Report Overview
Featuring 215 tables and 62 figures
What is driving insulation market growth in the European Union?
- Automotive
- Aerospace
- Refrigerators and Freezers
Demand for insulation in Europe is forecast to increase 3.1% per year to $23.7 billion in 2028. In volume terms, demand is expected to grow 1.7% per year to 6.6 million metric tons in 2028. Advances in real terms will be supported by:
-
the region’s commitment to energy efficiency and other environmental policies, which will support demand for insulation in the building construction markets
-
gains in the industrial sector, particularly in Germany (which has one of the world’s largest markets for industrial and plant equipment insulation)
-
strict noise pollution laws throughout the region that support demand for acoustic insulation for industrial and transportation equipment and in manufacturing environments
However, a weak outlook for new European housing, population declines in Eastern Europe, and the continued economic fallout of international sanctions imposed against Russia will restrain stronger gains in insulation demand.
Commitment to Energy Efficiency & Climate Change Boost Insulation Demand in the EU & UK
The European Union continues to enact regulations and initiatives to combat the effects of climate change and improve the energy efficiency of buildings. The Russia-Ukraine conflict has precipitated an even larger push toward energy efficiency and carbon neutrality now that Russian imports of oil and natural gas are being phased out. Some of the means through which EU countries and the UK are addressing these needs are increased insulation usage in new building construction, commercial retrofit initiatives, and tax incentives for homeowners to better insulate their homes.
Industrial & OEM Markets to Offer Solid Gains
Through 2028, the industrial and OEM insulation markets – consisting of industrial and plant equipment, HVAC, appliances, and transportation equipment – are expected to advance at stronger paces than the building construction markets. Automotive, aerospace, and refrigerator and freezer applications will be significant drivers of growth, while the higher-volume HVAC and industrial equipment segments will offer solid advances in absolute terms. Growth in these markets continues to be driven by high disposable incomes in Western Europe.
Historical Market Trends & Growth Factors
In any given year, demand for insulation is impacted by several 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 volume does not experience high levels of volatility, even during times of economic crisis. Year-to-year volatility in market value is more significant because of fluctuations in chemical prices for foamed plastic insulation, as well as currency effects relative to the US dollar. Additionally, supply chain issues and an inflationary environment caused prices for all insulation materials to spike in 2021 and 2022.
Materials Trends
Many different materials can be used as thermal and acoustic insulation, and each possesses specific characteristics that determine its appropriateness for the job at hand, including:
While market value growth will decelerate as average price growth normalizes, volume demand growth for each material will be fairly steady:
-
Demand for mineral wool continues to be aided by increasingly stringent fire safety codes and noise pollution regulations, as it offers superior fire resistance and acoustics.
-
Foamed plastic insulation will grow at the fastest rate of any insulation material due to healthy expansion in nonresidential markets, where it is used intensively.
-
Fiberglass insulation demand will be supported by the rising number of new single-family housing units in Western Europe and use of fiberglass batts and blankets in attics and ceilings to help improve energy efficiency in these structures.
-
Small volume materials collectively accounted for only 6% of demand value in 2023. Many faster growing, higher-value renewable and environmentally friendly materials are included in this segment, helping boost demand value.
Market Trends
Demand for insulation in Europe is forecast to expand. Advances will be driven by:
-
gains in the industrial sector, particularly in Germany; that nation has one of the world’s largest markets for industrial and plant equipment insulation
-
the region’s commitment to energy efficiency and other environmental policies, which will aid demand for insulation in the building construction markets
-
strict regional noise pollution laws, supporting demand for acoustic insulation for industrial and transportation equipment and in manufacturing environments
-
rising nonresidential building construction
-
rebounding motor vehicle production, which will support gains in the transportation equipment manufacturing market
-
growth in appliance production
A decline in new housing construction in Eastern Europe will limit gains. Nearly all East European insulation growth in volume terms will derive from nonresidential markets in Poland and other East European countries.
Construction Industry Outlook
Trends in building and nonbuilding construction expenditures have a profound impact on insulation demand:
-
As new buildings and structures are built and old ones are improved and repaired, a country’s insulation needs grow.
