China’s light commercial refrigeration equipment sector will be 60% R290 by 2024, according to analysts

March 14, 2024

The share of R290 (propane) equipment in China’s light commercial refrigeration sector is forecast to reach 60% by 2024, according to Ping Yang, General Manager at China IOL, which collects data on the country’s HVAC&R industry.

R290 refrigeration equipment accounted for 58% of the light commercial refrigeration equipment market in 2022, with China IOL estimating that figure will reach 59% in 2023 and 60% in 2024.

“In refrigerated sales ‒ aside from R134a and R404A ‒ R290 and R600a (isobutane) have started to be used as environmentally friendly refrigerants,” Yang said.

Yang said R600a is mainly used in wine storage cabinets.

While hydrocarbons have gained ground, the use of R134a is forecast to persist for some time in the sector even though the country’s Ministry of Ecology and Environment began restricting the expansion of HFC refrigerant production in January 2022.

In the large commercial sector, the market share of R404A equipment is forecast to remain steady from 2022 to 2024 at 39%. R22 refrigeration equipment is slowly losing ground in the sector and its market share is predicted to “gradually” decrease from 44% in 2022 to 41% by 2024.

Yang presented details about the use of natural refrigerants in China’s industrial and commercial sectors in a video presentation at the ATMOsphere APAC Summit 2024, held February 6–7 in Tokyo. The event was organized by ATMOsphere, publisher of Hydrocarbons21.com.

Industrial and commercial refrigeration companies have “closely monitored” changes in refrigerants over the past two years, Yang noted. China ratified the Kigali Amendment to the Montreal Protocol on June 17, 2021.

The Chinese refrigeration equipment industry was worth ¥230 billion ($32 billion/€29.5 billion) in 2023, a 7.6% increase from 2022. Household refrigeration, including exports, accounts for roughly two-thirds of the market, with the commercial sector accounting for 30% of the market and the industrial sector comprising 4%. Yang said that R600a equipment makes up 89% of the Chinese household refrigeration sector, with R134a accounting for the rest.

The industrial sector

In 2023, ammonia and CO₂ (R744) refrigeration equipment, used mainly in food processing, accounted for 25.8% of the industrial sector. However, Yang said that will drop slightly to 25.1% by 2024 due to the rapid rise of new synthetic equipment in the energy and chemical industries.

“In industrial refrigeration, there is a rapid growth in the category of condensing compressors attributed to energy and chemical industries,” Yang said. “We estimate industrial refrigeration to reach nearly ¥10.3 billion [US$1.4 billion/€1.3 billion] in 2024 with an overall compound annual growth rate as high as 6.6%.”

China IOL separated the industrial market into three categories: the energy and chemical industries, food processing and special applications. “In 2023, the highest growth area was the energy and chemical industries, with a growth rate of up to 14%,” Yang noted.

Growing NatRef solutions

Natural refrigeration solutions continue to grow in China.

In May 2023, Brazilian OEM Embraco launched three propane variable-speed compressors for use in the Chinese food service and retail markets.

In January 2018, METRO China opened the first retail market in China with a transcritical CO₂ system in Lishuiqiao, a district in northern Beijing. The system’s installer, Shanghai Fute Refrigeration & Electrical Engineering Co., began installing CO₂ systems in 2010.

Haier Smart Home, a division of Chinese manufacturer Haier, entered into an agreement in December 2023 with U.S.-based manufacturer Carrier to purchase its Europe-based commercial refrigeration business, which includes its transcritical CO₂ operations. The transaction, expected to be finalized by the end of 2024, builds on a 22-year history of joint venture activities between the two companies, including CO₂ commercial equipment installations in China.

In an interview with ATMOsphereTV at China Refrigeration 2018, Dirk Oschetzke, GEA Product Manager for Screw Compressors, indicated that some past accidents involving ammonia have held China back from the technology.

“However, we are seeing them pick up cascade systems with reduced amounts of ammonia,” Oschetzke said. “With international companies requesting ammonia and local training, that is going to grow.”