ATMOsphere, publisher of R744.com, has released its 2023 Market Report, “Natural Refrigerants: State of the Industry/Refrigeration in Europe, North America and Japan, Plus Heat Pumps in Europe,” with data showing robust growth of transcritical CO2 (R744) installations in commercial and industrial applications in North America, Europe and Japan.

The report can be downloaded for free here.

The release of the annual report coincides with the 28th Conference of the Parties (COP28) to the United Nations Framework Convention on Climate Change (UNFCCC), which runs from November 30 to December 12 in Dubai, United Arab Emirates. At the event representatives of ATMOsphere will highlight the report in supporting the global adoption of clean cooling and heating technologies with natural refrigerants alongside the launch of the Global Cooling Pledge.

“Our 2023 Market Report will contribute to the conversation in Dubai and worldwide by providing the latest insights and data on natural refrigerant-based commercial and industrial refrigeration systems in several key markets – Europe, the U.S., Canada and Japan,” said Marc Chasserot, Founder and Publisher of ATMOsphere. “We consider this report to be the world’s leading resource for information on the installations and penetration of natural refrigeration in the commercial and industrial sectors.”

The report provides installation data as of December 2023 for transcritical CO2, low-charge ammonia and hydrocarbon cabinets in Europe and North America (U.S. and Canada) and transcritical CO2 in Japan, as well as (for the first time) hydrocarbon chillers in Europe and natural refrigerant (mostly hydrocarbon)-based domestic heat pumps in Europe.

The report shows that in the past year there has been exceptional growth for transcritical CO2 installations in both stores and industrial sites in major markets throughout the world. In Europe, the leading market, as of December 2023 there were approximately 68,500 food retail stores in Europe that use transcritical CO2 systems; of these 60,000 use a centralized system (one or more racks), and 8,500 use condensing units.  The number of stores with racks grew by 20% compared to last year, while those with condensing units grew by 70%.

There are an estimated 3,300 industrial sites using CO2 technology, for a total of 71,800 transcritical CO2 sites in Europe. These 3,300 sites represent a growth of 65% from the 2,000 industrial sites using transcritical CO2 a year ago.

The market penetration of transcritical CO2 systems in European stores has increased this year to 22.9% – the percentage of all food retail stores in Europe estimated to feature transcritical CO2 installations as of December 2023, up from 18.4% last year and 14.1% in 2021. In 2022, ATMOsphere estimated a market size of 299,025 European food retail outlets, and in 2023 this has dropped slightly to 298,600.

Installations in North America and Japan

In North America, as of December 2023 there were approximately 2,930 food retail stores using transcritical CO2 systems, up more than 80% from 1,605 in 2022 and from 945 in 2020. Of these 2,930 stores, 1,850 were in the U.S. and 1,080 in Canada.

The market penetration of transcritical CO2 systems in the estimated 71,492 North American supermarket and grocery stores has increased to 4.09%, up from 2.2% a year ago. When considering convenience stores as well, the market penetration out of 231,443 retail food stores in North America is 1.27%, up from 0.7% in 2022.

As of December 2023, there were also 498 industrial sites using transcritical CO2 in North America in 2023, 208 in the U.S. (up from 120 in 2022) and 290 in Canada (up from 170 in 2022). All told, there was a total of 3,428 transcritical CO2 sites in North America.

In Japan, as of December 2023, there were 8,385 stores, including 7,800 convenience stores and 585 supermarkets, using transcritical CO2 systems, mostly outdoor condensing units (OCUs) in Japan’s commercial refrigeration sector, up 26% from 6,630 stores (6,330 convenience/300 supermarkets) reported in December 2022. The 2023 number represents a retail market penetration for transcritical CO2 of 10.9%.

The majority of installations in Japan were made by convenience store chain Lawson, which had 5,300 stores using CO2 OCUs as of February 2023 (more than one-third of its fleet of 14,656 stores).

There were an estimated 55,790 convenience stores in Japan by the end of September 2023, a decline of 0.1% from the previous September (55,872). Also in September 2023, there were an estimated 21,236 supermarkets in Japan, an increase of 0.5% from the previous September (21,131). Combined, this amounted to 77,026 food retail outlets in Japan in 2023, an increase of 0.03% from the prior year (77,003).

As of December 2023, there were an estimated 400 industrial sites (mostly cold storage) using transcritical CO2 installations in Japan’s industrial refrigeration sector, up 21% from the 330 reported in 2021. With industrial site installations, the total number of transcritical CO2 installations in Japan was 8,785 sites as of December 2023.

Drivers of adoption

Among the drivers of natural refrigerant- based refrigeration adoption,  regulatory action has had the most to do with it. In Europe, as explained in the report, the F-gas Regulation, already a major spur to natural refrigerant adoption, has been upgraded this year, making f-gases an even less attractive option. The EU’s ongoing consideration of restrictions on PFAS, which are defined to include HFOs, only serves to further accelerate the move toward natural refrigerants.

In the U.S., the rollout of the AIM Act, especially its Technology Transitions piece, has sparked long overdue interest in natural refrigerants by large supermarket chains. The restrictions on 150+ GWP refrigerants in the AIM Act have already led to considerable adoption of CO2 and hydrocarbon equipment in California, where these limits were enacted in 2020; they are now having a similar effect on a national level. But unlike Europe, the U.S. government has yet to make the connection between PFAS and f-gases.

In Japan, the government’s natural refrigerant subsidy program has been a major driver of adoption.

In Europe, North America and Japan, changes to the charge limits for hydrocarbons are opening new opportunities for self-contained cases using propane. Europe has many other measures, including its ecodesign and labeling rules, HFC taxes, incentives and RePowerEU heat pump rollout, with the potential to support natural refrigerant adoption.

This report also delves into the many other factors impacting the uptake of natural refrigerants, both on a global and regional level. Worldwide, technological improvements continue to make transcritical CO2 applicable in all climates and in integrated HVAC&R formats while lowering the charge levels of ammonia systems and boosting the efficiency of hydrocarbon cases.

“Our 2023 Market Report will contribute to the conversation in Dubai and worldwide by providing the latest insights and data on natural refrigerant-based commercial and industrial refrigeration systems in several key markets – Europe, the U.S., Canada and Japan.”

Marc Chasserot, Founder and Publisher of ATMOsphere