EXTERNAL WALL INSULATION BOARD MARKET SIZE AND SHARE ANALYSIS - GROWTH TRENDS AND FORECASTS (2023 - 2030)

The external wall insulation board market size is expected to reach US$ 14.9 Mn by 2030 from US$ 8.5 Mn in 2023, exhibiting a compound annualgrowth rate (CAGR) of 8.3% during the forecast period.

External wall insulation boards are sheets of insulation materials that are affixed to the exterior walls of a building to enhance thermal efficiency and reduce heat loss. They provide benefits such as improved indoor comfort, reduced energy bills, prevention of moisture ingress and mold growth, and lower carbon emissions. The growth is driven by rising energy costs, government regulations on building energy efficiency, and increasing adoption of green buildings.

The external wall insulation board market is segmented into  material type, end-use sector, application, and region. By material type, the market is segmented into mineral wool, expanded polystyrene, extruded polystyrene, polyurethane foam, phenolic foam, and others. Mineral wool is expected to dominate the material segment due  to its high fire resistance and thermal performance.

External Wall Insulation Board Market Regional Insights

• North America is expected to be the largest market for external wall insulation board market during the forecast period, accounting for over 45% of the market share in 2022. The growth of the market in North America is due to stringent building codes and policies focusing on enhancing energy efficiency of buildings in the region.
• The Europe market is expected to be the second-largest market for external wall insulation board market, accounting for over 35% of the market share in 2022. The growth of the market in the region is due to government regulations like the Energy Performance of Buildings Directive, which mandates energy efficiency in buildings.
• The Asia Pacific market is expected to be the fastest-growing market for external wall insulation board market, with a CAGR of over 15% during the forecast period. The growth of the market in Asia Pacific is due to rapid urbanization and increasing construction activity, especially in emerging economies.

Figure 1. External Wall Insulation Board Market Share  (%), by Region, 2023

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External Wall Insulation Board Market Drivers

• Government regulations for energy efficiency: Energy efficiency has become a top priority for governments worldwide. Various regulations and policies are being implemented to reduce energy consumption in the building sector, which accounts for around 40% of global energy usage. Stringent building codes mandating the use of insulation in new constructions as well as existing buildings are driving the external wall insulation board market. For instance, the European Performance of Buildings Directive requires all new buildings to be nearly zero-energy by the end of 2020. Similar regulations like LEED in the U.S. and BREEAM in the U.K. are also catalyzing the adoption of insulation boards. For instance, United Nation Industrial Development Organization published in many countries, buildings consume more energy than transport and industry. The International Energy Agency (IEA) statistics estimate that globally, the building sector is responsible for more electricity consumption than any other sector,42 per cent.
• Rising energy costs: The continuous rise in electricity and gas tariffs globally is making energy-efficient buildings more attractive. External wall insulation can help in reducing heat loss through building envelopes, thus lowering energy consumption for heating/cooling by up to 50%. With energy prices forecasted to increase further, energy savings will be a key factor driving the installation of insulation boards in residential and commercial buildings. Moreover, increasing consumer awareness regarding the long-term cost benefits is boosting product adoption. For instance, International Energy Agency in 2023, publish that the cost increases were more moderate in countries with regulated tariffs and long-term fuel supply agreements (oil-indexed LNG, long-term contracts or fuel supply contracts), and the regions dependent on short-term markets for fuel procurement were severely affected. In particular, record-high LNG prices led to difficulties for South Asian countries trying to procure gas for the power sector, which contributed to blackouts and rationing of electricity in the region. If prices of energy commodities remain elevated, fuel procurement will continue to be a serious issue for emerging and developing economies.
• Growth in construction sector: The steady growth of the global construction industry is fueling the external wall insulation board According to industry estimates, the volume of construction output will increase by 85% to US$15.5 trillion worldwide by 2030, with countries like China, U.S. and India leading the way. Along with new building construction, rising investments in building renovations and retrofits to improve energy efficiency is also driving insulation board sales. The easy installation and high efficiency of external wall insulation boards make them ideal for new construction as well as renovation projects.
• Lower environmental impact: External wall insulation boards are manufactured using materials like foam, wood fiber, mineral wool, and others which have much lower embodied energy and carbon emissions as compared to conventional insulation materials. Growing environmental awareness among consumers and mandates on reducing buildings' carbon footprint are increasing the adoption of eco-friendly insulation boards. Moreover, most insulation board types can be recycled, resulting in less construction waste. The environmental benefits of external wall insulation boards are thus enhancing their market growthFor instance as per Climate Change Performance Index 2023 published by Germanwatch non-profit, the construction industry accounted for 35-40% of total direct energy-related CO2 emissions globally in 2020. Switching to sustainable insulation solutions can thus go a long way in helping countries achieve their climate change mitigation targets.

