Air Separation Plant Market Size, Share, Industry, Forecast and outlook (2024-2031)

Air Separation Plant Market is Segmented By Process (Cryogenic, Pressure Swing Adsorption, Vacuum Pressure Swing Adsorption, Membrane Separation), By Gas (Nitrogen, Oxygen, Argon, Others), By End-User (Iron & Steel, Oil & Gas, Chemical, Healthcare, Others), and By Region (North America, Latin America, Europe, Asia Pacific, Middle East, and Africa) – Share, Size, Outlook, and Opportunity Analysis, 2024-2031

Air Separation Plant Market Overview

Air Separation Plant Market size is growing at a CAGR of 5% during the forecast period 2024-2031

The air separation plant separates the atmospheric air into its primary constituent gases, mainly nitrogen and oxygen, argon, and other gases. A common method of air separation is the fractional distillation method. Cryogenic Air Separation Units (ASUs), which utilize extremely cold temperatures for gas separation, are used to produce nitrogen and oxygen along with argon. Other industrial air separation methods are membrane separation, Pressure Swing Adsorption (PSA), and Vacuum Pressure Swing Adsorption (VPSA) to separate a particular gas from atmospheric air. High-purity gases such as oxygen and argon are used to fabricate semiconductor devices. Oxygen is also used for steelmaking and metal processing. Nitrogen gas is extensively used in food processing and packaging. Rare gases such as argon, krypton, and neon are used in the chemical industry for the industrial production of flammable chemicals.

Air Separation Plant Market Summary

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Air Separation Plant Market Dynamics

The increasing demand from industries mainly drives the demand for air separation plants due to rising global industrialization. It is the most important driver for the market. The high cost of an air separation plant is a key factor in limiting the growth of this market. 

Rising global industrialization

Rapid industrialization occurs globally due to the economic growth experienced in the last two decades, leading to the transformation of countries and societies. Countries with largely agrarian economies are pursuing industrialization to achieve economic development. Similarly, industrializing countries are entering an advanced industrialization phase, intending to move up the value chain. Countries such as  India, China, Vietnam, Malaysia, Thailand, and Indonesia are examples of such economic shifts.

Steel production, consumer electronics, chemicals, and food processing are some industries experiencing rapid growth, especially in the Asia-Pacific region. Oxygen is also used for steelmaking and metal processing. Nitrogen gas is extensively used in food processing and packaging. Rare gases such as argon, krypton, and neon are used in the chemical industry for the industrial production of flammable chemicals. The rising global industrialization is a key driver of the market's growth.

High cost of the air separation plant

The air separation process requires precise integration of heat exchangers and separation columns to obtain maximum efficiency. High initial capital expenditure is required to set up an air separation plant. The design of an air separation plant is influenced by process requirements, capacity requirements, economics, and safety measures.

High energy costs are incurred for the operation of the plant. Additional costs are incurred on regulatory compliance, maintenance, and periodic upgrades. The high costs of setting up and running air separation plants relegate them exclusively to major industrial conglomerates and prevent their wider adoption. It is a key challenge for the growth of the market.

COVID-19 impact on Air Separation Plant Market

The global air separation plant market was unevenly impacted due to the COVID-19 pandemic. Construction and industrial applications saw declines due to government-imposed lockdowns and movement restrictions. A great demand emerged in the healthcare sector, particularly for medical oxygen to treat critically ill COVID-19 patients. Governments across the globe were setting up air separation plants at hospitals to ensure an adequate supply of oxygen during the pandemic's peak as COVID-19 cases overwhelmed healthcare systems.

 Industrial demand saw mild improvement towards the end of 2020, as China lifted restrictions and industries gradually increased output. However, major countries in Europe and North America were still grappling with high COVID-19 caseloads and stringent restrictions remained in place. Industrial demand for air separation plants is not expected to be restored to pre-pandemic levels before the end of 2021. The COVID-19 pandemic has mildly impacted the air separation plant market. The demand for air separation plants remains strong and is expected to grow gradually in the coming years.

Air Separation Plant Market Segmentation Analysis

The global air separation plant market is segmented into process, gas, end-user, and region. The air separation plant market is further segmented into oxygen, nitrogen, argon, and others based on gas. Nitrogen is leading in this segmentation since it has the largest number of industrial applications. Nitrogen gas is an inert gas extensively used in food processing and packaging to prevent the oxidation of edible oils. It is used in the chemical industry to prevent the formation of volatile organic compounds.

Global Air Separation Plant Market Geographical Share

Asia-Pacific is leading in the global air separation plant market as major heavy industries are located in the region. Asia-Pacific has some of the largest steelmaking, automotive, shipbuilding, and heavy machinery production industries.

China is also the largest market for air separation plants in the world. China is the largest steelmaker globally, with nearly one billion tonnes of steel produced in 2020. Japan, South Korea, and India are also some of the leading steel producers in the region. Shipbuilding is another major end-user for air separation plants. China, Japan, and South Korea have some of the largest shipbuilding industries globally.

China also is the second-largest producer of chemicals in the world. Inert gases such as argon are extensively used to produce flammable and volatile chemicals in the chemical industry. India, Taiwan, Japan, and South Korea have well-developed domestic chemical industries. The Asia-Pacific region will continue to have the largest market share in the global air separation plant market in the coming years.

Air Separation Plant Companies and Competitive Landscape

The global air separation plant market is competitive due to the availability of a wide variety of companies offering industrial gas production solutions suited to different needs. Some of the major players in the fragmented market are Linde PLC, Air Liquide, Air Products Inc., Messer Group GmBH, Air Water Inc., Enerflex Ltd, Yingde Gases Group, Universal Industrial Gases, Inc., Daesung Industrial Co., Ltd, and Taiyo Nippon Sanso Corporation. The major players adopt growth strategies such as new product launches, capacity expansion, collaborations, and joint ventures to contribute to growth in the global market.

Linde PLC

Overview: Linde PLC is a multinational chemical company with interests in healthcare, petroleum refining, manufacturing, food and beverage, fiber optics, steel making, aerospace, chemicals, electronics, and water treatment. The company's primary business is the production and distribution of atmospheric gases. Its products are sold globally through distributors and subsidiaries in more than 120 countries. Linde PLC was founded in 1879 by Carl Von Linde and is domiciled in Dublin, Ireland.

Product Portfolio

• FLEXASU is a flexible production air separation plant designed for on-site industrial production of gases. It synchronizes gas production according to the electric grid load, ensuring energy savings and maximum efficiency.

Key Developments:

• In January 2021, Linde PLC signed a comprehensive long-term agreement with BorsodChem Zrt., a major Hungarian chemical company, to supply nitrogen, oxygen, and compressed air to its chemical complex in Kazincbarcika, Hungary. Linde PLC has started preliminary construction work on the plant, which is expected to be completed by 2022. In addition to aiding the expansion of BorsodChem, the plant will provide additional nitrogen, oxygen, and inert gases to meet the increasing demand for industrial gases in other Central European countries.