-
New infrastructure projects, such as transportation stations require insulation for both thermal and acoustic purposes.
Increases in residential construction tend to support stronger growth for fiberglass and expanded polystyrene insulation types, while increases in nonresidential construction tend to benefit all types of foamed plastic, as well as mineral wool insulation.
Subregional real (i.e., inflation-adjusted) construction expenditures in Western Europe are forecast to increase less than 1.0% annually between 2023 and 2028, while construction expenditures will rise by 2.0% per year in Eastern Europe:
-
Although residential building spending in Western Europe will be relatively weak, it will be buoyed by a rebound in new housing construction. Nonresidential building construction will accelerate as it continues to recover from a sharp pandemic-related decline in 2020.
-
Residential building spending in Eastern Europe will decelerate as new housing construction declines. Although nonresidential building construction will increase, it will continue to be impacted by the Russia-Ukraine conflict.
Recycling & Recycled Content
Insulation suppliers can be more sustainable by offering products with recycled content or by increasing the recyclability of their products.
Including recycled content in insulation is common among the various material types:
-
Fiberglass insulation typically consists of between 40% and 60% recycled content, often from cullet obtained from recycled glass bottles.
-
Mineral wool insulation is made from iron-ore blast furnace slag, a waste product of the steel refining business.
-
Cellulose usually consists of a minimum of 75% recycled paper.
Other materials can also be recycled into insulation. For instance, old blue jeans are reused in the manufacture of Bonded Logic’s UltraTouch denim insulation.
Although recycled content can make up a significant portion of insulation, it is difficult to recycle the insulation itself due to the other additives that are used. One exception to this is foam insulation, which can be broken down chemically to base polyols and then combined with new polyols to manufacture other foam products.
Scope
This study analyzes European supply of and demand for insulation. Historical data (2013, 2018, and 2023) and forecasts for 2028 and 2033 are provided for insulation demand by material (in dollars and metric tons) and market (in dollars and square meters R-1), net exports (in dollars), and production (in dollars) on a country-by-country basis. Annual data for 2020 to 2027 is also presented. Demand in value terms is shown at the manufacturers’ level and excludes distributor and retailer markups.
Materials broken out include:
-
foamed plastic
-
expanded polystyrene, including graphite polystyrene
-
polyurethane and polyisocyanurate (e.g., rigid board and spray)
-
extruded polystyrene
-
other foamed plastics (e.g., elastomeric, phenolic, polyolefin, melamine)
-
fiberglass (including batts, blankets, loose fill, roof deck, board, and pipe and duct wrap)
-
mineral wool (including batts, blankets, board, and loose fill)
-
other materials (e.g., aerogels, cellulose, reflective insulation, radiant barriers, perlite, vermiculite, and all other insulation materials)
Granulated mineral wool used in ceiling tiles is not included in the scope of this study.
The major market segments analyzed are:
-
residential buildings (e.g., single-family, including manufactured homes, and multifamily)
-
nonresidential buildings (including, office, retail and lodging, institutional, and industrial buildings)
-
industrial and plant equipment (e.g., power generation, oil and gas, petroleum refining, chemicals, food and beverages, pharmaceuticals)
-
HVAC/air distribution equipment (including residential, commercial, and heating and air ducts)
-
appliances (e.g., refrigerators, freezers, ovens, dishwashers, clothes washers and dryers)
-
transportation equipment:
-
motor vehicles (cabins, engines)
-
aerospace equipment (fuselages, air ducts)
-
ships and boats (hulls, cabins)
-
railroad equipment (railcars, insulated cars)
-
other insulation markets, including nonbuilding construction, packaging, furniture, bedding, clothing, and off-road equipment
Both thermal and acoustic insulation are included in the scope of this study.
The metric measures of thermal value used in this study cannot be converted to English units (those used in the Freedonia Group’s US insulation studies) simply by converting square meters to square feet. The metric version of thermal value defines heat transfer in metric units (watts) and is based on a material sample one meter thick; the English version of thermal value defines heat transfer in British thermal units and is based on a material sample one inch thick.
Taking into account all the differences in measurement, approximately 16.4 square meters of R-1 value (metric system) is equal to 1,000 square feet of R-1 value (English system).