Report Overview
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What will remain the most used type of foamed plastic insulation?
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Expanded Polystyrene (EPS) with 49% of forecasted demand
This Freedonia industry study analyzes the $27.4 billion global foamed plastic insulation industry. 
It presents historical demand data (2011, 2016, and 2021) and forecasts (2026 and 2031) by product (EPS, XPS, PUR/PIR insulation board, SPF, other foamed plastics) and market (residential, nonresidential, industrial and plant equipment, HVAC equipment, appliances, transportation equipment, other markets). The study also evaluates company market share and competitive analysis on industry competitors including BASF, Covestro, Huntsman, Kingspan, and Carlisle.
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This report includes data from 2011-2031 in 5 year intervals and tables featuring year-by-year data for 2018-2025.
Through 2026, global demand for foamed plastic insulation is forecast to increase 3.3% per year to 9.7 million metric tons, valued at $29.1 billion. Gains will primarily be driven by:
- increasing nonresidential building construction, notably in the Asia/Pacific region, where countries with fast-growing economies are constructing a variety of retail and industrial buildings.
- rising global incomes, which allow for the purchase of refrigerators, freezers, motor vehicles, and other products that utilize foamed plastic insulation for its thermal and acoustic properties
- growing efforts in areas such as the European Union and the UK to improve the energy efficiency of buildings through the use of foamed plastic insulation
While gains in volume terms will be healthy, growth in market value will slow significantly as a result of the severe moderation in foamed plastic insulation prices from their highs in 2021 and 2022, which were elevated due to supply chain issues and high raw material costs.
Developing Countries – Particularly India – Will Offer the Best Growth Opportunities
The sizable stock of substandard housing units in the Asia/Pacific and Africa/Mideast regions – which together account for over 75% of the world’s population – presents a significant growth opportunity for greater use of foamed plastic insulation. Governments of many of the developing countries in these areas are working to improve housing quality, including through the adoption of minimum insulation requirements. Additionally, foamed plastic insulation sales in these countries will be driven by:
- improving income levels and standards of living in developing countries
- rural-to-urban migration, which leads to increased construction in urban areas (where buildings generally use more insulation)
- rapidly expanding nonresidential building construction markets
Performance & Competitive Pricing Support EPS’ Popularity
EPS will remain the most used type of foamed plastic insulation, accounting for 49% of demand in 2027. Significant use of EPS will continue to be supported by:
- the ongoing use of concrete building construction methods throughout the world, as EPS used in insulated concrete forms can enhance the insulation of concrete building products without affecting their structural strength
- gains in industrial and HVAC equipment production, where EPS is favored due to its low cost, light weight, and ability to be wrapped around pipes
- its lower price compared to other foamed plastic products, which can be an important consideration in lower income markets
Historical Trends
The global foamed plastic insulation market is highly correlated to trends in building construction activity and, to a lesser extent, the production of industrial and HVAC equipment, motor vehicles, and appliances.
However, given the importance and widespread use of these products across several industries, foamed plastic insulation demand in volume terms does not experience high levels of volatility, even during times of economic crisis. Year-to-year volatility in value terms is more significant, given the fluctuations in chemical prices, as well as currency effects relative to the US dollar.
Despite a major downturn in construction in India and Central and South America in 2020, ongoing declines in single-family housing construction in China, a severe crash in the Italian and Spanish housing markets early in the historical period, the global foamed plastic insulation market in weight terms expanded at an annual rate of 3.6% from 2011 to 2021.
Pricing Trends
A number of factors influence year-to-year fluctuations in foamed plastic insulation prices, including:
- raw material prices
- supply chain disruptions
- material surpluses or shortages
- short-term economic shocks, such as the global financial crisis and the COVID-19 pandemic
Average foamed plastic insulation prices are expected to decline at an average annual rate of 1.9% to $3.00 per kilogram in 2026, as raw material prices begin to moderate:
- The years 2021 and 2022 saw unprecedented levels of price increases in the insulation industry, brought on by inflation, supply chain issues, and surging transportation costs due to higher oil prices throughout the world, all of which sent raw material prices increasing at double-digit paces in both years:
- Foamed plastic insulation products were highly impacted by inflation and supply chain issues, causing a highly volatile raw material spot market.
- Beginning in early 2021, a surge in polystyrene prices was caused by government regulations aimed to eliminate the use of HFC-134a in XPS blowing agents in the US and Canada as well as pandemic-related closures of some of the world’s largest polystyrene manufacturing plants had constricted supply and given rise to above average price inflation for this product.
- Prices for this product are expected to remain elevated in the short term.
- Both the current pricing levels and rates of growth are unsustainable, and a significant downward correction is expected by the end of 2023. The longer term pricing environment should see average prices for nearly all insulation materials to be lower in 2026 than levels seen in 2021 and 2022.
Among regions, Western Europe will see some average price growth, primarily due to a shift to higher value materials in building retrofit projects. Many countries in the region have made the installation of insulation in older buildings a priority in order to address environmental concerns by making them more energy efficient.
Competitive Materials
Foamed plastic mainly competes with fiberglass and mineral wool, as these three materials account for approximately 90% of global insulation volume demand. These materials compete directly with each other in nearly all markets, although product mix and applications can vary significantly for each product and market.
Cost is the biggest deterrent to greater adoption of foamed plastic, as it is the most expensive of the three major materials. However, foamed plastic’s superior energy efficiency boosts its use in applications where performance is of greater importance.
Foamed plastic is the dominant insulation material in the appliance industry:
- The material is easier to install in narrow spaces than fiberglass or mineral wool, and it offers sufficient energy efficiency in thin layers.
- Concerns regarding the possibility of water leaking into freezers, then condensing and freezing on fiberglass insulation, have led suppliers to uniformly adopt foamed plastic in these applications.
Foamed plastic is also frequently used in commercial buildings due to the ease with which it can be installed on steel framing. While residential buildings are also a significant market for foamed plastic insulation, the material sees greater competition from fiberglass and mineral wool in these applications, since all three materials can be attached to wood framing with relative ease.
In general, availability is the primary determinant of how commonly a particular insulation material is used in a given region:
- In North America, fiberglass is the leading material in volume terms due to its affordability and familiarity with its use among end users, as the world’s four largest fiberglass insulation manufacturers – Owens Corning, Saint-Gobain (CertainTeed), Knauf, and Johns Manville – are all either based in North America or have significant manufacturing and distribution operations in the region.
- In Eastern Europe, mineral wool is the most commonly used type of insulation because three of the largest mineral wool suppliers are headquartered on the continent.
- Foamed plastic tends to be the most used insulation type in countries with significant appliance manufacturing industries.
