District Cooling Market Report 2026

The district cooling market size has grown rapidly in recent years. It will grow from $19.83 billion in 2025 to $22.13 billion in 2026 at a compound annual growth rate (CAGR) of 11.6%. The growth in the historic period can be attributed to growing demand for large scale cooling, increasing development of commercial infrastructure, rising industrialization in urban cities, early adoption of centralized cooling in developed regions, initial energy efficiency regulations.

The district cooling market size is expected to see rapid growth in the next few years. It will grow to $34.23 billion in 2030 at a compound annual growth rate (CAGR) of 11.5%. The growth in the forecast period can be attributed to expanding smart city projects, rising focus on sustainable building cooling, increasing investments in district cooling infrastructure, growing demand from commercial complexes, strengthening environmental policies and efficiency mandates. Major trends in the forecast period include increasing adoption of centralized cooling networks, rising development of smart energy infrastructure, growing shift toward energy efficient cooling solutions, increasing integration of advanced cooling production techniques, rising focus on large scale urban cooling deployment.

The growing emphasis on adopting sustainable energy is anticipated to drive the growth of the district cooling market. Sustainable energy refers to energy sources that are inexhaustible and can remain available indefinitely without the need for renewal or replenishment. Sustainable district cooling systems deliver environmentally friendly cooling while enhancing local environmental conditions by reducing noise levels and strengthening energy supply security. For example, in June 2023, according to the International Energy Agency, a France-based intergovernmental organization, global renewable energy capacity additions were expected to surge by 107 gigawatts (GW), marking the largest absolute increase ever, to exceed 440 GW. As a result, the increasing focus on sustainable energy adoption is contributing to the expansion of the district cooling market.

Major companies operating in the global district cooling market are increasingly concentrating on developing innovative solutions, such as geothermal energy-based district cooling plants, to address the growing demand for low-carbon and energy-efficient cooling solutions in urban regions where electricity consumption for air conditioning is particularly high. A geothermal district cooling plant utilizes deep wells to access naturally heated water, which is then supplied to absorption chillers that generate chilled water for centralized distribution, thereby reducing dependence on conventional electric chillers that rely solely on grid electricity. For instance, in December 2023, National Central Cooling Company PJSC (Tabreed), a UAE-based district cooling provider, in collaboration with Abu Dhabi National Oil Company (ADNOC), commenced commercial operations at G2COOL, the Gulf region’s first geothermal-powered district cooling facility located in Masdar City. The plant uses two geothermal wells producing water at temperatures exceeding 90°C to power absorption cooling technology and supplies approximately 10% of Masdar City’s cooling requirements, reducing grid electricity demand and supporting the UAE’s wider decarbonization and clean energy objectives.

In July 2024, Panasonic, a Japan-based electronics company, acquired Area Cooling Solutions for an undisclosed amount. This strategic acquisition aims to bolster Panasonic's presence in the European market, enhance its technological capabilities in environmentally friendly refrigeration, and meet the evolving regulatory demands related to sustainability. Area Cooling Solutions, a Poland-based company, specializes in providing a comprehensive range of products and services in the district cooling sector. This acquisition aligns with Panasonic's goals of expanding its offerings in eco-friendly solutions while tapping into the growing demand for sustainable refrigeration technologies.

Major companies operating in the district cooling market report are Emirates District Cooling LLC, National Central Cooling Company PJSC, Emirates Central Cooling Systems Corp., Qatar District Cooling Company, Marafeq Qatar, Keppel DHCS Pte Ltd., Fortum Corporation, ENGIE SA, Veolia Environnement SA, Wien Energie Vertrieb GmbH & Co. KG, Stockholm Exergi AB, Vattenfall AB, NRG Energy Inc., Vicinity Energy LLC, Dubai Aerospace Enterprise Utilities Division, Palm District Cooling LLC, Tabreed India Pvt Ltd, Muscat District Cooling Company SAOC, Bahrain District Cooling Company BSC, Saudi Tabreed Cooling Company, National District Cooling Company Egypt.

Middle East was the largest region in the district cooling market share in 2025. The regions covered in the district cooling market report are Asia-Pacific, South East Asia, Western Europe, Eastern Europe, North America, South America, Middle East, Africa. The countries covered in the district cooling market report are Australia, Brazil, China, France, Germany, India, Indonesia, Japan, Taiwan, Russia, South Korea, UK, USA, Canada, Italy, Spain.

The district cooling market consists of sales of single-effect absorption chillers, double-effect absorption chillers, and direct-fired absorption chillers. Values in this market are ‘factory gate’ values, that is the value of goods sold by the manufacturers or creators of the goods, whether to other entities (including downstream manufacturers, wholesalers, distributors and retailers) or directly to end customers. The value of goods in this market includes related services sold by the creators of the goods.

The market value is defined as the revenues that enterprises gain from the sale of goods and/or services within the specified market and geography through sales, grants, or donations in terms of the currency (in USD unless otherwise specified).

The revenues for a specified geography are consumption values that are revenues generated by organizations in the specified geography within the market, irrespective of where they are produced. It does not include revenues from resales along the supply chain, either further along the supply chain or as part of other products.

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