INDUSTRIAL COOLING SYSTEMS MARKET SIZE AND SHARE ANALYSIS - GROWTH TRENDS AND FORECASTS (2024-2031)

Industrial Cooling Systems Market Size and Trends

The Global Industrial Cooling Systems Market is estimated to be valued at US$ 20.15 Bn in 2024 and is expected to reach US$ 32.21 Bn by 2031, exhibiting a compound annual growth rate (CAGR) of 6.9% from 2024 to 2031.

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One of the major trends in the industrial cooling systems market is the rising adoption of energy-efficient and eco-friendly cooling systems. With growing environmental concerns and stringent regulations regarding carbon emissions, companies operating in industries such as power generation, automotive, and oil & gas are incorporating green technologies in their existing infrastructure. Other factors driving the demand include rapid industrialization in developing countries of Asia Pacific and Latin America and the increasing need for process cooling in industries.

Global industrialization and rising temperatures

With rapid industrialization occurring all over the world, especially in developing economies, there is increased demand for various industrial operations and manufacturing activities. A wide range of industries like oil and gas, power generation, food and beverage, chemicals and petrochemicals among others have seen substantial growth in their production volumes. All these industries require uninterrupted operations and any shutdown causes huge financial losses. At the same time, global warming has caused rising temperatures in several parts of the world. High ambient temperatures pose serious challenges for continuous operations in many industries. It can cause overheating of machines and industrial equipment, which can further lead to technical faults and failures.

For instance, in May 2023, Delta T Systems, a leading provider of innovative process cooling solutions, announced the launch of its latest product - the Free Cooling System. This high-performance free cooler, also known as a fluid cooler or dry cooler, is designed to deliver energy-efficient cooling for a wide range of industrial and commercial applications. 

Market Concentration and Competitive Landscape

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Strict environmental and energy efficiency regulations

Authorities in many countries have introduced stringent regulations regarding carbon emissions, energy efficiency and waste heat recovery in industries. Failure to comply with such norms can attract hefty penalties. This has motivated industries to focus more on sustainable manufacturing practices. One of the focus areas is on upgrading their cooling infrastructure to newer energy efficient technologies. Regulations mandate monitoring and reporting of key performance indicators like power usage effectiveness (PUE) of data centers. Advancements in cooling engineering have enabled the development of greener solutions like fluid coolers, evaporative condensers and adiabatic condensers which provide comparable cooling with lower energy consumption compared to conventional equipment. Industries are also exploring possible reuses of waste heat from cooling systems to further boost energy savings. Compliance to regulatory driver forces industries to periodically retrofit existing conventional cooling systems with improved eco-friendly alternatives having lower total owning cost in long-run. Therefore, the evolving regulatory landscape has become a critical factor fuelling investments in next-gen industrial cooling technologies globally.

Key Takeaways from Analyst:

Drivers such as increasing industrialization activities and rapid urbanization in developing countries will boost the demand for efficient cooling systems from various end-use industries. Further, stricter regulations regarding energy efficiency and cooling system performance will also propel the market forward.

However, high initial investment costs associated with industrial cooling systems may hinder the growth of the market to some extent. Also, the complex design and maintenance requirements of large cooling systems pose operational challenges for manufacturers.

The market is expected to witness prominent opportunities from growing demand for eco-friendly and sustainable cooling solutions. Advancements in cooling technology focusing on energy efficiency, cost reduction, and minimal environmental impact will support the development of innovative products.

Market Challenges: Fluctuating prices of raw materials

The fluctuating prices of raw materials have created uncertainties which are restraining the growth of the global industrial cooling systems market. Raw materials like metals, plastics and other resources required for manufacturing cooling towers, chillers, cooling fluids etc are experiencing inconsistent price trends in the recent years. Unpredictable commodity prices make planning difficult for manufacturers as their production costs become unstable. They find it challenging to adequately factor in raw material costs while bidding for projects or quoting prices to customers. This affects their margins and competitiveness in the market.

Suppliers of these raw materials also face issues in optimum capacity utilization of their plants when the demand suddenly declines due to high prices. As a result, component manufacturers suffer due to inconsistent supply which disrupts their production schedules. Projects get delayed and customers have to bear the brunt of escalating costs and late commissioning. This creates dissatisfaction in the market.

