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Volume demand is expected to grow 2.7% annually to 29.6 million metric tons in 2026, driven by:
growing manufacturing activity, employees returning to offices on at least a part-time basis, and rising income levels spurring gains in the construction of factories, offices, retail buildings and other nonresidential structures
efforts in the European Union and the United Kingdom to improve the energy efficiency of buildings
rising production of HVAC equipment, industrial equipment, and appliances, particularly refrigerators and freezers
India, China, & Indonesia Provide Significant Growth Opportunities
India, China, and Indonesia are projected to be among the fastest growing insulation markets globally in volume terms through 2026:
Gains in China will be driven by healthy growth in manufacturing activity, most notably for HVAC equipment (as air conditioning increasingly penetrates developing countries) and appliances (as demand increases for quieter and more energy-efficient products).
Market advances in both India and Indonesia will be driven by solid growth in building construction, particularly in the nonresidential market as both countries continue to substantially increase their manufacturing bases, resulting in a larger stock of commercial buildings requiring insulation.
Despite Weakness, Residential Market Offers Opportunities in New & Retrofit Applications
Although continued weakness in housing construction in China and a decline in single-family housing starts in the US will restrain growth in the residential building market, absolute gains will be sizable, supported by trends in both new and retrofit applications:
New housing construction will be robust in areas with rapidly increasing populations, such as the Africa/Mideast region and parts of the Asia/Pacific region, such as India, Pakistan, and Malaysia. As living standards improve in these areas, higher quality homes (which are often insulated) will be built.
Retrofit applications will benefit from a major push among the European Union and the United Kingdom to improve the energy efficiency of homes, as most of Europe aims to reduce energy consumption as the region begins to phase out imports of oil and natural gas from Russia
Historical Trends
In any given year, global demand for insulation is impacted by a number of factors including:
levels of residential and nonresidential building construction spending the types of buildings being built, as single-family houses have considerably more insulation than a multifamily unit and the amount of insulation per office and institutional building is substantially higher than manufacturing facilities and warehouses government efforts to improve housing quality or meet current shortages changes to building codes energy efficiency regulations construction or repair of infrastructure appliance, HVAC equipment, industrial equipment, automobile, shipbuilding, and aerospace production
Given the importance and widespread use of these products across several industries, insulation demand in volume terms does not experience high levels of volatility, even during times of economic crisis. Year-to-year volatility in dollar value terms is more significant, given the fluctuations in chemical prices for foamed plastic insulation, as well as currency effects relative to the US dollar. Additionally, widespread inflation in 2021 and 2022 had a major impact on average prices for all material types. Global demand for insulation is forecast to rise 2.7% per year to 33.8 billion square meters of R-1 value, equivalent to 29.6 million metric tons in 2026. Gains will be supported by:
a major push in Europe to improve the energy efficiency of buildings by adding more insulation to new construction projects – as well as retrofitting existing buildings – in order to reduce its energy usage as many EU and NATO members phase out imports of oil and natural gas from Russia a sizable expansion in nonresidential building construction in the Asia/Pacific and Africa/Mideast regions growing consumer demand for products, such as insulation, that reduce heating and cooling costs rising standards of living and greater access to air conditioning, leading to increased use of insulation and installation of insulation in retrofit applications improving construction practices in developing regions
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. Governments in a number of developing countries in these areas are working to improve housing quality, including through the adoption of minimum insulation requirements. Building Codes & Energy Efficiency
The primary goal of most building codes related to insulation is to ensure the energy efficiency of residential and nonresidential buildings. In many parts of the world, especially developed countries, these codes have become increasingly stringent, requiring the installation of higher R-value insulation products, which increases the thermal value and energy efficiency of a building. In the US, for example:
The International Code Council (ICC) sets construction standards for homebuilders, and its International Energy Conservation Code (IECC) provides minimum standards for energy efficiency in newly constructed homes, which can include an increased amount of insulation or higher R-value insulation.
In the new housing segment, state building codes regarding insulation are based on government recommendations for insulation use by climate zone.
For nonresidential buildings in the US, participation in the US Green Building Council’s (USGBC) Leadership in Energy and Environmental Design (LEED) program encourages the use of insulation that is environmentally friendly (e.g., does not degrade and release particulates into building airflows) and improves the energy efficiency of the structure (e.g., installing significantly more insulation than required by existing building codes).
In other developed countries, building codes that support energy efficiency are fairly common as well:
Programs similar to LEED can be found in a number of countries, including BREEAM (UK), GSBC (Germany), and CASBEE (Japan).
The EU has a number of directives that promote the use of insulation to make buildings more energy efficient, the most recent being the revised Energy Performance of Buildings Directive that went into effect in 2018.
Buildings codes in developing parts of the world vary greatly, although some of the largest and most economically significant countries have taken steps to improve their regulatory systems:
China’s building codes for energy efficiency – which are fairly robust for a developing country – are regulated by provinces and municipalities, but are set by its federal government and tied in to the country’s Five-Year Plans for its economy.
In Brazil, the Associação Brasileira de Normas Técnicas has set insulation standards for the country’s bioclimatic zones, with minimum thermal insulating requirements for each season.
In 2017, India revised its Energy Conservation Building Code in order to reduce energy consumption and improve ventilation and insulation in residential and nonresidential buildings.