District Cooling Market Size - By Production Technique, By Application, Growth Forecast, 2026 - 2035

District Cooling Market Size

According to a recent study by Global Market Insights Inc., the district cooling market was estimated at USD 133.6 billion in 2025. The market is expected to grow from USD 140.2 billion in 2026 to USD 200.2 billion by 2035, at a CAGR of 4%.

• Increasing urbanization coupled with rising demand for efficient space cooling in commercial and residential complexes will proliferate the business landscape. Growing emphasis on reducing carbon emissions and energy consumption in line with global sustainability targets will stimulate industry dynamics.
   
• A district cooling is a centralized cooling system that produces chilled water at a central facility and distributes it through the insulated pipelines to multiple buildings for air conditioning. It provides a cost-effective and energy-efficient alternative to individual cooling units, helping reduce electricity usage and carbon emissions.
   
• For illustration, in April 2025, Emicool secured USD 500million in green financing to support district cooling expansion projects across the UAE and wider region.
   
• Expansion of large-scale infrastructure projects including airports, malls, and mixed-use developments will accelerate the adoption of centralized cooling systems. Rising electricity costs and the need for optimized energy utilization will drive preference for district cooling over conventional air-conditioning systems.
   
• Integration of renewable energy sources such as solar thermal and waste heat recovery into district cooling networks will sway the industry expansion. Ongoing government initiatives promoting energy efficiency and green building certifications will enhance market penetration.
   
• Increasing deployment of advanced chillers and thermal energy storage systems to improve operational flexibility and peak load management will augment the business scenario. Growing investments toward modernization of existing district cooling plants and expansion of distribution networks will stimulate industry growth.
   
• For instance, in March 2025, National Central Cooling Company (Tabreed) signed a concession agreement for the PalmJebelAli district cooling project in Dubai, involving an estimated USD 410million over multiple phases.
   
• Technological advancements in automation and smart metering for real-time monitoring and control will accelerate system efficiency and reliability. Rising demand for sustainable cooling solutions in regions with extreme climatic conditions will proliferate the adoption of district cooling systems.
   
• Development of integrated utility models combining district cooling with district heating and power generation will sway the industry outlook. Increasing collaboration between private developers and utility providers for large-scale cooling projects will boost business dynamics.
   
• The district cooling market was valued at USD 118 billion in 2022 and grew at a CAGR of approximately 3.5% through 2025. Ongoing urban planning strategies emphasizing centralized cooling infrastructure for smart cities will accelerate industry expansion. Growing awareness among end-users regarding lifecycle cost benefits and reduced maintenance requirements of district cooling systems will stimulate adoption.
   
• Rising penetration of energy service companies (ESCOs) offering turnkey solutions for district cooling projects will augment the business landscape. Increasing focus on water-efficient cooling technologies and hybrid systems to address resource scarcity will sway industry development.
   
• For citation, in September 2023, SP Group, via a joint venture with Banpu NEXT, won a tender to deliver a district cooling system for Government Complex Center ZoneC in Bangkok, Thailand, with expected savings of ~20percent and 3,000tons of CO per year.
   
• Deployment of district cooling in healthcare facilities and educational institutions to ensure reliable and uninterrupted cooling will accelerate business growth. Rising integration of AI and IoT-based predictive maintenance solutions will enhance operational efficiency and reduce downtime.
   
• Growing preference for long-term concession agreements and build-operate-transfer (BOT) models will stimulate private sector participation. Increasing adoption of modular and scalable district cooling plants to cater to phased urban development will proliferate the business scenario.
   

District Cooling Market Trends

• Stringent environmental regulations aimed at reducing greenhouse gas emissions and improving energy efficiency are a major catalyst for district cooling adoption. Traditional air-conditioning systems consume significant electricity and often rely on refrigerants with high global warming potential (GWP), contributing to carbon emissions.
   
• Governments worldwide are enforcing building energy codes, emission reduction targets, and green certification programs, which encourage centralized cooling solutions. District cooling systems optimize energy use by leveraging economies of scale, reducing peak electricity demand, and integrating low-carbon technologies such as absorption chillers and thermal energy storage.
   
• For reference, in June 2025, Adani Energy Solutions announced a USD 554.3 million via its subsidiary ASCL to establish India’s largest district cooling facility (45,000RT) in Mundra, Gujarat, plus a 7,000RT project in Ahmedabad.
   
