Global sales of di-electric gases were tipped to be USD 135.2 billion in 2023. The industry is projected to exhibit a Y-o-Y growth of 6.5% in 2024 and reach USD 144.9 billion. Surging at a CAGR of 7.2% between 2024 and 2034, demand for di-electric gases is estimated to reach USD 290.5 billion by 2034.
Highly effective, SF6 is still in wide use today due to a lack of equally effective alternatives, despite the increasing regulatory pressure over its environmental impact. Developments in low-GWP gases are ongoing and may gradually impact its market share in the longer term as industries try to seek more sustainable solutions.
| Attributes | Key Insights |
|---|---|
| Estimated Size, 2024 | USD 144.9 billion |
| Projected Size, 2034 | USD 290.5 billion |
| Value-based CAGR (2024 to 2034) | 7.2% |
In 2024, the switchgear segment is poised to dominate the di-electric gas market with the largest share. This is due to the need for better and more efficient power distribution systems due to rapid urbanization and infrastructure building.
Switchgear plays a significant role in protecting and controlling high-voltage equipment in electrical grids. Increased usage of renewable sources, such as solar and wind, presents the impetus for new switchgear solutions that can handle variable power flows.
Mounting regulatory pressures for lowering GHG emissions promotes the need to switch to environmentally friendly alternatives to SF6, making any switchgear intended to use low-GWP gases, like fluoroketones or dry air, more attractive.
The switchgear segment is expected to further grow as utilities upgrade their infrastructures to make the grid resilient, hence, this segment is likely to remain one of the significant drivers in the di-electric gas market.
Limited awareness and understanding of alternative di-electric gases significantly hold down industry-wide adoption and slow down market growth. The majority of stakeholders involved, like manufacturers and contractors, may not have deep knowledge with respect to benefits and performance of eco-friendly gases such as fluoroketones and fluoronitriles.
This lack of awareness makes them shy away from moving beyond well-established solutions like SF6, despite its environmental liabilities.
The complications in handling and application would likely add to uncertainties and discourage the wider acceptance of these newer gases. Many companies are used to traditional technologies, and the risks perceived with active changeovers tend to inhibit proactive change.
The market for such alternatives will never take off unless proper education and resources are available to enable industry players to understand the benefits of sustainable gases, such as regulatory compliance and long-term cost benefits. More awareness and more training programs will be required for further acceptance and market development.
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The annual growth rates of the global di-electric gas market from 2024 to 2034 are illustrated below in the table. Starting with the base year 2023 and going up to the present year 2024, the report examines how the industry growth trajectory changes from the first half of the year, i.e. January through June (H1) to the second half consisting of July through December (H2).
This gives stakeholders a comprehensive picture of the sector’s performance over time and insights into potential future developments.
The figures provided show the growth of the sector for each half-year between 2023 and 2024. The market was projected to increase at a CAGR of 7.0% in the first half (H1) of 2023. However, in the second half (H2), there is a noticeable increase in the growth rate.
| Particular | Value CAGR |
|---|---|
| H1 2023 | 7.0% (2023 to 2033) |
| H2 2023 | 7.1% (2023 to 2033) |
| H1 2024 | 7.2% (2024 to 2034) |
| H2 2024 | 7.4% (2024 to 2034) |
In the subsequent period, from H1 2024 to H2 2024, the CAGR is projected to progress at 7.2% in the first half and relatively increase to 7.4% in the second half. In the first half (H1), an increase of 20 BPS is anticipated while in the second half (H2), a slight increase of 30 BPS is expected.
Rise in Demand from the Construction Sector Drives the Di-electric Gas Market
The rising demand in the construction sector significantly drives the di-electric gas market, mainly due to the increased requirements for effective power distribution systems in various newly built infrastructure and buildings.
More stress is being laid on establishing efficient electrical systems that are capable of catering to higher loads for lighting, heating, and cooling purposes, with the growth of urban areas and escalation in construction activities.
Large quantities of di-electric gases are required by modern building projects, especially for insulation and arc quenching purposes in advanced switchgear and transformer equipment. Constructors also consider environmentally friendly solutions that meet the strict regulations related to the emission of greenhouse gases.
All these factors work together to encourage the use of alternatives with low GWP, such as fluoroketones and dry air, in construction-related applications. Therefore, it is evident that the growing construction industry not only drives demand for di-electric gases but also innovates and invests in greener technologies, which propels the growth of the market.
Increasing Demand in Several Industries Drives Market Growth
Increasing demand from various industries is considered one of the reasons that contribute to the growth of the di-electric gas Market. Electrical systems used in power utilities, oil and gas, chemicals, and heavy metals industries have to be dependable and efficient.
With the growth in these industries, there will be increased demand for high-voltage equipment like switchgear and transformers; hence, these industries require efficient insulation from di-electric gases.
