viscosity index, high shear stability, and enhanced chemical resistance in comparison to mineral oil. Additionally, synthetic oil lasts longer and is compatible with low GWP and modern refrigerants such as NH3, HFO, and CO2. The growth is attributed to the increasing demand for POE and PGA in ammonia and CO2 refrigeration systems. On the other hand, the mineral oil offers more benefits over the synthetic oil, which leads to its use as a thermal fluid in mechanical and industrial applications.
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By Refrigerant Type - Segment Analysis
Hydroflurocarbon segment held a significant share in refrigeration oil market in 2019. HFCs are chemically stable, non-flammable, and nonreactive. HFCs are used in a wide variety of cooling systems, from refrigerators and freezers to automotive air-conditioning units. HFC, and ammonia is expected to grow at a faster pace as compared to others due to no greenhouse potential (zero/low ODP and GWP properties). As fewer and fewer CFCs and HCFCs are available for use as refrigerants, companies are looking to ammonia as a more effective replacement. According to ASHRAE and the International Institute of Ammonia Refrigeration (IIAR), ammonia is a cost-effective, efficient alternative to CFCs and HCFCs that is also safe for the environment. Ammonia is safe for the environment, with an Ozone Depletion Potential (ODP) rating of 0 and a Global Warming Potential (GWP) rating of 0.
By Application - Segment Analysis
Refrigerator & Freezer segment held a significant share in refrigeration oil market in 2019 growing at a CAGR of 4.5% during the forecast period. This growth is attributed to the growing demand for perishable food products due to the changing lifestyle of people in developed and developing regions and growth in trade of food products. The rising sales of refrigerators & freezers are anticipated to drive the growth of the market over the forecast period. Compressor Oil is designed to provide long service life in most compressor applications. Moreover, air conditioners segment is expected to have a significant growth during the forecast period due to installation of air conditioners in vehicles, residences, centralized systems in offices and in industries.
However, consumer electronics companies plan to increase prices of refrigerators, air-conditioners, microwave ovens and washing machines due to higher component prices amid short supplies from coronavirus-hit China.
Geography- Segment Analysis
Asia Pacific dominated the refrigeration oil market with a share of more than 32%, followed by North America and Europe. The increasing population in the region and the rising demand for refrigerators, freezers, air conditioners, and automobiles in the emerging markets of APAC, such as China and India, are some of the major factors projected to drive the demand for refrigeration oil in the region. Furthermore, the improving lifestyle, increasing employment rate, rising disposable income of the people, and mounting foreign investments in various sectors of the economy are some of the other factors that make APAC an attractive market for refrigeration oil manufacturers.
The North America refrigeration oil market is also driven by the increased demand for food storage equipment, growing urbanization, and growth in the consumer electronics market. With increasing usage of air conditioners and refrigerators, there will be augmentation in the demand for high performance and longer life of these systems. Since these oils add long life to the refrigerant systems, the market for the same will flourish consistently.
Drivers – Refrigeration Oil Market
Cold chain logistics have sparked an interest in refrigeration equipment and in turn refrigeration oil
Changing food habits coupled with spending capacity have resulted in a number of licenced and franchised stores of limited service restaurants such as McDonald’s and Subway, KFC and local services and is driving demand for frozen and chilled food products. Moreover, storage of medical products (such as vaccines, other medical products, etc.) is expected to increase demand for refrigeration systems. Hence, it is expected to increase installation of refrigeration equipment in warehouses as well as in vehicles for distribution.
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Challenges – Refrigeration Oil Market
Stringent regulations
Various government organizations are trying to enforce amendments over the industries to reduce the use of HCFCs and CFCs in refrigeration system until 2030 by A5 countries in order to identify such refrigerants as obsolete. Thus, stringent government regulations are expected to hinder the refrigeration oil market. Moreover, ammonia is not compatible with copper, so it cannot be used in any system with copper pipes. Release of ammonia due to excess water within the system freezing, causes broken pipes and equipment.
Market Landscape
Technology launches, acquisitions and R&D activities are key strategies adopted by players in the refrigeration oil market. In 2019, the market of refrigeration oil has been consolidated by the top five players accounting for xx% of the share. Major players in the refrigeration oil market are JXTG Group, BASF SE, Idemitsu Kosan Co., Ltd., Royal Dutch Shell plc, ExxonMobil Corporation, BP p.l.c., PETRONAS, Chevron Corporation, Total S.A., Sinopec Group, FUCHS PETROLUB SE, Johnson Controls, and The Lubrizol Corporation, among others.
Key Takeaways
Asia Pacific region is expected to maintain its dominance during the forecast period.
The key factor driving the growth of the global refrigeration oil market is the increasing consumption of frozen and packaged food products.
Refrigeration oil exhibits high viscosity, low pour point, and is contamination-free due to which the market is expected to grow during the forecast period.
Related Reports :
A. R22 Refrigerant Market
https://www.industryarc.com/Report/18484/r22-refrigerant-market-research-report-analysis.html
B. Natural Refrigerants Market
https://www.industryarc.com/Report/15239/natural-refrigerants-market.html
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