• The global shift toward sustainable energy solutions is significantly influencing the district cooling market. With rising concerns over climate change and resource depletion, stakeholders are prioritizing technologies that minimize environmental impact. District cooling systems can integrate renewable energy sources such as solar thermal, geothermal, and waste heat recovery, reducing reliance on fossil fuels.
   
• Additionally, these systems support energy efficiency by optimizing load distribution and enabling thermal energy storage, which helps balance grid demand during peak hours. Utilities and developers are increasingly investing in green infrastructure projects that align with sustainability goals, and district cooling fits seamlessly into this vision.
   
• For instance, in September 2023, Saudi Tabreed secured a 25-year BOOT concession from the KingSalman Park Foundation to provide 60,000 RT of district cooling capacity for Riyadh’s King Salman Park
   
• Accelerating urbanization and industrial growth are creating unprecedented demand for reliable and efficient cooling solutions. Expanding metropolitan areas, high-rise residential complexes, commercial hubs, and industrial zones require large-scale cooling capacity to maintain indoor comfort and operational efficiency.
   
• District cooling systems offer a centralized approach that reduces space requirements, lowers operational costs, and ensures consistent cooling performance across multiple buildings. In rapidly developing economies, government-led smart city initiatives and infrastructure investments are further promoting district cooling adoption.
   

District Cooling Market Analysis

• Based on production techniques, the industry is segmented into free cooling, absorption cooling, heat pumps, electric chillers, and others. The electric chillers district cooling market holds a share of 47.1% in 2025. Rising adoption of electric chillers in district cooling plants to deliver high-capacity cooling will proliferate the business landscape.
   
• Growing focus on energy-efficient centrifugal and screw chillers for large-scale applications will stimulate industry dynamics. Expansion of commercial and residential complexes requiring centralized cooling will accelerate electric chiller deployment. Increasing integration of variable speed drives and advanced control systems to optimize chiller performance will sway industry outlook.
   
• For illustration, in February 2025, IES R&D became a technical partner in the EU-funded “DHC SwEEtch” project to support investment planning for decarbonized district heating and cooling networks across Europe.
   
• The free cooling district cooling market is set to exceed USD 19 billion by 2035. Increasing adoption of free cooling systems utilizing ambient air or water sources to reduce energy consumption will proliferate the business landscape. Growing emphasis on minimizing operational costs and improving seasonal efficiency will stimulate the integration of free cooling in district cooling networks.
   
• The absorption cooling district cooling market was valued at USD 17.5 billion in 2025. Rising integration of absorption chillers utilizing waste heat and renewable sources will proliferate district cooling adoption. Growing focus on reducing electricity dependency and leveraging low-grade heat for cooling will stimulate absorption technology deployment.
   
• For citation, in May 2024, the EU released a study estimating USD 168billion in required district heating and cooling investments by 2030 to meet Fit-for-55 and Green Deal targets.
   
• The heat pumps district cooling market will witness a CAGR of over 5% by 2035. Increasing deployment of heat pumps for district cooling to enable reversible heating and cooling operations will proliferate the business scenario. Expansion of smart city projects incorporating multi-functional energy systems will accelerate heat pump-based district cooling networks.
   

• Based on end use, the industry is divided into residential, commercial, and industrial. The commercial district cooling holds a share of 76.7% in 2025 and is set to exceed USD 150 billion by 2035. Rising demand for efficient cooling in large-scale commercial establishments including malls, hotels, and office towers will proliferate the business landscape.
   
• Growing emphasis on energy efficiency and compliance with building codes will stimulate district cooling adoption in commercial projects. Increasing integration of smart control systems and automation for optimized cooling performance will sway industry dynamics. Deployment of district cooling in hospitality and retail sectors to ensure consistent comfort cooling will augment growth.
   
• For reference, in March 2025, KJTS Group and Stonepeak announced a joint venture backed by USD 370 million in equity and debt commitments targeting district cooling facilities across Malaysia, focusing on urban and industrial urbanization projects
   
• The residential district cooling market was valued at USD 22.7 billion in 2025. Increasing demand for centralized cooling in high-rise apartments and gated communities will proliferate the business landscape. Expansion of urban housing projects and smart city developments will accelerate residential district cooling penetration.
   