External Wall Insulation Board Market Opportunities

• Emerging new applications: While external wall insulation boards dominate the building insulation sector, new application areas are emerging. Rising adoption in the marine and offshore industry for insulating ship hulls and offshore oil & gas platforms represents a lucrative opportunity. The automotive sector is also utilizing insulation boards for temperature control in truck bodies and railway transport. Furthermore, underfloor insulation for residential and commercial spaces is gaining traction. Product manufacturers can gain an edge by developing boards targeted for these niche applications. For instance as per The International Energy Agency predicts the global building sector's energy use must be reduced by 30% by 2030 from 2015 levels to achieve climate change mitigation. (International Energy Agency, 2020) Widespread adoption of external wall insulating boards with improved insulation properties through innovative new materials is crucial to meet these emission reduction targets in the coming years
• Rapid urbanization in developing countries: Developing economies like India, Brazil, Indonesia, and others are undergoing rapid urbanization, with mass migration to cities. This is resulting in an exponential growth in residential and commercial building construction to accommodate the rising urban populace. Though insulation material adoption remains low , huge potential exists due to the massive development pipeline and improving consumer awareness. Companies can gain a first-mover advantage by entering these untapped markets which will drive future industry growth. For instance, according to UN Habitat, it is estimated that over 90% of population growth over the next three decades will be absorbed in urban areas in these regions. With more people living in closer proximity in urban centers, the demand for thermally efficient and soundproof construction materials will rise substantially.
• Technology advancements: Investments in research and development (R&D) to develop innovative insulation materials is creating lucrative growth avenues . For instance , under the European Union's "Fit for 55" plan, all new buildings must be zero-emissions by 2030 (European Commission, 2021). This will generate substantial demand for wall insulation materials.
• Supportive government policies: Many governments are rolling out financial incentives and rebate programs aimed at enhancing insulation adoption by homeowners and businesses. Tax credits, subsidies, and low-interest loans for retrofitting existing buildings with insulation help in overcoming initial cost barriers. Government backing for R&D initiatives related to advanced insulation materials also encourages further product innovations. Such policy measures and public funding assistance will bolster growth for external wall insulation boards. For instance, according to the report published by the ICAEW in 2022, the Energy Company Obligation (ECO) is a government energy efficiency scheme, focused on tackling fuel poverty and carbon-emissions reduction. Medium and larger energy suppliers fund the installation of energy efficiency measures in U.K. homes. Each “obligated supplier” has an overall target based on its share of the domestic energy market. The scheme was launched in April 2013 and the latest policy, ECO4, is due to start soon and covered a four-year period until March 31, 2026. The ECO extension is backed by groups including the Sustainable Energy Association, Construction Leadership Council, National Insulation Association and EDF.

