Hydrofluoroolefin Market Size, Share, and Growth Forecast for 2024 - 2031

Hydrofluoroolefin Market Size and Share Analysis

The global hydrofluoroolefin market is projected to witness a CAGR of 11.4% during the forecast period from 2024 to 2031. It is anticipated to increase from US$ 4.3 Bn recorded in 2024 to a staggering US$ 9.1 Bn by 2031.

Hydrofluoroolefins (HFOs) are unsaturated organic compounds similar to Hydrofluorocarbons (HFCs) with zero ozone layer depletion and low greenhouse gas emissions. They are a fourth-generation refrigerant in automotive, electrical appliances, and construction industries.

Demand for sustainable alternatives to HFCs is growing due to greenhouse gas emissions and ozone layer depletion. The market is being driven by energy-efficient refrigerants, high automotive adoption, and favorable regulatory policies.

Technological developments and new HFO blends are set to drive innovation and market growth. There is a shift toward low-warming potential refrigerants and strict regulations by governments and regulatory bodies.

Key Highlights of the Market

• The refrigerant industry is experiencing growth due to the surging demand for energy-efficient and eco-friendly HFOs in both commercial and domestic refrigeration systems.
• The automotive industry is increasingly utilizing HFOs for air conditioning systems, driven by the shift toward sustainable and efficient refrigerants.
• HFOs are favored due to their low GWP and zero ozone depletion potential, leading to strict environmental regulations promoting their use over HFCs.
• Continuous research and development in the field of HFOs is resulting in the creation of new and improved products with enhanced performance and environmental profiles.
• By 2031, the HFO-1234yf segment will likely dominate in terms of product type, witnessing 9.7% CAGR due to its low global warming potential and high energy efficiency.
• Based on application, the refrigerant segment is projected to witness a CAGR of 8.5% through 2031 due to rising adoption in air conditioning application.
• The U.S. is projected to dominate North America's market with a CAGR of 10.4% through 2031, driven by environmental regulations like the EPA's new alternatives policy.
• India in Asia Pacific is anticipated to capture a CAGR of 12.8% through 2031 amid increasing investments in research and development.

Market Attributes	Key Insights
Hydrofluoroolefin Market Size (2024E)	US$ 4.3 Bn
Projected Market Value (2031F)	US$ 9.1 Bn
Global Market Growth Rate (CAGR 2024 to 2031)	11.4%
Historical Market Growth Rate (CAGR 2019 to 2023)	16.8%

U.S. based Manufacturers Boost Integration of HFOs to Support Green Initiatives

In North America, the U.S. is anticipated to record a considerable CAGR of 10.4% through 2031. In the next ten years, the country is anticipated to account for a dominant share in the hydrofluoroolefin business because of strict environmental laws. Norms such as the EPA's Significant New Alternatives Policy (SNAP) Program are increasing demand for HFOs in the U.S.

Manufacturers present in the U.S. are estimated to boost the integration of HFOs in their HVAC systems and other such applications. For instance,

• In February 2023, Johnson Controls introduced York chillers using lower GWP refrigerants R454B and R1234ze in the U.S. It aims to phase down HFC refrigerants and improve efficiency in cooling computer equipment, servers, and data halls.

Research and Development in India Spurs Demand for Novel HVAC Innovations

In Asia Pacific, the hydrofluoroolefin market growth is estimated to rise in India, which is set to exhibit a CAGR of around 12.8% through 2031. Global players are likely to expand their operations in India backed by novel research and development endeavors along with a booming work force. For instance,

• To lessen their carbon impact by automating HVAC systems, Honeywell launched INNCOM Direct, an energy management solution for mid-market hotels, in August 2024.

Such innovative solutions aim to optimize energy use, reduce costs, and support environmental sustainability, highlighting the potential for technological developments to drive India. The dynamic growth trajectory of the market in India and Asia Pacific is highlighted by the mix of legislative backing, technical innovation, and rising demand. 

HFO-1234yf Tops the Market with Automobile Industry’s Transition to Sustainability

Category	CAGR through 2031
Product Type- HFO-1234yf	9.7%

Based on product type, the HFO-1234yf category is experiencing significant growth due to its widespread use in automotive air conditioning systems. This is because of its low GWP and high energy efficiency. Manufacturers in the automotive and electric appliance sectors are estimated to boost the production of products consisting of HFO-1234yf. For instance,

• Honeywell introduced its new HFO-1234yf refrigerant in July 2022 for Europe’s automotive aftermarket, aiming to reduce greenhouse gas emissions by over 50%. The product's demand is boosted by rising sales of electric and hybrid vehicles, particularly in China.

The HFO-1234yf segment is anticipated to record a CAGR of 9.7% through 2031. The automobile industry's transition to more sustainable solutions and strict environmental requirements are the main drivers of the expansion.