• The industrial district cooling market will witness a CAGR of over 4.5% by 2035. Increasing need for reliable and large-scale cooling solutions in industrial facilities and manufacturing plants will proliferate the business landscape. Growing emphasis on maintaining process efficiency and temperature control in heat-intensive industries will stimulate adoption.
   

• The U.S. dominated the district cooling market in North America with around 90.5% share in 2025 and generated USD 109 billion in revenue. Increasing adoption of energy-efficient cooling systems in line with stringent building energy codes will proliferate the business landscape. Deployment of district cooling systems in high-density urban areas to optimize space and reduce operational costs will augment growth.
   
• The North America district cooling market is projected to surge over USD 110 billion by 2035. Rising preference for hybrid cooling systems combining electric chillers and absorption technologies will accelerate adoption. Increasing deployment of district cooling systems in institutional facilities such as universities and hospitals will sway industry dynamics.
   
• For instance, in January 2026, the U.S. Department of Defense issued a tender valued between USD 25 million and USD 100 million for the design and construction of a district cooling plant at Wright-Patterson Air Force Base, marking a notable public-sector investment in centralized cooling.
   
• The Europe district cooling market holds a share of 35.4% in 2025. Increasing collaboration between municipalities and private operators for financing district cooling projects will sway the business scenario. Increasing adoption of district cooling in line with EU directives on energy efficiency and emission reduction will proliferate the industry landscape.
   

• The Asia Pacific district cooling market is set to grow at a rate of over 5% by 2035. Rapid urbanization and large-scale infrastructure development in emerging economies will proliferate district cooling adoption. Rising deployment of district cooling systems in high-rise residential complexes will sway industry dynamics.
   
• For citation, in October 2025, SP Group and Daikin Airconditioning (Singapore) commenced operation of Singapore’s largest industrial district cooling system at STMicroelectronics’ AngMoKio TechnoPark supporting decarbonization with significant electricity and water savings.
   
• The Middle East district cooling market was valued at USD 5.1 billion in 2025. Growing investments in mega infrastructure projects including airports, malls, and mixed-use developments will stimulate adoption. Ongoing collaboration between government entities and private operators for district cooling concessions will accelerate adoption.
   

District Cooling Market Share

• The top 5 players in district cooling industry are Tabreed, Empower, ENGIE, Fortum, and Veolia contribute around 25% of the market share in 2025. Market consolidation continues through strategic acquisitions, with operators pursuing scale advantages and geographic expansion.
   
• ENGIE positions itself as a global leader operating hundreds of urban heating and cooling networks, supported by capabilities in renewables integration, thermal storage, and free cooling. The company leverages long-term concessions and performance optimization to lower lifecycle costs and emissions for campuses, malls, and mixed-use districts.
   
• Tabreed is a GCC-based specialist widely recognized for large-scale district cooling serving landmark assets and operating 92 plants. Capacity growth and long-term concessions underpin resilient cash flows; recent deals expanded footprint, including the acquisition of PAL Cooling Holding and a concession to serve Palm Jebel Ali with ~250,000 RT showcasing disciplined scaling and project finance structuring.
   
• Empower is the world’s largest district cooling provider by connected capacity, anchored in Dubai’s high-density urban developments and supported by extensive contracted capacity growth. Empower’s integrated approach spans AIenabled predictive maintenance, advanced metering, and sustainability measures aligning with UAE Net Zero strategies and enhancing network efficiency and resilience.
   
• Veolia competes as a global environmental services leader operating over 60 district networks, with endtoend capabilities from feasibility to O&M, and strong emphasis on decarbonized, local energy sources including waste heat, biomass, geothermal, seawater. Veolia’s approach integrates engineering, project finance, and guaranteed performance, enabling lower emissions and higher reliability for cities and industrial districts.
   
• Fortum is a Nordic utility focused on lowcarbon district heating and cooling with growing electrification, thermal storage, and largescale wasteheat recovery capabilities that are increasingly relevant for district cooling, especially where natural or recovered heat sources enable absorption or heatpumpdriven solutions. Fortum’s projects harness datacenter waste heat, underscoring expertise in highefficiency heat pumps and heat recovery that can be adapted to cooling networks in European cities adopting integrated DHC.
   

