District Cooling Market Overview
- Leading up to 2035, the market is looking forward to build up at USD 29.0 Billion.
- District cooling market size was calculated at USD 13.4 Billion over 2024.
- Target market is maturing at a CAGR of 8.2%.
District cooling is a modern and efficient way to air condition a network of buildings in cities or campuses. District cooling provides chilled water for indoor cooling purposes to industrial, commercial, and residential buildings through a closed loop pipe network. Increasing demand for energy-efficient and sustainable cooling solutions, highly efficiency of district cooling, and utilization in centralized production, rapid urbanization, government initiatives, technological advancements, and so on are factors which contributes to the market hike.
Impact of AI in District Cooling:
The transformative impact of advanced technologies, such as AI on district cooling systems is undeniable. Embracing digital transformation is not just about enhancing operational efficiency; but it is also about redefining how cooling services are delivered and managed. In an era focused on sustainability, efficiency, and customer-centric services, digital transformation stands as a beacon for the future of district cooling.
District Cooling Market Drivers & Restraints
Key Drivers of Target Market:
Market is Expanding by Reliability of District Cooling Systems
District cooling systems offer higher reliability compared to individual and conventional cooling systems. In the face of extreme weather events or natural disasters, district cooling systems may provide more robust and resilient cooling solutions, minimizing service disruptions. This can be extremely important for critical facilities and businesses that rely on uninterrupted cooling.
- For instance, in April 2023, Emirates Central Cooling Systems Corporation (Empower) has launched a modernization and upgradation project for the Jumeirah Beach Residence (JBR) district cooling plant in Dubai. The project will incorporate cutting-edge technologies to improve the energy efficiency and reliability of the cooling system.
Restraints:
High Initial Costs is the Reason Behind Market Hindrance
Connecting to a district cooling network often involves significant upfront costs, including infrastructure and installation fees. Many district cooling providers charge a one-time fee for connecting a new facility to their network. This fee can vary widely depending on the provider and the complexity of the installation.
- Counterbalance Statements: To mitigate the high initial costs of district cooling, potential solutions include government incentives and subsidies, phased implementation in high-density areas, utilizing renewable energy sources, partnering with private investors, along with others.
Opportunities:
Digital Transformation can Offers Key Market Opportunities in Impending Years
Looking toward the future, digital transformation in district cooling is poised for further innovations and developments. The integration of more advanced AI algorithms, expansion of IoT sensor networks, and adoption of newer digital tools will continue to enhance the efficiency and effectiveness of these systems.
- For instance, in January 2025, Emicool, a leading district cooling service provider in the region and a joint venture between Dubai Investments, a leading investment company listed on the Dubai Financial Market (DFM) and Actis, a leading global investor in sustainable infrastructure has announced a strategic partnership with Quant Gulf, a leading smart maintenance solutions provider. The partnership aims at enhancing its operations through the deployment of the Schaeffler OPTIME Ecosystem. This first-of-its-kind technology aims to boost Emicool’s operational efficiency, environmental performance, and reliability, marking a significant step in the company’s digital transformation journey.
District Cooling Market Segmentations & Regional Insights
The market is separated into source, production techniques, cooling medium, application, and region.
Source
Corresponding to source, the market is grouped into fossil fuels, renewable energy, and others. The fossil fuels holds the biggest district cooling market share as they are energy-efficient and cost-effective.
Production Techniques
Free cooling, absorption cooling, electric chillers, and others are production techniques upon which market is dismembered. Electric chillers segment dominates the district cooling market due to their ability to provide reliable, precise temperature control, and efficient cooling across large-scale commercial and industrial applications.
- For instance, in October 2024, Mitsubishi Heavy Industries Thermal Systems, Ltd., has signed a new agreement with Emirates Central Cooling Systems Corporation PJSC, the world's largest district cooling services provider, to supply large-scale centrifugal chillers to Empower's District Cooling plants in Dubai, UAE. Under the agreement, MHI Thermal Systems will supply 18 advanced chillers that will be ready for delivery from the beginning of 2025 for an aggregate cooling capacity of 56,250 refrigeration tons.
Cooling Medium
The market is classified into water, brine, refrigerants, thermal energy storage, and others on the account of cooling medium. The water is the cooling medium with the largest market share due to its readily available, cost-effective nature, high specific heat capacity, and suitability for most cooling applications.
- For instance, in November 2024, AMAX, a global leader in GPU cluster solutions and advanced cooling technologies, announced the launch of its latest innovation, the AMAX Compact Data Center Solution (CDCS). Designed to address the evolving needs of modern AI-driven data centers, the CDCS integrates high-density compute, advanced liquid cooling, and intelligent management systems into a unified, scalable solution.
Application
Based on the application, the market is distributed by residential, commercial, and industrial. The commercial sector is leading the market in the district cooling market, followed by residential and industrial. This is due to the increasing demand for cooling in commercial buildings, such as offices, malls, and hospitals.
- For instance, in October 2024, HMB, a subsidiary of AF Gruppen, has been assigned the task of constructing a new district cooling center at the University Hospital in Örebro on behalf of Region Örebro Län. The project will be carried out as a collaborative turnkey contract and has a contract value of approximately SEK 180 million excluding VAT.
Regional
Geographically, the market is studied across North America, Europe, Asia Pacific, Latin America, and the Middle East & Africa.