External Wall Insulation Board Market Trends

• Shift towards green buildings: Sustainability has become a priority in the building sector, with ‘green buildings’ gaining immense popularity. These sustainable structures emphasize energy efficiency, renewable energy usage, water conservation, waste reduction, and others. External wall insulation is a key component to enhance a building's energy performance and achieve green certifications like LEED and BREAAM. The shift towards environmentally-friendly green buildings is thus propelling insulation board deployment. Incentives for green construction by governments are further accelerating this trend. For instance as per study published by the Department of Energy in 2022, residential and commercial buildings in the US are estimated to reduce their annual carbon footprint by 15-20% through improved wall insulation .
• Innovation in insulation materials: Manufacturers are investing significantly in developing advanced insulation materials to gain a competitive edge. Aerogels, nano-enhanced boards, bio-based foams, dynamic insulation with PCMs and others provide superior thermal performance compared to conventional options. R&D into novel materials like graphene, vacuum insulated panels (VIP) is also underway. Customers get a broader range of high-tech, eco-friendly choices. Focus on product innovation is hence a major trend in the external wall insulation board industry . For instance the State of California Department of General Services specifies the use insulation boards made from recycled denim and cotton fibers for external wall insulation in government buildings. Such eco-friendly innovations are gaining rapid acceptance driven by numerous state and local government initiatives incentivizing sustainably constructed buildings.
• Focus on thermal comfort: Thermal comfort is becoming an important aspect of building design. Insulation boards not only reduce heat loss during winters but also provide cooling and moisture control benefits. This enhances occupants' comfort levels and productivity. With rising temperatures due to climate change, maintaining comfortable indoor conditions is crucial. Specifiers, are thus selecting insulation boards based on their ability to deliver year-round thermal comfort. This key trend is expanding product adoption beyond just energy savings.For instance as per statistics from the Department of Energy in the United States, uninsulated buildings can transfer up to 25% more heat across walls than insulated structures. Proper wall insulation can lowerannual heating and cooling costs by up to 30%
• Prefabrication techniques: Offsite prefabrication of building modules with integrated insulation is gaining momentum. It provides benefits like faster construction, lower costs, consistent quality, and reduced wastage. External wall insulation board installations are easier and more efficient with prefab components. This trend towards prefabricated buildings with ‘baked-in’ insulation is fostering market growth. It is especially prevalent in regions like the U.S. and Scandinavia where prefab accounts for a major share of new construction. For instance,. research from the US Census Bureau shows residential construction projects adopting more off-site construction techniques have seen labor costs reduced by up to 25% compared to traditional methods.

External Wall Insulation Board Market Restraints 

• High product and installation costs: The high upfront cost of purchasing and installing external wall insulation boards deters many customers, especially in developing countries and cost-sensitive sectors like residential. Though insulation lowers long-term energy bills, the initial investment is very high. Additional expenses for specialized labor and equipment also add to the cost. This acts as a major barrier, thus limiting adoption despite the benefits. Manufacturers need to focus on reducing production expenses to make insulation boards more affordable. For instance, according to data provided by the European Union, the average external wall insulation project costs between( €50-80) per square meter, making it much pricier than conventional building methods.

Counterbalance: The key market players should focus on reducing the production expenses associated with the insulation boards, to make it more affordable.

• Low consumer awareness: Low consumer awareness among homeowners and small building owners regarding the merits of external wall insulation and its long-term cost savings is a major restraint, especially in developing markets. Many customers view insulation as an unnecessary added expense rather than an investment. Effective educational marketing is essential to demonstrate the value proposition of insulation boards in reducing energy consumption and enhancing comfort. This can help broaden adoption beyond large industrial and commercial projects. For instances according to a 2022 survey conducted by the Department of Energy in India, over 70% of homeowners in major cities said they had little to no knowledge about the External Wall Insulation systems

Counter balance:  educational campaigns that inform consumers and professionals in the construction industry about the benefits of EWI boards can increase awareness and lead to greater market adoption

• Shortage of skilled labor: Installation of external wall insulation requires specialized skills like precision cutting, adhesive application, mechanical fastening, plastering/cladding, and others. But the industry faces a severe shortage of such trained labor. This acts as a limitation since incorrectly installed insulation will not deliver the desired performance. The companies need to invest more in installer training programs and certification to expand the pool of skilled workers that can effectively implement external wall insulation projects. For instances, in 2021, according to a report by the U.K. Construction Industry Training Board, 76% of U.K. construction companies reported facing difficulties due to the skills shortage. Specific to insulation work, 50% firms lacked insulators. In Germany, the , in 2022, according to a report by the German Confederation of Skilled Crafts, predicted a shortage of around 250,000 skilled workers by 2026, mainly in construction and infrastructure works including insulation. Such data highlights how the skills shortage is a major hurdle for the market in these key regions.

Counter balance: companies can develop or sponsor comprehensive training programs to educate new and existing workers on the installation of EWI boards. Offering certifications upon completion can create a more skilled workforce.

• Low penetration in developing markets: While insulation board adoption is growing steadily in the developed world, developing economies still have very low usage. Lack of regulatory mandates, minimal public awareness, high product costs, and absence of technical skills make penetration difficult. However, developing nations will account for a major share of global construction in the near future. Overcoming these barriers in emerging markets should be a priority to unlock the full potential of the external wall insulation board industry. For instances, according to the International Energy Agency (IEA), space heating accounts for over 10% of total final energy consumption in countries like India, Brazil, and South Africa. However, less than 5% of residential and commercial buildings in these major economies have wall insulation.

