Data Center Refrigerant Market – By Refrigerant (HFCs, HFOs), By Data Center (Enterprise, Colocation, Cloud, Hyperscale), By Cooling (Air Cooling, Liquid Cooling, Free Cooling), By Application, By End-Use & Forecast, 2024 - 2032

Data Center Refrigerant Market Size

Data Center Refrigerant Market was valued at USD 581.1 million in 2023 and is estimated to register a CAGR of over 9% between 2024 & 2032. The market growth is driven by the rise of cloud computing services and ongoing innovations in cooling technologies.
 

The adoption of waterless cooling systems to reduce water consumption and enhance energy efficiency is driving the market growth of data center refrigerants. These systems offer significant operational benefits by eliminating water use and lowering energy costs. For instance, in October 2023, ThermalWorks introduced an innovative waterless cooling system for the evolving data center industry. This ultra-efficient, modular design aims to transform traditional data center operations by reducing energy consumption and eliminating water use in cooling processes.
 

Additionally, the rising demand for hyperscale data centers is providing significant market opportunities for the data center refrigerant market. Hyperscale facilities, operated by major cloud service providers such as Amazon, Google, and Microsoft, require advanced cooling solutions to manage high-density server environments. As these companies expand their global footprint to meet the surging data storage and processing needs, the adoption of efficient and environmentally friendly refrigerants becomes crucial. Advanced refrigerants such as HFOs, known for their low global warming potential (GWP), are increasingly preferred to ensure optimal cooling efficiency and regulatory compliance, thus driving market growth.
 

The high initial cost associated with transitioning to advanced, environmentally friendly refrigerants is hampering the market growth of the market. Implementing these new refrigerants often requires substantial investment in upgrading or replacing existing cooling infrastructure. Additionally, the need for specialized equipment and retrofitting current systems can lead to increased capital expenditure. Smaller data centers or companies with limited budgets may find it challenging to bear these costs, hindering widespread adoption in the market.
 

Data Center Refrigerant Market Trends

Companies operating in the data center refrigerant industry are engaged in various inorganic growth strategies to stay competitive in the market. Collaborations between technology and energy companies are driving advancements in the market. These partnerships aim to enhance cooling efficiency and sustainability by developing innovative thermal management systems. For instance, in June 2024, Petronas Lubricants International partnered with Iceotope to launch a new data center cooling fluid and jointly develop solutions for data centers, edge computing facilities, and blockchain operations, aiming to reduce carbon emissions and water usage.
 

Moreover, the adoption of liquid immersion cooling systems is emerging as a unique growth driver for the data center refrigerant market. This innovative cooling method involves submerging servers in a thermally conductive but electrically insulating liquid, allowing for more efficient heat dissipation compared to traditional air cooling. Liquid immersion cooling significantly reduces energy consumption and increases cooling efficiency, making it highly suitable for high-performance computing applications in data centers. As data centers face escalating heat loads from advanced computing technologies, the shift towards liquid immersion cooling systems, which often require specialized refrigerants, is expected to drive substantial market growth.
 

Data Center Refrigerant Market Analysis

Based on refrigerant, the market is categorized into HFCs, HFOs, and others. In 2023, HFCs segment accounted for a market share of around 60% and is projected to grow significantly by 2032. Despite the push for environmentally friendly alternatives, the continued use of HFCs in legacy data center cooling systems is driving market demand. Many existing data centers are built around HFC-based systems, which are well-understood and have established supply chains. Transitioning to new refrigerants can be cost-prohibitive and technically challenging for these facilities. As a result, the demand for HFCs persists, driven by the need to maintain and service these legacy systems. Additionally, incremental improvements in HFC formulations to reduce their environmental impact without requiring a complete system overhaul further support their ongoing usage in the market.
 