Market Opportunities: Adoption of renewable energy-based cooling systems

Adoption of renewable energy-based cooling systems can be a great opportunity in the global industrial cooling systems market. As industrialization is rising rapidly across the world, the need for efficient and sustainable cooling solutions for industrial facilities is growing tremendously. At the same time, concerns around carbon emissions and climate change are also mounting. This provides a perfect setting for transitioning to renewable energy powered industrial cooling systems.

Renewable energy sources like solar, wind and geothermal can be effectively utilized to power various industrial cooling equipment like chillers, cold rooms, and refrigeration systems. Many countries now get 20-30% of their power requirements from renewable sources on average annually. This clean power can be easily diverted to handle a major portion of industrial cooling load as well. Some industries like data centers have already adopted novel solutions that use outdoor air economization and free cooling enabled by renewable energy to achieve more than 60% annual savings in cooling costs.

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Insights, By Type: Evaporative Cooling System segment is dominating through efficiency

In terms of Type, Evaporative Cooling System contributes the 35.4% share of the market in 2024 owing to its unparalleled efficiency and cost-effectiveness.

Evaporative cooling systems leverage the principle of evaporation to provide cost-effective cooling solutions for industrial facilities. By passing air through water pads or mediums, these systems lower air temperature, resulting in significant energy savings compared to conventional cooling technologies. This sustainable and eco-friendly approach places minimal strain on electrical infrastructure, making it an attractive option for businesses seeking to optimize their cooling needs while minimizing environmental impact.

The energy efficiency of evaporative cooling systems has made them a popular choice across various industries. They are extensively utilized in manufacturing facilities, power plants, data centers, and other settings that require continuous, large-scale cooling without incurring substantial capital and operational expenditures. The marginal cost of operation through water and minimal power requirements allows for strong returns on investments, while also reducing the carbon footprint of industrial activities.

The simplicity of design and low maintenance needs of evaporative cooling systems further enhance their appeal. These systems have a long functional life with minimum repairs or upgrades needed over extended usage, keeping overall ownership costs very low even for large industrial cooling loads. Varied configurations allow for customized installations tailored to specific industrial needs, making evaporative cooling a versatile and cost-effective solution for businesses seeking to optimize their cooling infrastructure.

Insights, By End-use: Industrial Manufacturing segment is dominating through manufacturing muscle

In terms of End-use, the Industrial Manufacturing segment contributes the 34.7% share of the market in 2024 owing to its massive cooling infrastructure needs.

Industrial manufacturing encompasses vast production capabilities across diverse industry verticals. It involves energy-intensive operations and large plants that generate significant heat loads. Effective thermal management through industrial cooling systems is crucial to ensure optimal production outputs, product and personnel safety, and quality standards compliance.

The scale and complexity of manufacturing processes necessitate substantial capital investment in cooling infrastructure. A seamless, reliable and efficient cooling network is paramount considering the enormous costs of any production downtimes. It is a strategic imperative for manufacturing facilities to implement cooling solutions best suited to their operational requirements and budgets.

Given the large plant sizes and round-the-clock production schedules typical of manufacturing industries, existing cooling infrastructures also require frequent capacity enhancements, retrofits, replacements and maintenance works. This produces healthy recurring demand streams.

Manufacturing is one of the biggest economic engines and employment generators. The sector will continue its development across developed and emerging industrial bases globally. This ensures a stable long-term prospect for cooling system suppliers to tap growing needs for new installations as well as aftermarket services from this End-use group.

Constant technological advancements and automation in manufacturing are also boosting the incorporation of highly specialized cooling systems for mission-critical production assets, quality control labs, precision machinery, etc., opening new markets.

Regional Insights

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North America has established itself as the dominant regional market for industrial cooling systems with 37.6% share in 2024. This can be attributed to the strong presence of manufacturing and process industries in the region that require highly efficient and reliable cooling solutions. Major industrial economies like the U.S. and Canada have a large installed base of systems across sectors such as oil and gas, petrochemicals, automotive, and food and beverages.

