Data Center Refrigerant Market size was over USD 656.4 million in 2024 and is estimated to reach USD 1.88 billion by the end of 2037, expanding at a CAGR of 9.2% during the forecast timeline, i.e., 2025-2037. In 2025, the industry size of data center refrigerant is estimated at USD 716.7 million. The exponential growth in data sharing and storage industry is fueling the demand for advanced cooling systems. The number of data centers is increasing due to the integration of cloud computing and big data analytics technologies. According to a report published by the U.S. International Trade Commission, in May 2021, the total number of data centers worldwide accounted to be 8000. The number is predicted to grow rapidly with technological advancement in every industry.
The rising demand in the data center refrigerant market is inspiring global leaders to focus on developing more efficient cooling systems. They are concentrating on introducing innovation in this sector. In February 2020, Honeywell launched a new e-cooling heat transfer cooling agent, Solstice for electronics in data centers. The custom facility sup-scales data storage through AI while reducing energy usage and CO2 emissions. Such developments further propel the need for advanced energy recovery systems such as refrigerating solutions. The shift towards low-GWP refrigerants is promoting sustainability through these improved cooling systems and helping this industry align with environmental regulations.
Growth Drivers
Challenges
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Base Year |
2024 |
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Forecast Year |
2025-2037 |
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CAGR |
9.2% |
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Base Year Market Size (2024) |
USD 656.4 million |
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Forecast Year Market Size (2037) |
USD 1.88 billion |
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Regional Scope |
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Refrigerant (HFCs, HFOs)
HFCs segment is set to hold more than 59.8% data center refrigerant market share by 2037. Despite being scrutinized for their impact on global warming, the continuation of legacy systems has driven steady growth in this segment. Rapid adoption to an extent and high cooling efficiency have made HFCs the first choice for data centers. However, the high GWP is forcing suppliers to upgrade the formulation and cooling systems to make them less harmful. New energy and cost-efficient reagents are being utilized to deliver similar performance as conventional HFCs. The transition is expected to change the shape of the market significantly in upcoming years.
Data Center (Enterprise, Colocation, Cloud, Hyperscale)
In terms of data centers, the enterprise segment in the data center refrigerant market is expected to show remarkable growth by the end of 2037. The increasing need for optimized and cost-effective management of large-scale data is fostering greater investment opportunities in this segment. Enterprises are flexible to participate in the transition towards low-GWP cooling technologies. This further inspires the industry to invest in research and development of eco-friendly solutions. Enterprises are now partnering with tech companies to install cooling systems for their data center. For instance, in June 2024, Hewlett Packard Enterprise partnered with Danfoss to develop modular data centers.
Our in-depth analysis of the data center refrigerant market includes the following segments:
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Refrigerant |
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Data Center |
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Cooling |
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Application |
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End use |
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North America Market Analysis
North America in data center refrigerant market is poised to capture around 37.1% revenue share by the end of 2037. The swell of this regional industry is propelled by technological development. Government authorities are also contributing to innovative energy-efficient cooling technologies for data centers. In December 2023, NREL participated in making efforts of USD 40 million to enhance data center cooling efficiency. The research facility plans to develop COOLERSHIPS, reducing the CO2 footprint in data processing systems. The new generation cooling technology holds the ability to reduce energy expenditure in these institutions by 5%.
The U.S. is augmenting the data center refrigerant market with its significant growth in the data management industry. According to the report published by NTIA, in November 2024, the country is home to more than 5000 data centers. The demand is predicted to increase by 9% through 2030. The boom in this industry is inspiring companies to develop new technologies to improve the performance of cooling systems. For instance, in July 2024, Airedale by Modine launched Cooling System Optimizer in the U.S. to integrate intelligent control in chilled water systems. The innovations are supporting the initiative to upgrade refrigerants, delivering optimized energy utilization.
Canada is also growing at a notable rate to lead the data center refrigerant market by the end of 2037. Policies, favorable taxation, and subsidies issued by the government of America have influenced the industry to succeed in global competition. The American Innovation and Manufacturing Act, issued in 2020, restricted the usage of HFC. According to the law, the allowed production and consumption of HFC must be reduced by 30-60% in 2024. These regulations are not only limiting the greenhouse effect but also broadening the scope of sustainable solutions. Additionally, availing alternative options to obtain regulatory compliance.
APAC Market Statistics
The Asia Pacific data center refrigerant market is also growing to generate a large revenue in upcoming years. Rapid urbanization and digitalization are surging demand for technologically advanced cooling systems. Japan, India, and other developing countries are individually driving the focus on low-carbon transformation. In May 2024, the ASEAN Centre for Energy and Huawei released a plan to build a next-generation data center facility. The plan further proposed adopting a high-temperature chilled fan wall solution to improve cooling systems. Private and public governing bodies are also collaborating to reduce PUE and carbon emissions, creating opportunities for innovation.
India is creating lucrative investment opportunities for the data center refrigerant market due to increasing demand for data storage and processing. The proliferation of digital services, cloud computing, and big data analytics is driving the need for more data centers. According to an IBEF report published in June 2023, India’s data center industry accounted for USD 4.4 billion in 2020. The push toward sustainability is increasing the demand for alternative refrigerants. Enhanced efficiency of cooling systems is helping data centers to reduce operational costs, alluring the technological advancements for market expansion.
China is focusing on the expansion of cloud services to support the trend of developing domestic connectivity and communication networks. This further pushes the need for efficient data management, establishing the scope for data centers. Thus, the demand is enlarging for the data center refrigerant market. Environmental commitments, published by governments are forcing the transition to a new technology for data centers. The country is considering it as an opportunity to outstretch its product reach for less carbon emission. Additionally, gaining traction for the production of environment and budget-friendly cooling systems.
Expanding R&D to acquire the goal of global sustainability is changing the dynamics of the data center refrigerant market. Key players are innovating environment-friendly substances to align with changing consumer preferences. Leaders of the data center industry are also supporting the concept by maximum adoption. For instance, In February 2023, Kio became the first data center in Spain to invest in 100% ecological refrigerants. The geothermal energy-based refrigerant was utilized for 100% of the total critical cooling systems. These innovations are further broadening the pathway of energy efficiency in all data management and HAVC industries. Such key players in the market include:
Author Credits: Abhishek Verma
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