HFO-laced Refrigerants to Remain Significant Owing to Reduced GWP

Category	CAGR through 2031
Application- Refrigerant	8.5%

By 2031, the refrigerant application segment is projected to evolve at a CAGR of 8.5%. Due to their reduced Global Warming Potential (GWP) and environmental friendliness compared to conventional refrigerants, HFO refrigerants are becoming popular in air conditioning and refrigeration applications. For instance,

• Honeywell planned to spin off its HFO Refrigerators business in October 2024, forming an independent U.S. publicly traded company set to produce other chemical products by 2025.

The industry's transition to more environmentally friendly and sustainable solutions is highlighted by such advances. These also support the refrigerant segment's anticipated expansion in the global market.

Market Introduction and Trend Analysis

Hydrofluoroolefins (HFOs) are unsaturated organic compounds like HFCs used in fourth-generation refrigerants. They offer zero ozone layer depletion as well as low greenhouse gas emissions and are used in technical aerosols, insulation foam, and solvents.

To increase their market share, HFO producers use competitive pricing and technical developments. They also make significant investments in research and development to overcome obstacles and improve the quality of their products. A few HFO manufacturers across the globe are mainly controlled by patents and incentives.

European Union (EU) regulations, such as Registration, Evaluation, Authorization, and Restriction of Chemicals (REACH), apply to HFOs because of their short atmospheric life and environmental advantages. The need for sustainable alternatives is growing due to HFC’s deterioration of the ozone layer. Fourth-generation HFOs provide growth prospects and safer, more effective alternatives.

Regulations in the European Union and the U.S. mandate the phase-out of HFCs in automotive air conditioning units, presenting opportunities for HFOs. Derivatives of HFO-1234yf are already being used in small automobile chiller units due to their high return on investment.

The global HFO industry is rising due to continuous technological developments and product modifications. Manufacturing companies are introducing low-pressure and water cloud points for cost reduction and low-GWP HFOs. These have improved thermodynamic properties, enhancing their application in various production fields.

Historical Growth and Course Ahead

The global hydrofluoroolefin market recorded a whooping CAGR of 16.8% in the historical period from 2019 to 2023. Key producers in the chemical as well as construction industry invested in research and development activities to increase sales that were otherwise hampered by the pandemic.

In the observed period, the global industry giants encountered novel relations with regional players to boost production. For instance,

• In January 2022, Honeywell partnered with Navin Fluorine International to manufacture its Solstice range of hydrofluoroolefins (HFO) in India, starting production in 2022 at NFIL's Gujarat facility. The products, with no ozone depletion potential, aim to aid countries in transitioning to alternative HFOs.

Demand for hydrofluoroolefins is estimated to record a CAGR of 11.4% during the forecast period between 2024 and 2031. It will likely be driven by the implementation of SNAP Rule 20 in the U.S. and the European Union. The rule prohibits the use of HFC in air conditioners and stationary refrigeration applications.

Market Growth Drivers

Rising Concerns over Global Warming to Augment Demand

Increasing demand for sustainable and eco-friendly alternatives such as hydrofluoroolefins, a type of fluorinated olefin, is replacing hydrofluorocarbons in refrigeration, air conditioning, and aerosol propellants. This is due to their low warming potential and zero ozone depletion potential. It has further led to increased demand for environmentally sustainable refrigerants and growth in the HFO industry.

Due to their low GWP and zero ozone depletion potential, stringent environmental regulations promote the use of HFOs over HFCs. Manufacturers are estimated to invest in the research and development of sustainable alternatives that cater to this burgeoning demand. For instance,

• In December 2023, a study in the Proceedings of the National Academy of Sciences revealed that Hydrofluoroolefin (HFOs) can create fluoroform. It is a gas with 14800 times worse global warming potential than carbon dioxide. However, it has a lower potential than traditional chemicals.

Developments in Sustainable Foam Technology to Bolster Demand

Since Hydrofluoroolefin (HFOs) have no potential to deplete the ozone layer and have a minimal global warming potential, they are being utilized as blowing agents in the manufacturing of polyurethane foam. It is a common insulation option in the automotive and construction sectors. Companies are hence launching innovative products to keep up with the rising demand. For instance,

• Concentrol unveiled new silicone surfactants in December 2021 to assist manufacturers of polyurethane foam in developing eco-friendly products. These surfactants lessen the emissions of more than 35 million automobiles or 170 million metric tons of CO2e, into the environment. These were created following a great deal of research and development.

Increasing demand for energy-efficient and sustainable foam-blowing agents is driving growth in the market for HFOs, especially across the construction and automotive industries.

Market Restraining Factors

High Solubility and Ease of Breakdown May Limit Demand

Although they are a common propellant in a few systems, Hydrofluoroolefin (HFO) raises safety issues. It can irritate the skin, eyes, and throat due to its superior solubility and easy breakdown at high temperatures. The market expansion in the upcoming years may be impacted by this factor.