The region is also a major exporter of finished industrial goods as well as components for cooling systems. Leading cooling system providers are headquartered in North America and they actively focus on serving the regional demand as well as expanding exports. Moreover, North America is quick to adopt the latest technologies and innovations in industrial cooling. Ongoing investments in research and development of advanced systems has enabled companies in the region to maintain technology leadership.

On the other hand, Asia Pacific has emerged as the fastest growing regional market. Booming manufacturing industries, rising export volumes, and rapid industrialization across developing nations are driving the demand for industrial cooling. Countries like China, India, Indonesia, and Vietnam have witnessed tremendous capacity additions in core process industry verticals over the past decade. This has boosted the requirements for cooling systems to support both existing and upcoming production facilities.

Major global component suppliers have also established production bases in Asia to cater to the growing local needs. This has made industrial cooling solutions more widely available and affordable in the region. Additionally, favorable government policies focused on promoting domestic manufacturing are encouraging industries to invest in high-performance cooling infrastructure. The availability of low-cost manpower and attractive operating environment further accelerates the adoption of cooling systems.

Market Report Scope

Key Developments

• In October 2023, ThermalWorks, a subsidiary of Endeavour focused on sustainable data infrastructure, announced the global launch of its advanced, waterless cooling system designed to meet the evolving needs of the data center industry. The ultra-efficient, modular technology is poised to transform traditional data center operations by dramatically reducing energy consumption and eliminating water usage for cooling.
• In September 2023, DENSO CORPORATION announced the launch of "Everycool," an innovative cooling system designed to provide comfort and energy efficiency for commercial vehicles when the engine is not running. The system aims to improve working conditions for truck drivers during hot weather while reducing environmental impact and promoting efficient energy utilization by lowering fuel consumption.
• In September 2020, SPX Cooling Technologies introduced Marley BasinGard filters for cooling towers, helps maintain the flow of the hot water basin in cooling towers by capturing mineral scale, pipe rust, fibers, and other debris. The filter, which is made of a patent-pending nylon material infused with a silver-based biocide, is held in place by a stainless-steel grid and helps prevent these contaminants from reaching downstream components like the cooling tower fill, pump impellers, and heat exchangers.

*Definition: The global industrial cooling systems market consists of systems and equipment that are used for cooling industrial environments, processes, and applications. Industrial cooling systems play a vital role in various industries such as power generation, manufacturing, petrochemical and oil & gas by removing excessive heat and maintaining optimum operating temperatures. They include evaporative cooling towers, air conditioning condensers, chillers, cooling towers, heat exchangers and other units that regulate industrial temperatures for smooth and efficient functioning of operations.

Market Segmentation

• Type Insights (Revenue, US$ Bn, 2019 - 2031)
  • Evaporative Cooling System
  • Air Cooling System
  • Hybrid Cooling System
  • Water Cooling System
•  End-use Insights (Revenue, US$ Bn, 2019 - 2031)
  • Power Generation
  • Industrial Manufacturing
  • Petrochemical Processing
  • Food Processing & Storage
  • Pharmaceuticals
  • Data Center
• Regional Insights (Revenue, US$ Bn, 2019 - 2031)
  • North America
    • U.S.
    • Canada
  • Latin America
    • Brazil
    • Argentina
    • Mexico
    • Rest of Latin America
  • Europe
    • Germany
    • U.K.
    • Spain
    • France
    • Italy
    • Russia
    • Rest of Europe
  • Asia Pacific
    • China
    • India
    • Japan
    • Australia
    • South Korea
    • ASEAN
    • Rest of Asia Pacific
  • Middle East & Africa
    • GCC Countries
    • Israel
    • South Africa
    • Rest of Middle East & Africa
• Key Players Insights
  • Airedale International Air Conditioning Ltd.
  • American Power Conversion (APC)
  • Baltimore Aircoil Company
  • Brentwood Industries, Inc.
  • Emerson Electric Co.
  • Enexio
  • GEA Group Aktiengesellschaft
  • Hamon Group S.A.
  • Johnson Controls International plc
  • Paharpur Cooling Towers
  • Rittal GmbH & Co. KG
  • Schneider Electric SE
  • SPIG S.p.A.
  • SPX Corporation
  • Star Cooling Tower Pvt Ltd