The global market for residential air conditioners using R290 (propane) refrigerant is on track to nearly double in value over the next decade. Regulatory phase-downs of high-global-warming-potential (GWP) hydrofluorocarbons and rising demand for energy-efficient cooling are driving growth. According to Future Market Insights, the overall R290 air conditioner market - encompassing both household and light commercial applications - stands at USD 12.7 billion in 2025 and is projected to reach USD 23.5 billion by 2035, advancing at a compound annual growth rate (CAGR) of 6.3 percent. The household segment alone is valued at USD 8.5 billion in 2025, forecast to reach USD 16.3 billion by 2035 at a CAGR of 6.7 percent.
Regulatory Backdrop
The shift to natural refrigerants is propelled by converging international and regional policy frameworks. The Kigali Amendment to the Montreal Protocol, adopted in October 2016 in Kigali, Rwanda, mandates a phased reduction in the production and consumption of HFCs globally. As of December 2025, 172 parties have ratified the Kigali Amendment. The United States, which ratified the amendment in October 2022, is implementing HFC restrictions through the American Innovation and Manufacturing (AIM) Act. The AIM Act requires an 85 percent reduction in HFC production and consumption from a 2011-2013 baseline by 2036.
In the United States, EPA's Technology Transitions Program imposed the first HFC use restrictions beginning January 1, 2025, requiring new HVAC and refrigeration systems in covered subsectors to use refrigerants with a GWP of 700 or lower. However, the regulatory trajectory carries uncertainty: in October 2025, the EPA released a proposed rule to extend compliance deadlines for several subsectors, including residential air conditioning and retail food refrigeration. Europe and the UK follow separate but parallel phase-down schedules under their respective F-Gas frameworks, while Asia-Pacific countries face differentiated timelines under Article 5 of the Kigali Amendment.
Market Details
Split-type air conditioners currently dominate the R290 segment. According to Future Market Insights, split-type units account for an estimated 67 percent of total R290 air conditioner market share in 2025, owing to their installation flexibility, strong energy efficiency ratings, and compatibility with R290's thermodynamic properties. The household application segment holds a 61 percent share of the overall R290 AC market.
Geographically, Asia-Pacific dominates global market growth, supported by rapid urbanization and increased residential cooling demand in China, India, and Southeast Asia. Chinese manufacturers - including Midea, Gree, Haier, and Hisense - are central to global supply, with local brands leading volume production in the affordable split-system segment. Meanwhile, Europe and North America are advancing adoption through decarbonization initiatives and government-backed refrigerant transition programs, with replacement of older HFC-based units serving as a primary demand driver. A GIZ analysis projects that global emissions from split air-conditioning systems could decrease 25 percent by 2050 if R290 units take and maintain a 50 percent market share. The same analysis found that using a 100-year GWP metric, R410A and R32 produce up to 87 times more CO2 equivalent emissions than R290.
Despite the growth trajectory, the sector faces structural constraints. A published review in Applied Thermal Engineering notes that R290's flammability presents significant challenges for residential deployment, raising concerns about feasibility in certain installation scenarios. Supply-chain pressures - including variable regional code harmonization, specialized component availability, and competition from alternative low-GWP refrigerants such as R32 and R454B - may limit growth. For the installer community, training and certification for handling flammable refrigerants are essential but not yet universally available, with smaller contractors identified as potentially under-resourced for the transition.
Safety standards continue to evolve to accommodate the refrigerant. The current IEC 60335-2-40:2022 standard permits larger charges of A3 refrigerants with mitigation measures, including improved system tightness, airflow provisions, and valving that limits leakage. Industry groups have called for subsequent revisions that reflect equipment producers' needs without imposing unnecessary costs.
Outlook
Workforce development is emerging as a parallel priority alongside manufacturing investment. GIZ's GRACE Project donated 200 R290 split AC units to 28 training institutions across Kenya in 2025 to prepare technicians for the HFC phase-down under the Kigali Amendment, illustrating the scale of upskilling required in developing markets. According to IndexBox analysis, R290 is expected to capture over 70 percent of new residential AC sales in regulated markets by 2035 as production costs converge with those of HFC-based units. For HVAC professionals, the pace of regulatory tightening across the EU, emerging Asian economies, and - pending proposed rule finalization - the United States means R290-capable installation competency is shifting from a specialist skill to a baseline requirement.
