Europe Industrial Refrigeration Market Outlook to 2030

Europe Industrial Refrigeration Market Overview

The Europe Industrial Refrigeration Market has witnessed growth over the past few years, driven by increasing demand for cold storage facilities and advancements in refrigeration technologies. The industrial refrigeration market in Europe was valued at USD 9 billion in 2023 it has expanded due to the rising demand for refrigerated storage solutions in the food and beverage industry, particularly in cold storage warehouses, meat processing plants, and dairy facilities.

Leading players in the Europe industrial refrigeration market include Johnson Controls International, GEA Group, Daikin Industries, Danfoss, and Emerson Electric. These companies dominate the market due to their extensive product portfolios, strong customer bases, and continuous investment in R&D.

In 2023, Johnson Controls International announced the acquisition of Hybrid Energy, which focuses on high-temperature industrial heat pumps utilizing ammonia-based technology. This acquisition aligns with Johnson Controls' commitment to sustainability and energy efficiency, particularly in the context of European decarbonization efforts and compliance with regulations such as the European Union's F-Gas regulations.

Germany is the leading country in the market in 2023. The country's dominance is due to its robust food and beverage industry, which is the largest in Europe, and its strong commitment to energy efficiency. Additionally, Germany's favorable regulatory environment and government incentives for green technologies have further bolstered its position in the market.

Europe Industrial Refrigeration Market Segmentation

By Product Type: The market is segmented by product type into compressors, evaporators, and condensers. In 2023, compressors held a dominant market share. The dominance of compressors is attributed to their crucial role in the refrigeration cycle, providing the necessary pressure to circulate refrigerant throughout the system. The increasing adoption of energy-efficient compressors, which can reduce energy consumption by up to 30%, has further driven their market share.

2. By End-User Industry: The market is segmented by end-user industry into food and beverage, chemical and pharmaceutical, and logistics. In 2023, the food and beverage industry held a dominant market share. This dominance is due to the industry's reliance on industrial refrigeration for the safe storage and processing of perishable goods. Also, there is growing demand for frozen and chilled foods, coupled with stringent food safety regulations.

By Region: The market is segmented by region into Germany, France, United Kingdom, Sweden, Italy and rest of Europe. Germany holds the dominant position in the Europe Industrial Refrigeration market share in 2023. The country's leadership in the market can be attributed to its robust industrial base, particularly in the food and beverage sectors, which are major consumers of industrial refrigeration systems.

Europe Industrial Refrigeration Market Competitive Landscape

• GEA Group: In 2023, GEA Group completed the acquisition of a leading European refrigeration company for EUR 450 million. They secured 13 large orders valued at EUR 386 million, notably in the beverage and new food sectors, which indicates a strategic focus on these growing markets.The company reported a positive trend in its financial performance, with organic revenue growth and improved EBITDA margins.
• Danfoss: Danfoss has launched a new range of low-GWP refrigerants in 2024, aimed at addressing stringent environmental regulations in Europe. These refrigerants are designed to reduce the carbon footprint of industrial refrigeration systems, with estimates suggesting a potential reduction of up to 50% in emissions, which aligns with the European Union's climate goals.

Europe Industrial Refrigeration Industry Analysis

Growth Drivers

• Opportunities for Cold Chain Providers: In 2024, the demand for cold chain infrastructure in Europe has seen substantial growth, driven by the increasing need for temperature-sensitive storage. The growth in biologics, vaccines, and emerging therapies requiring strict temperature control has created opportunities for providers of temperature-controlled packaging, storage, and shipping capabilities.
• Increasing Investments in Food Processing Industries: In 2023, Europe accounted for 39.23% of the frozen food market, which is expected to further increase, driven by busy lifestyles and a shift towards more convenient food options, including frozen ready meals and snacks. As a result, there has been a corresponding increase in the demand for industrial refrigeration systems, particularly in countries like Germany and France, where food processing is a major industry.
• Technological Advancements in Refrigeration Systems: In 2024, the integration of advanced technologies like IoT and AI in industrial refrigeration systems has enhanced their efficiency and monitoring capabilities. These technological advancements have become a key driver for market growth as industries seek more reliable and cost-effective refrigeration solutions.

Challenges

• High Initial Costs of Advanced Refrigeration Systems: In 2024, the average cost of installing a CO2-based refrigeration system in a medium-sized facility is around EUR 1.2 million, which is significantly higher than traditional systems. This cost barrier has been particularly challenging for small and medium-sized enterprises (SMEs), limiting their ability to invest in these technologies despite the long-term benefits.
• Complex Regulatory Environment: Companies operating in multiple European markets have reported difficulties in ensuring compliance with varying national regulations on refrigerants and energy efficiency. This complexity has led to increased compliance costs, with businesses spending money annually on regulatory compliance and associated legal fees.

Government Initiative

• EU Green Deal for Industry: In 2023, the European Union launched the Green Deal for Industry initiative aimed at promoting energy efficiency and reducing carbon emissions in industrial sectors, including refrigeration. The initiative provides subsidies and tax incentives to companies adopting energy-efficient refrigeration systems, leading to a marked increase in the installation of such systems.
• Frances Refrigeration Modernization Program: The French government introduced a nationwide Refrigeration Modernization Program, allocating EUR 300 million to support the replacement of outdated refrigeration systems with modern, eco-friendly alternatives. The program targets the food and beverage industry, which accounts for a large portion of industrial refrigeration use in the country.

Europe Industrial Refrigeration Market Future Outlook

The Europe industrial refrigeration market is expected to continue growing at a steady pace by 2028, driven by increasing demand for energy-efficient refrigeration systems, the expansion of the food and beverage industry, and the adoption of smart refrigeration technologies that offer enhanced monitoring and control capabilities.

Future Market Trends

• Adoption of Smart Refrigeration Systems: Over the next five years, the adoption of smart refrigeration systems that integrate IoT and AI technologies will become increasingly prevalent in the European industrial refrigeration market. These systems will offer enhanced monitoring, predictive maintenance, and optimized energy consumption, leading to significant cost savings for businesses.
• Expansion of Cold Chain Logistics: The cold chain logistics sector in Europe is projected to expand exponentially by 2028, with a particular focus on cross-border trade of perishable goods. This growth will be supported by investments in infrastructure and technology, enabling more efficient and reliable temperature-controlled transportation.