Analyst view

The external wall insulation board market is expected to witness  steady growth over the next five years. Growing awareness about energy efficient building solutions and the need to reduce heating and cooling costs will drive greater demand for insulation boards that can insulate both new build and existing homes. Government regulations mandating higher energy efficiency standards for buildings also boost the insulation board sales. The market still faces challenges from availability of cheaper substitutes, like rigid polyurethane foam boards. Subdued growth in the commercial construction industry amidst weak macroeconomic conditions acts as a restraint.

Europe dominates the external wall insulation board market due to stricter energy efficiency norms and incentives for green building projects in countries like Germany, France, and the U.K. However, Asia Pacific is likely to witness the fastest gains and emerge as the new growth leader. This is because of the massive ongoing housing construction in China and India to meet the needs of their burgeoning populations. Government support for sustainable infrastructure in Asia will further steer demand upwards. Overall, with energy conservation becoming a priority globally, manufacturers have an opportunity to educate builders and homeowners on the performance and long-term savings delivered by insulation boards.

Recent Developments

New product launches

• Huntsman Corporation, a publicly traded global manufacturer and marketer of differentiated and specialty chemicals launched a new environmental product disclosure certified spray polyurethane foam insulation system to support sustainable building practices.Huntsman Corporation’s revenues were   approximately US$8 Mn in 2021.
• In January 2021, BASF introduced the Neopor BMB insulation board solution made from Neopor F5300 Plus to deliver enhanced fire protection. Neopor BMB is a leading manufacturer of expanded polystyrene (EPS) insulation materials with a presence across Europe, Asia, and North America. The company was founded in 1965, the company is headquartered in Frankfurt, Germany and employs over 2500 people globally. NEOPOR offers a wide range of EPS products used in the building and construction industry for applications such as external wall insulation, cavity wall insulation, compact insulation, concrete formwork insulation, and geofoam. Their core product line includes NEOPOR thermal insulation boards that provide high energy efficiency and durability. These boards have gained popularity in the external wall insulation market due to their ability to offer an insulation and vapor barrier in one, reducing installation time and costs for builders.
• In October 2020, Knauf Insulation launched ECOSE Technology in its glass mineral wool insulation portfolio to reduce binder-related formaldehyde emissions. Knauf Insulation, is a leading global manufacturer and supplier of insulation products and systems. Founded in Germany in 1932, the company has expanded globally and currently operates production facilities across Europe, North America, South America, Asia, and Africa.

Within the building insulation market, Knauf Insulation is a major player in the external wall insulation board segment. The company offers a wide range of insulated render systems and external thermal insulation composite systems (ETICS) that are designed to provide effective insulation for exterior walls. Knauf's insulation boards are made of mineral wool, a high performance material that helps regulate humidity and provide excellent thermal insulation properties

Acquisition and partnerships

• In January 2022, Kingspan acquired Logstor to expand its insulation solutions portfolio
• In August 2021, Rockwool partnered with Projektfabrik to drive the adoption of façade insulation solutions
• In December 2020, BASF acquired a 25% stake in Econic Technologies focused on sustainable polyurethane systems

Figure 2. External Wall Insulation Board Market Share (%), By End-Use Sector, 2023

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Top Companies in External Wall Insulation Board Market

• Saint-Gobain
• Kingspan
• Rockwool
• BASF
• Johns Manville
• Knauf Insulation
• Owens Corning
• Paroc
• Dow Building Solutions
• GAF Materials

Definition: External wall insulation boards refer to sheets of thermally insulative materials that are affixed to the outer walls of buildings. They enhance wall thermal resistance and prevent heat loss, thereby improving energy efficiency of buildings. These prefabricated boards are made by using materials like mineral wool, XPS, EPS, polyurethane foam, and others. External wall insulation lowers energy consumption for heating/cooling and reduces carbon emissions. It also provides added benefits such as weather protection, noise reduction, moisture control, and enhanced indoor comfort. The boards are commonly installed using bonding adhesives or mechanical fixings.

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