Industrial Gases Market Trends

Introduction

The industrial gases market in 2023 is experiencing significant changes owing to the impact of a confluence of macroeconomic factors such as technological developments, government regulations and the changing consumer preferences. In the field of gas production and distribution, technological innovations have reduced the cost of production and the degree of contamination, while the increasingly stringent regulations are promoting the development of cleaner and more sustainable methods. Moreover, the changing preferences of the consumers towards more sustainable and efficient industrial processes are influencing the demand and supply dynamics of the market. These developments are of strategic importance to the players, as they help them to navigate the rapidly changing market landscape, and to seize emerging opportunities.

Top Trends

1. Sustainability Initiatives
   In recent years, the industry has increasingly focused on its responsibility, with many major companies pledging to reduce their CO2 emissions. For example, Air Liquide intends to be carbon neutral by 2050, in line with the goals of the international climate agreement. The shift towards greener solutions is mainly due to regulatory pressures and the growing demand for greener products. As a result, companies are investing in carbon capture and storage (CCS), a technology that will probably radically change the industry's business models in the years to come.
2. Hydrogen Economy Growth
   In Germany, hydrogen is a growing source of energy. The International Energy Agency predicts a 20 per cent increase in hydrogen production by 2022, a sign of growing industrial use. This trend is causing gas companies to increase their hydrogen business, which may lead to new markets and new forms of cooperation in the transport and energy industries.
3. Digital Transformation
   The use of digital technology is revolutionizing the industrial gases industry. For example, Linde AG has installed smart sensors in its production processes, which has resulted in a 15 percent reduction in operating costs. This trend is expected to lead to improved supply-chain management and predictive maintenance, thus enabling the industry to secure a competitive advantage.
4. Increased Demand for Specialty Gases
   The growing demand for gases in the fields of technology, e.g. electronics and pharmaceuticals, is a result of technological progress. This trend is reflected in the fact that BASF SE reported a ten percent increase in its special gases sales in 2022. There is a trend towards a greater diversification of products in order to meet the needs of special markets, which could lead to a higher margin and greater stability in the income stream.
5. Regulatory Compliance and Safety Standards
   Regulations with regard to safety and the environment are changing the operational practices in the industrial gases industry. The REACH regulation is increasing the compliance efforts of companies. It is driving the need for increased investment in safety technology and training, which is increasing operating costs, but in the long run will lead to a safer work environment and reduced liability risks.
6. Emergence of Alternative Gases
   The market is undergoing a shift towards alternative gases such as biogas and carbon dioxide, prompted by the need to meet the sustainability requirements. Iwatani is now promoting the use of biogas in industry. This trend will make the gas companies’ product ranges more varied, with new applications and customers in various industries.
7. Global Supply Chain Resilience
   The COVID-19 pandemic exposed the vulnerability of the world’s supply chains and forced companies to rethink their logistics. In the face of the resulting shortages, Air Products & Chemicals Inc. has invested in local production to offset the effects of any disruptions. This trend is expected to enhance operational resilience and reduce dependence on foreign suppliers, thereby affecting the company’s pricing strategies and market position.
8. Focus on Research and Development
   The Messer Group will be increasing its research and development budget by a further 12 percent in 2022. The main focus is on the development of new gas-based applications and technologies which could result in a competitive advantage. In the future this may include the development of more efficient production methods and the introduction of new gas mixtures for use in particular industries.
9. Collaborations and Partnerships
   Strategic alliances are becoming more common as companies seek to combine their technological skills and market reach. For example, Taiyo Nippon Sanso has teamed up with a major automobile manufacturer to develop hydrogen fuel-cell systems. This trend will foster innovation and accelerate the introduction of new products, and will have a profound effect on the competition in the industrial gases sector.
10. Expansion into Emerging Markets
    A large number of companies have been able to make use of the growth opportunities provided by the industrialization and urbanization of emerging countries. In the case of the SOL Group, this has meant taking advantage of the growing demand for industrial gases in the region. This trend is expected to lead to increased competition and the development of local industrial gas production. It will also influence the global industrial gas market.

Conclusion: Navigating the Industrial Gases Landscape

In the Industrial Gases Market in 2023, a high degree of competition and considerable fragmentation are prevailing. Both established and new entrants are striving to seize a share of the market. Region-based trends are showing a shift towards automation and the use of green gas. Accordingly, suppliers are adjusting their strategies accordingly. The established players are deploying their established distribution networks and expertise to differentiate themselves from the new entrants. The ability to integrate advanced technology and sustainable practices into the supply chain will be crucial for establishing a leadership position. To be able to meet the growing demand for sustainable solutions, suppliers need to invest in this area.