There is also a shift toward renewable energy sources and upgrading of electrical grids. This raises the demand for advanced di-electric technologies that manage complexities brought about by fluctuating power supply. Regulatory pressures of reducing greenhouse gas emissions force industries to move away from conventional SF6 gases to eco-friendly ones like fluoroketones and dry air.
The growing importance of sustainability, coupled with continued industrial growth, is a potent market backdrop for di-electric gases, innovation, and investment in newer, more efficient technologies across many industries.
High Initial Costs of Eco-friendly Di-electric Gases Deter Transition from Established Options like SF6, Hamper Growth of Di-electric Gas Market
High upfront investment associated with eco-friendly di-electric gases is one of the challenges for the transition from the conventional choice like SF6, and thus it is poised to pose obstacles in the growth of the di-electric gas market. Even if fluoroketones and fluoronitriles have low global warming potential, these alternatives require high investment in their production, handling, and deployment.
It incentivizes stakeholders to just opt to save resources in the short term at the cost of environmental benefits in the long run. Besides the cost implication for specialized equipment and training in managing these new gases also makes them more expensive.
This reason has led many organizations to cling to traditional SF6-based solutions, a step that contributes to shrinking the market scope for more environmentally friendly di-electric gases. Unless costs fall and demand for the long-run benefits increases, greener substitutes will continue to lag in adoption.
Principal Consultant
The global di-electric gas industry recorded a CAGR of 5.9% during the period between 2019 and 2023. The growth of the industry was positive as it reached a value of USD 135.2 billion in 2023 from USD 106 billion in 2019.
Overall, the growth in the demand for di-electric gases has been continuously upward as a result of increased consumption by end-use industries. In the agrochemicals industry, there has been a steep rise in the consumption of these gases in the quest for maximum value addition with the least degree of environmental degradation.
Mining, water treatment, and several other industries are also looking increasingly at these gases as integral to making such operations feasible and in tandem with regulations. The growing focus on the need for CFC-free alternatives, coupled with expanding industrial applications, has further driven demand. This is part of a wider trend of greening and innovation across diverse sectors and will continue to drive growth in the market.
Once economic activity reaches pre-crisis levels, industrial activity is expected to reach its trend performance after a delay of 3 years, growing for the following 4 years before stabilizing post-2030. The di-electric gas demand pattern is anticipated to reflect the same trend during the period.
Tier 1 companies include industry leaders with annual revenues above USD 3,000 million. These companies are currently capturing a significant share of 30-35% globally. These frontrunners are characterized by high production capacity and a wide product portfolio.
They are distinguished by extensive expertise in manufacturing and a broad geographical reach, underpinned by a robust consumer base. The firms provide a wide range of products and utilize the latest technology to meet regulatory standards. Prominent companies within Tier 1 include The 3M Company, Solvay S.A., The Linde Group, KPL International Limited, and many others.
Tier 2 companies encompass mid-sized participants with revenues ranging from USD 2,000 - 3,000 million, holding a presence in specific regions and exerting significant influence in local economies. These firms are distinguished by their robust presence overseas and in-depth industry expertise.
They possess strong technology capabilities and adhere strictly to regulatory requirements. The firms may not wield cutting-edge technology or maintain an extensive global reach. Noteworthy entities in Tier 2 include Matheson Tri-Gas, Inc., Kanto Denka Kogyo Co., Ltd., Showa Denko K.K., ABB Inc., and others.
Tier 3 encompasses most of the small-scale enterprises operating within the regional sphere and catering to specialized needs with revenues below USD 2,000 million. These businesses are notably focused on meeting local demand and are hence categorized within the Tier 3 segment.
They are small-scale participants with limited geographical presence. In this context, Tier 3 is acknowledged as an informal sector, indicating a segment distinguished by a lack of extensive organization and formal structure in comparison to the structured one. Tier 3 includes Messer Group GmbH, Air Products Inc., AGC Inc., and Bharat Heavy Electricals Limited, among others.
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The section below covers assessments of sales across key countries. Countries from North America are anticipated to exhibit promising double-digit growth over the forecast period.
| Countries | Value CAGR (2024 to 2034) |
|---|---|
| China | 8.2% |
| South Korea | 7.3% |
| United Kingdom | 7.1% |
| United States | 5.9% |
China’s di-electric gas market size is projected to surge at a CAGR of 8.2% from 2024 to 2034. Infrastructural growth and investments in renewable energy significantly drive the demand for the di-electric gas market in China, with the country showing rapid growth in the expansion of high-voltage switchgear and transformers.