District Cooling Market Companies

• For the nine months of 2025, Emirates Central Cooling Systems Corporation reported revenues of USD 704.2 million, reflecting a 5.5% increase compared to the same period in the previous year. Operating profit reached USD 241.8 million, marking a 2.3% year-on-year growth. Net profit attributable to equity holders stood at USD 185.4 million for the period.
   
• For the first nine months of 2025, ENGIE reported revenues of USD 61.6 billion, reflecting a 0.2% increase on a reported basis and 1.8% growth organically. EBITDA stood at USD 12.6 billion, representing a decline of 10.2% on a reported basis and 8.3% on an organic basis. Excluding nuclear operations, EBITDA totaled USD 11.4 billion, down 6.2% on a reported basis and 3.9% organically.
   
• In 2024, Ramboll Group reported revenues of USD 2.8 billion and achieved an operating profit (EBITA) of USD 147.2 million, corresponding to an EBITA margin of 5.4%. The order book stood at USD 1.3 billion, while organic gross revenue grew by 1.9%. Profit before tax for the year amounted to USD 91.2 million.
   

Major players operating in the district cooling industry are:

• ADC Energy Systems
• AtkinsRéalis
• Cetetherm
• Danfoss
• DC Pro Engineering
• Emicool
• Emirates Central Cooling Systems Corporation PJSC
• ENGIE
• Fortum
• Göteborg Energi
• Helen
• Keppel
• LOGSTOR Denmark Holding
• Marafeq Qatar
• Pal Group
• Qatar District Cooling Company
• Ramboll Group
• Shinryo Corporation
• Siemens
• SP Group
• Stellar Energy
• Tabreed
• Vattenfall
• Veolia
• Wien Energie
   

District Cooling Industry News

• In November 2025, ENGIE and Sunway advanced their strategic partnership by expanding the Sunway Square DCS to deliver sustainable solutions for Sunway Education Group. Building on the initial system commissioned in June 2025, the upgraded network scheduled for completion in September 2026 will provide up to 3,000 RT of cooling capacity across eight SEG buildings, including the Faculty of Engineering & Technology, Engineering Annex, and Graduate Centre.
   
• In November 2025, Empower inaugurated its Deira Waterfront district cooling plant with a production capacity of 39,000 RT. The facility will serve more than 46 buildings within the Deira Waterfront development. Designed to meet global standards and aligned with green-building principles, the plant complements the architectural identity of the area. This milestone supports Empower’s growth strategy to address rising demand for district cooling in key Dubai locations, reinforcing the emirate’s urban and economic development objectives.
   
• In October 2025, Tabreed, in collaboration with global infrastructure investor CVC DIF, completed the acquisition of PAL Cooling Holding from Multiply Group in a landmark transaction valued at approximately USD 1.03 billion. The deal secures eight long-term district cooling concessions in Abu Dhabi three on the mainland and five on Al Reem Island covering five operational plants with a combined connected capacity of 182,000 RT as of December 2024. With one plant under construction and three more in planning, total capacity is expected to reach nearly 600,000 RT.
   
• In September 2025, Emicool entered the Abu Dhabi market through a concession agreement with the Al Reef Cooling, the exclusive district cooling provider for Al Reef Downtown. Under this agreement, Emicool assumed operational control of a plant with an installed capacity of 8,005 RT and a connected capacity of 9,629 RT, serving 46 buildings, over 1,800 residential units, and approximately 36 retail outlets. This strategic move underscores the company’s commitment to expanding its footprint across the UAE through long-term concession models and implementing efficiency-driven enhancements in sustainable cooling services.
   

The district cooling market research report includes in-depth coverage of the industry with estimates & forecast in terms of revenue (USD Million) and volume (TJ) from 2022 to 2035, for the following segments:

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Market, By Production Technique

• Free cooling
• Absorption cooling
• Heat pumps
• Electric chillers
• Others

Market, By Application

• Residential
• Commercial
  • College/university
  • Office building
  • Government building
  • Others
• Industrial

The above information has been provided for the following regions & countries:

• North America
  • U.S.
  • Canada
• Europe
  • Germany
  • Poland
  • Sweden
  • Italy
  • France
  • Finland
  • Austria
  • Norway
• Asia Pacific
  • China
  • Japan
  • South Korea
  • Singapore
  • Malaysia
• Middle East
  • Saudi Arabia
  • UAE
  • Qatar
  • Oman
  • Kuwait
  • Bahrain
• Rest of World