Concerns with flammability go beyond structures and equipment that might catch fire. HFO refrigerants such as HFO-1234yf and HFO-1234ze are classified as A2L safe. It indicates that they are flammable to a certain extent but have minimal toxicity.

A1 (non-flammable) HFOs exist, but further investigation and testing are required. HFOs have GWP values ranging from 150 to less than 1 since they are stable in systems but break down in the atmosphere after a few days.

Key Market Opportunities

Shift toward Eco-friendly Solutions in the Automobile Industry Creates Avenues

The automotive industry is increasingly using Hydrofluoroolefins (HFOs) as refrigerants in vehicle air conditioning systems due to their low GWP and zero ozone depletion potential. HFO-1234yf, developed by Honeywell and DuPont, is less flammable and has passed regulatory hurdles for vehicle use. For example,

• Honeywell introduced a new HFO-based refrigerant for Europe’s automotive aftermarket in July 2022, potentially reducing greenhouse gas emissions by over 50%. Rising demand for electric and hybrid vehicles, especially in China, is further fueled by increasing concerns of the environment.

The automotive industry's shift toward sustainable and environmentally friendly solutions is driving growth in the hydrofluoroolefin market.

Launch of HFO-infused Foam Creates Novel Prospects in Construction Sector

The construction industry is increasingly using Hydrofluoroolefin (HFO) as foam-blowing agents for insulation due to their low GWP and zero ozone depletion potential. It is especially evident in developing countries in Asia Pacific experiencing a boom in construction activities. For instance,

• Huntsman Building Solutions introduced HFO-based spray foam systems in September 2022. It offers improved performance and environmental benefits compared to traditional HFC-based systems for insulation and roofing applications. This shift reduces environmental impact and meets the growing demand for energy-efficient insulation materials.

Urbanization and rising demand for sustainable building techniques are predicted to drive growth in the Asia Pacific construction sector, thereby creating new opportunities.

Competitive Landscape for the Hydrofluoroolefin Market

Prominent players in the hydrofluoroolefin refrigerant industry are focusing on developing eco-friendly materials concerning poisonous gas emissions from refrigerants. They are creating insulation materials that meet stringent energy efficiency regulations and green building standards.

To meet customer needs, key corporations concentrate on product development, including resin-modified and user-friendly versions. Through acquisitions, improved distribution networks, and strategic alliances, they are also bolstering their market presence. The availability of substitute materials is putting more pressure on competitors, which compels businesses to constantly innovate to hold onto a large portion of the market.

Recent Industry Developments in Hydrofluoroolefin Market

• In September 2024, scientists from Zhejiang University, a China-based research group, developed zeotropic refrigerants, CO2, and HFO, to improve the performance of air-source heat pumps by 21%. This innovation reduces costs through industrial production and aids in phasing out traditional refrigerants.
• In March 2024, Great Dane, headquartered in the U.S., showcased its latest trailer technology solutions at the 2024 Technology and Maintenance Council Annual Meeting and Transportation Technology Exhibition. It featured Everest trailer insulation, Hydrofluoroolefin technology, and a Champion Composite dry van to reduce its environmental impact.
• In August 2023, Chemours, based in the U.S., launched Opteon 2P50, an HFO dielectric fluid designed for two-phase immersion cooling systems. This fluid has lower global warming potential and is anticipated to be brought to market in 2025. 

Hydrofluoroolefin Market Report Scope

Attributes	Details
Forecast Period	2024 to 2031
Historical Data Available for	2019 to 2023
Market Analysis	US$ Billion for Value
Key Regions Covered	North America Europe East Asia South Asia and Oceania Middle East and Africa Latin America
Key Market Segments Covered	Product Type Application End Use Region
Key Companies Profiled in the Report	Honeywell International Inc Arkema, Inc. The Chemours Company Central Glass Co. Danfoss Linde PLC Climalife (Dehon Group) AGC Chemicals Americas Inc. Beijing Yuji International Co., Ltd.
Report Coverage	Market Forecast and Trends Company Share Analysis Competitive Intelligence DROT Analysis Market Dynamics and Challenges Strategic Growth Initiatives
Customization and Pricing	Available upon request

Hydrofluoroolefin (HFO) Market Segmentation

By Product Type

• HFO-1234ze
• HFO-1233zd
• HFO-1234yf
• HFO-1336mzz
• Others

By Application

• Refrigerant
• Foam Blowing Agent
• Aerosol Propellant
• Solvent and Cleaning Agents
• Others

By End Use

• HVAC and Refrigeration
• Automotive Air Conditioners
• Building and Construction
• Personal Care and Consumer Products
• Electronics and Precision Cleaning
• Others

By Region

• North America
• Europe
• East Asia
• South Asia and Oceania
• Latin America
• The Middle East and Africa

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