In 2025, the global variable refrigerant flow (VRF) market, based on outdoor units, experienced a clear divergence. Overall, the market contracted by 4.1% year on year to 2.721 million units, driven primarily by sharp declines in the two leading markets, China and Japan. However, excluding these two countries, most regions worldwide recorded solid growth, achieving an average increase of 6.9%. This growth was primarily driven by strong cooling demand fueled by frequent extreme heat episodes, as well as by building electrification and energy-saving subsidy policies implemented by various governments to meet decarbonization targets. With their advantages of independent zone control, exceptional inverter energy-saving operation, and flexible system design, VRF systems have become the preferred solution for air conditioning across a wide range of applications, from residential andcommercial to industrial sectors. At the same time, the global VRF market continues to face significant challenges in transitioning to next-generation, low-global warming potential (GWP) refrigerants. As environmental regulations become increasingly stringent, identifying sustainable alternatives that balance environmental performance, system safety, and economic feasibility has become a key technical challenge for global manufacturers.
EUROPE
The European VRF market grew by 5.7% year on year in 2025, successfully bucking the regional economic trend. Growth was driven by office renovations and the recovery of the tourism sector, which led to higher occupancy rates in hotels and other hospitality facilities, prompting refurbishment and system upgrades. As a result, replacement demand has strengthened significantly, now accounting for about 60% of total sales.
The Turkish market performed favorably, achieving a mid-single-digit increase, with both the mini-VRF and VRF segments performing well. Poland continued to expand steadily, driven by an investment resurgence. While alternative refrigerants are rapidly gaining traction in the mini-VRF segment, the transition to low-GWP refrigerants in larger-capacity VRF systems continues to face the dual challenges of safety and cost.
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SOURCE:IMF