Accelerating urbanization fueled the demand for trustworthy power distribution systems, which again calls for advanced switchgear solutions that can handle high voltages. Besides, China has a firm commitment to renewable energy capacity development and is focused on solar and wind energy, which requires efficient electrical equipment to manage such variable power flows.
The dual focus on infrastructure modernization and green technologies enhances energy efficiency and fosters the adoption of eco-friendly gases, hence supporting growth in the sector.
The South Korean market is projected to surge at a CAGR of 7.3% from 2024 to 2034. A significant factor that contributes to the demand for compact and efficient power distribution equipment in South Korea is advances in the field of GIS technology.
The country is moving toward smart grids and increasing dependence on renewable energy sources; therefore, demand for high-performance GIS systems is accelerating. These systems assure reliability at a high level, save space, and can perform under different environmental conditions, hence being suitable for urban areas.
The integration of GIS with green-friendly di-electric gases supports sustainability and helps companies comply with environmental laws. Thus, a much higher focus on innovative and efficient solutions drives the growth of the market and reshapes the energy landscape in South Korea.
In the forecast period, the United Kingdom industry is predicted to rise steadily at a CAGR of 7.1%. The United Kingdom sees a growing market for these gases amid the modernization of electrical infrastructure. Changing needs in switchgear and transformers have put extra pressure to substitute obsolete systems with state-of-the-art technologies that make use of low-global warming potential gases.
The transition will not only improve efficiency and reliability in the distribution of electricity but also meet the regulatory requirements of reducing greenhouse gas emissions. Modern equipment also supports the commitment of the United Kingdom to net-zero targets, thus bringing innovation in the energy sector that further catalyzes market growth.
The section explains the growth trajectories of the leading segments in the industry. In terms of gas type, the SF6 di-electric gases category will likely progress at a CAGR of around 4.8% for the projected period.
Based on end use industry, the power utilities segment is projected to register a CAGR of 5% from 2024 to 2034. The analysis would enable potential clients to make effective business decisions for investment purposes.
| Segment | SF6 Di-Electric Gases (Gas Type) |
|---|---|
| CAGR (2024 to 2034) | 4.8% |
SF6 remains widely used due to its excellent insulation and arc-quenching properties as compared to other high-voltage switchgear and transformers. Although its use is being faced with increasing environmental issues based on the high global warming potential, its reliability, coupled with cost-effectiveness, is keeping the demand for the product high across industries.
Regulatory pressures and the search for greener alternatives are set to erode demand in the long run as industries begin to opt for lower-GWP options like fluoronitrile and fluoroketones.
| Segment | Power Utilities (End Use) |
|---|---|
| CAGR (2024 to 2034) | 5% |
Power utilities are compelled to invest heavily in enhancing the infrastructure, especially for high-voltage equipment such as switchgear and transformers, because electricity demand is going to witness further augmentation.
Integration of renewable energy and the need for improved grid efficiency and reliability further fuel the adoption of advanced di-electric gases. Stricter environmental regulations also mean that the growth in the power utilities segment remains an important driver of the overall market expansion.
A few key players in the industry are actively enhancing capabilities and resources to cater to the growing demand for the compound across diverse applications. Leading companies also leverage partnership and joint venture strategies to co-develop innovative products and bolster their resource base.
Significant players are introducing new products to address the increasing need for cutting-edge solutions in various end-use sectors. Geographic expansion is another important strategy that is being embraced by reputed companies. Start-ups are likely to emerge in the sector through 2034, thereby making it more competitive.
Industry Updates
In terms of gas type, the Di-electric Gas Market is segmented into SF6 Di-Electric Gases, Dry Air Di-Electric Gases, Nitrogen Di-Electric Gases, Fluoronitrile (FN) Di-Electric Gases, Fluroketones (FK) Di-Electric Gases, and Others.
In terms of end use equipment, the Di-electric Gas Market is segmented into Switchgear, Transformers, and Gas Insulated Lines.
In terms of end use industry, the Di-electric Gas Market is segmented into Power Utilities (Medium Voltage, High Voltage, Extra & Ultra High Voltage), Oil & Gas (Medium Voltage, High Voltage), Chemicals & Petrochemicals (Medium Voltage, High Voltage), Heavy Metals (Medium Voltage, High Voltage), Mining (Medium Voltage, High Voltage), Transportation (Medium Voltage, High Voltage), Other Industrial (Medium Voltage, High Voltage).
Key countries of North America, Latin America, Western Europe, Eastern Europe, East Asia, South Asia, Middle East and Africa (MEA), have been covered in the report.
The global market was valued at USD 135.2 billion in 2023.
The global market is set to reach USD 144.9 billion in 2024.
Global demand is anticipated to rise at 7.2% CAGR.
The industry is projected to reach USD 290.5 billion by 2034.
General Electric and The Linde Group are key players in the industry.
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Di-electric Gas Market