Based on data center, the market is divided into enterprise, colocation, cloud, and hyperscale. In 2023, the enterprise segment accounted for a market share of around 39%. The increasing need for energy efficiency and cost savings is driving the market growth of enterprise data centers. As enterprises look to optimize operational expenses and enhance their energy efficiency, they are adopting advanced cooling systems that utilize refrigerants with superior thermal properties. These systems help reduce energy consumption and lower cooling costs, which is critical for maintaining the profitability and operational effectiveness of enterprise data centers. The shift towards refrigerants that improve cooling efficiency and align with energy management strategies is driving growth in the market for enterprises.
 

North America dominated the global data center refrigerant market with a major share of over 35% in 2023. The rapid adoption of AI and machine learning technologies in the U.S. & Canada is driving the market growth of data center refrigerants. These technologies require high-performance computing environments, leading to increased heat output. To manage this effectively, data centers are turning to advanced refrigerants that support efficient cooling solutions. The need to maintain optimal operational conditions for AI-driven workloads drives demand for innovative refrigerants and cooling technologies in North American data centers.
 

The European Union's focus on reducing greenhouse gas emissions and improving energy efficiency is pushing data centers to adopt refrigerants with lower global warming potential (GWP). This regulatory pressure encourages the use of eco-friendly refrigerants and advanced cooling technologies, accelerating market growth as data centers strive to comply with sustainability goals and regulatory standards.
 

Data Center Refrigerant Market Share

Honeywell and Chemours are the major market players operating in the global market accounting for over 40% of market share in 2023.  Honeywell is developing low-GWP (Global Warming Potential) refrigerants tailored for data center cooling applications. Their product portfolio includes refrigerants such as HFO-1234yf and HFO-1234ze, which offer superior thermal efficiency and reduced environmental impact compared to traditional refrigerants. Also, Honeywell engages in strategic partnerships with cooling system manufacturers and data center operators to integrate their refrigerants into advanced cooling technologies, enhancing their market presence and application scope.
 

Chemours offers a range of low-GWP refrigerants, such as the Opteon series, designed for high-efficiency cooling in data centers. Their products are engineered to meet the evolving needs of the data center industry while minimizing environmental impact. Chemours leverages its global footprint to cater to data center markets across North America and Europe. Their extensive distribution network and local support enhance their ability to address regional regulatory requirements and market needs effectively.
 

Data Center Refrigerant Market Companies

Major players operating in the industry are:

• 3M
• Arkema
• Asetek
• Climalife
• Daikin Industries
• Dow
• Honeywell International
• M&I Materials
• Orbia
• The Chemours Company
   

Data Center Refrigerant Industry News

• In January 2024, Modine announced its acquisition of the intellectual property and distinct assets of TMG Core. TMG Core specializes in single- and two-phase liquid immersion cooling technology tailored for data centers with demanding high-density computing needs.
   
• In June 2023, Airedale inaugurated its inaugural U.S.-based data center cooling service team, delivering continuous on-site support for data center clients. This team offers spare parts coverage, scheduled maintenance, and rapid emergency response, providing crucial reassurance during critical moments.
   

The Data Center Refrigerant Market research report includes in-depth coverage of the industry with estimates & forecast in terms of revenue ($Mn) from 2021 to 2032 for the following segments:

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Market, By Refrigerant

• HFCs
  • R-134A
  • R-404A
• HFOs
• Others

Market, By Data Center

• Enterprise
• Colocation
• Cloud
• Hyperscale

Market, By Cooling

• Air cooling
• Liquid cooling
• Free cooling

Market, By Application

• IT cooling system
• Facility cooling system

Market, By End-Use

• BFSI
• IT and Telecom
• Government and Defense
• Healthcare
• Energy
• Manufacturing
• Retail
• Others

The above information is provided for the following regions and countries:

• North America
  • U.S.
  • Canada
• Europe
  • UK
  • Germany
  • France
  • Italy
  • Spain
  • Netherlands
  • Rest of Europe
• Asia Pacific
  • China
  • India
  • Japan
  • South Korea
  • ANZ
  • Southeast Asia
  • Rest of Aisa Pacific 
• Latin America
  • Brazil
  • Mexico
  • Argentina
  • Rest of Latin America 
• MEA
  • UAE
  • Saudi Arabia
  • South Africa
  • Rest of MEA