Asia Pacific: the Asia Pacific currently holds the largest share of the district cooling market due to rapid urbanization, a rising population, increasing construction activities, and growing awareness about energy efficiency in countries, including China, Singapore, and Japan, making the demand for sustainable cooling solutions high in the region.
- For instance, in September 2023, The Telangana government has signed up with Tabreed, a cooling utilities company based out of Abu Dhabi, for changing the cooling landscape in the state. The partnership observed the development of top-tier cooling infrastructure for industrial and commercial parks, started with the largest district cooling Public-Private Partnership (PPP) project in Asia, for Hyderabad Pharma City (HPC).
Middle East and Africa: the Middle East and Africa (MEA) region is currently considered the fastest growing market for district cooling owing to its extreme climate conditions, rapid urbanization, and strong government support for energy-efficient and sustainable cooling solutions
For instance, in January 2025, Emirates Central Cooling Systems Corporation PJSC (Empower), a leading district cooling services provider, has partnered with Wasl Group to provide district cooling services to ‘The Island’ project in Dubai with a capacity of 23,853 refrigeration tons (RT). This partnership highlights both parties’ commitment to supporting Dubai’s development goals by implementing projects that prioritizes energy-efficiency and sustainability.
District Cooling Market Report Scope:
Attribute |
Details |
Market Size 2025 |
USD 14.2 Billion |
Projected Market Size 2035 |
USD 29.0 Billion |
CAGR Growth Rate |
8.2% (2025-2035) |
Base year for estimation |
2024 |
Forecast period |
2025 – 2035 |
Market representation |
Revenue in USD Billion & CAGR from 2024 to 2034 |
Regional scope |
North America - U.S. and Canada Europe – Germany, U.K., France, Russia, Italy, Spain, Netherlands, and Rest of Europe Asia Pacific – China, India, Japan, Australia, Indonesia Malaysia, South Korea, and Rest of Asia-Pacific Latin America - Brazil, Mexico, Argentina, and Rest of Latin America Middle East & Africa – GCC, Israel, South Africa, and Rest of Middle East & Africa |
Report coverage |
Revenue forecast, company share, competitive landscape, growth factors, and trends |
Segmentation:
By Source:
- Fossil Fuels
- Renewable Energy
- Others
By Production Techniques:
- Free Cooling
- Absorption Cooling
- Electric Chillers
- Others
By Cooling Medium:
- Water
- Brine
- Refrigerants
- Thermal Energy Storage
- Others
By Application:
- Residential
- Commercial
- Industrial
By Region:
- North America
- U.S.
- Canada
- Europe
- Germany
- U.K.
- France
- Russia
- Italy
- Spain
- Netherlands
- Rest of Europe
- Asia Pacific
- China
- India
- Japan
- Australia
- Indonesia
- Malaysia
- South Korea
- Rest of Asia Pacific
- Latin America
- Brazil
- Mexico
- Argentina
- Rest of Latin America
- Middle East & Africa
- GCC
- Israel
- South Africa
- Rest of Middle East & Africa
District Cooling Market Competitive Landscape & Key Players
New product launch, partnership & collaborations, integration with advanced technologies, and investment & funding, and others are strategies executed by following firms which are actively operating in the district cooling market.
List of Key Players in the Market:
District Cooling Market Recent News
- In October 2024, Tata Power Trading Company Limited, , one of India’s largest integrated power companies, and Keppel, a Singapore-headquartered global asset manager and operator, have entered into a collaboration arrangement to launch sustainable Cooling-as-a-Service (CaaS) solutions in India. CaaS enable businesses and building owners to subscribe to long-term, energy-efficient space cooling solutions without having to invest heavily in infrastructure, thus allowing them to enjoy significant energy and cost savings.
- In November 2023, CenTrio announced that its Chicago District Cooling System has been awarded the 'Out of the Box' Award of Excellence in the Global District Energy Climate Awards (GDECA) presented by Euroheat & Power at their recent summit in Brussels, Belgium. This category recognizes initiatives demonstrating significant innovation in the District Energy sector, and CenTrio's carbon-free ice storage chilled-water system has proven to be a trailblazer in sustainable district cooling services.
Analyst View:
Increasing demand for energy-efficient and sustainable cooling solutions, highly efficiency of district cooling and utilization in centralized production, rapid urbanization, government initiatives, technological advancements, and many others are factors which contributes to the district cooling market hike.
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District Cooling Market Company Profile
Company Name |
MITSUBISHI HEAVY INDUSTRIES, LTD. |
Headquarter |
Tokyo, Japan |
CEO |
Seiji Izumisawa |
Employee Count (2024) |
77,778 Employees |
District Cooling Market Highlights
FAQs
District cooling market size was valued at USD 14.2 Billion in 2025 and is expected to reach USD 29.0 Billion by 2035 growing at a CAGR of 8.2%.
The market is segmented into source, production techniques, cooling medium, application, and region.
By region, the market is studied across North America, Asia Pacific, Europe, Latin America, and the Middle East & Africa. Asia Pacific is expected to dominate the market.
The key players operating in the District Cooling Market include Veolia, ENGIE, ADC ENERGY SYSTEMS, Emicool, ARANER, Danfoss, Keppel EaaS Pte. Ltd., RAMBOLL, SHINRYO CORPORATION, TABREED, DAIKIN INDUSTRIES, Ltd., Trane Technologies Company, LLC, MITSUBISHI HEAVY INDUSTRIES, LTD., and LOGSTOR DENMARK HOLDING APS.