Refrigerant Industry Analysis: Deterministic Opportunities Under Quota Constraints

Under the dual goals of “dual carbon” and the continuous tightening of global environmental policies, the refrigeration industry is undergoing profound structural changes. The Ministry of Ecology and Environment recently released the 2026 quota plan, further clarifying the industry’s development path of “total volume control and structural optimization,” providing solid support for the long-term prosperity of this fundamental chemical material.

Rigid policy constraints establish a supply ceiling

China implements the strictest quota management system for refrigerants worldwide, with this “licensing” model forming the core barrier for the industry. The 2026 quota plan continues this policy orientation, showing a clear trend of “accelerated phase-out of second-generation refrigerants and stable increase of third-generation refrigerants.”

Regarding second-generation refrigerants, as a phased task for fulfilling the Montreal Protocol, the total production quota in 2026 is reduced to 151,400 tons, a decrease of 12,100 tons from 2025. The main product R22 has a production quota of 146,100 tons, down 2,020 tons year-on-year, with domestic-use quotas significantly cut by 3.60% to 77,900 tons. Notably, the quota for R141b has been completely eliminated, indicating that second-generation refrigerants are accelerating their exit from the mainstream market, making room for third-generation products.

Since the implementation of quota management for third-generation refrigerants (HFCs) in 2024, the industry ecosystem has improved significantly. In 2026, the total production quota reaches 797,800 tons, an increase of 5,963 tons from 2025, showing structural growth. Breaking down by product, the quotas for the three main varieties—R32, R134a, and R125—have all increased: R32 at 281,500 tons (+1,171 tons), R134a at 211,500 tons (+3,242 tons), and R125 at 167,600 tons (+351 tons). For the first time, the policy introduces a flexible adjustment mechanism, allowing companies to submit quota adjustment applications between varieties before April 30 and August 31 each year, under the premise of “not increasing total CO2 equivalent” and “cumulative adjustment not exceeding 30% of the approved quota.” This change significantly benefits leading companies like Juhua and Sanmei, which have advantages in multi-variety layouts.

The rigid supply constraints combined with steady demand growth jointly create a tight balance in the refrigerant market. According to Bairun Yingfu data, as of December 12, 2025, the average market prices are 63,000 yuan/ton for R32, 57,500 yuan/ton for R134a, and 46,000 yuan/ton for R125, all showing significant increases compared to the beginning of the year. Industry online monitoring indicates that current overall industry inventories are at their lowest in nearly two years, with companies generally reluctant to sell.

On the demand side, there is a dual feature of “steady growth in traditional fields and expansion in emerging fields.” In traditional applications, household air conditioners are entering replacement cycles, with production and sales increasing by 8.5% year-on-year in 2025; the high prosperity of the new energy vehicle market continues to drive a 31% year-on-year increase in automotive air conditioning refrigerant demand; cold chain logistics, refrigerators, and freezers maintain steady growth. More notably, emerging fields are adding new increments: the precise demand for specialty refrigerants in semiconductor manufacturing is prompting targeted quota increases; the liquid cooling market in data centers continues to expand, with high-density computing driving demand for fluorinated liquids that combine insulation and low global warming potential (GWP), opening new growth space for the industry.

Leading companies validate a high prosperity cycle

The high prosperity of the industry in 2025 is fully reflected in the performance of listed companies. Juhua expects net profit attributable to parent of 3.54 billion to 3.94 billion yuan, an increase of 80%-101%, with refrigerant business accounting for over 60%, driven mainly by volume and price increases of core products. Leveraging its integrated industry chain, the company holds a production quota of 297,800 tons of HFCs, accounting for 39.33% of the national total for similar products, with R32 quotas occupying an absolute leading position.

Sanmei expects net profit of 1.99 billion to 2.15 billion yuan, a year-on-year increase of 155.66%-176.11%, with more pronounced flexibility. The company focuses on the refrigerant main business, and the optimized quota structure fully releases pricing elasticity. Yonghe expects net profit of 530 million to 630 million yuan, up 110.87%-150.66%, achieving a performance doubling.

In terms of profitability, refrigerant product gross margins continue to rise. In the first three quarters of 2025, Juhua’s average unit price for refrigerants was about 39,500 yuan/ton, with a significant expansion of the price-cost spread. Sanmei’s net profit growth excluding non-recurring gains and losses aligns closely with its net profit attributable to parent, indicating that performance is mainly driven by core business, with solid quality.

Globally, the refrigerant market size has surpassed $15 billion, with an expected steady growth of about 5% in 2026. R32 refrigerant, due to its low GWP, is projected to grow from $9.8 billion in 2025 to $19.5 billion in 2032, with a CAGR of 8.4%. The R134a market remains stable, with a CAGR of 4.8%. As a fourth-generation environmentally friendly refrigerant, R1234yf is experiencing faster growth, with a projected CAGR of 9.5% from 2026 to 2032.

China occupies a core position in the global industry chain, with a market share of 38.7% in the Asia-Pacific region, of which China accounts for 21.3%. This market position, combined with quota management, gives Chinese companies greater influence in global pricing systems. As the 2026 quota plan is implemented, industry concentration further increases, with the CR5 (top five companies) holding over 60% of the market share, and leading companies’ profitability becoming more stable.