Magnetic Refrigeration Market - Forecasts from 2022 to 2027

The magnetic refrigeration market is estimated to grow at a CAGR of 50.70% to reach US$295.346 million in 2027 from US$16.732 million in 2020. There has been a growing emphasis on limiting global warming to less than 2 degrees Celsius by 2100. To achieve this, approximately 200 countries recently agreed to dramatically reduce their reliance on climate change-causing chemicals called hydrofluorocarbons (HFCs) in air conditioning and refrigeration. This refrigerant has a significantly higher potential to cause global warming in comparison to the use of carbon dioxide. Hence, research and usage of greener alternatives have been gaining traction recently. Magnetic refrigeration has been witnessing a rapid increase in its popularity and is considered an ideal replacement for the conventional cooling and heating technology that is used in refrigerators and air conditioners. The technology is based on exotic materials such as gadolinium and dysprosium - that heat up when a magnetic field is applied to them and cool down when the magnetic field is removed. The potential of magnetic refrigeration to reduce energy use by approximately 30% is its most attractive feature and is expected to be the prime driver of the market. However, relatively higher production costs due to the scarce availability of magnetocaloric materials are the main challenge for the industry. Moreover, the large-scale fabrication process between the device and the equipment that is required to be refrigerated is yet to be optimized to attain maximum efficiency, which is also hindering its adoption.

Regional View

According to the Japan Refrigeration and Air Conditioning Industry Association, the global air conditioner demand has increased from 104,367 thousand units in 2013 to 110,971 units in 2018, with emerging Asian and oceanic countries like India, Vietnam, Philippines, Bangladesh, Indonesia, Australia, and New Zealand being the prime growth drivers.

The air conditioner demand in the Asian countries (excluding China and Japan) has grown at a CAGR of 5.42%, while the oceanic continent too has witnessed a similar CAGR between 2013-2018. The expanding middle-class sector as a result of growing urbanization has been instrumental in driving the HVAC industry.

Japan continues to hold its position on the list of the most developed economies in the world. A fast-paced lifestyle is one of the major factors shaping the growth of hospitality and supermarket infrastructure investment. Booming industries have not only been driving the economic engine of the country but have also been improving the living standards of people. As people's disposable income is high, socializing at restaurants is common. Furthermore, the presence of a good number of restaurants offering everything from a delightful ambience to good food has been contributing significantly to the increasing footfall, thus contributing to the market growth. The hotel industry continues to benefit from the strong position of the country in international business. A large number of people arriving in the country for business purposes is significantly contributing to the growth in hotel revenue. Thus, the growing hospitality industry and the simultaneous focus on controlling climate change are estimated to drive the magnetic refrigerant market growth in Japan. Similarly, in China, the growth of the market in this country is majorly attributed to the growing middle-class population on account of increasing wages, which is close to the solid economic growth the country has been witnessing due to the rapid growth of industries and a huge inflow of investments by industry players into various sectors. According to data from the Direct China Chamber of Commerce (DCCC), the middle-class population in China is expected to expand from 430 million in 2019 to 780 million by 2025. The increasing inclination of youth towards western culture is evident from the rapidly increasing footfall at restaurants, coffee houses, and bars across the country. According to DCCC, middle-class youngsters account for around 75% of the customers that restaurants, coffee houses, and bars cater to. To tap this immense growth potential, many restaurants, fast food, bar, and coffee house chains are making huge investments. According to data from the Direct China Chamber of Commerce, Starbucks is planning to double the number of its coffee shops in China from around 3,300 now to over 6,000 over the next five years. This scenario was expected to continue driving the market growth in the country from 2020 to 2025. Thus, China is estimated to possess the largest addressable market, with great potential for the clean technology estimated to be unlocked in the country.

Key Developments in the Market:

• The ongoing exhaustive studies to develop innovative and sustainable refrigerators with magnetocaloric technology are expected to propel market growth.
• In March 2020, an exhaustive study report on this promising technology-magnetocaloric-which could be the next generation of refrigeration and cooling was published by researchers from the Oak Ridge National Laboratory and CEMAC (Clean Energy Manufacturing Analysis Center).
• In December 2021, Virginia Commonwealth Fund invested in Stephen Fong's project of designing and developing a modular refrigerator. The core of this eco-friendly modular refrigerator is magnetic refrigeration technology. The main objective of Stephen Fong is to develop a sustainable long-term refrigeration solution.

COVID-19 Impact:

COVID-19 had a negative impact on the Magnetic Refrigeration Market. The surge of infected cases led to quarantine and the complete closure of public facilities. The closure of restaurants and food outlets along with the production facilities has led to decreased demand and productivity. Consequently, the market growth slowed down.

Market Segmentation:

• By Application

Refrigerator

Beverage Coolers

Display and Ice cream cabinets

Air Conditioning

• By End-User

Residential

Commercial and Industrial

• By Geography

Americas

Europe Middle East and Africa

Asia Pacific