Phase Change Material Market

Key data points: Market size in 2027 = $1.1 million and 2035 = $3.1 million, growth forecast = 15.4% annually for the next 8 years. Scroll below to get more insights. This market report covers trends, opportunities and forecasts in phase change material market to 2035 by product form (organic, inorganic, bio-based, and others), end use (building & construction, HVAC, cold chain & packaging, thermal energy storage, electronics, textile, and others), and region (North America, Europe, Asia Pacific, and the Rest of the World) Phase Change Material Market The future of the global phase change material market looks promising with opportunities in the building & construction, hvac, cold chain & packaging, thermal energy storage, electronic, and textile markets. The global phase change material market is expected to reach an estimated $3.1 million by 2035 from $1.1 million in 2027 with a CAGR of 15.4% from 2027 to 2035. The major drivers for this market are the increasing demand for energy-efficient buildings, the rising adoption in renewable energy storage, and the growing demand for awareness about energy conservation. • Lucintel forecasts that, within the product form category, organic is expected to witness the highest growth over the forecast period due to their high chemical stability and bio-based biodegradability. • Within the end use category, building & construction is expected to witness the highest growth over the forecast period due to rising global demand for energy-efficient green buildings. • In terms of regions, APAC will remain the largest region over the forecast period due to rapid urbanization and massive commercial infrastructure growth. Gain valuable insights for your business decisions with our comprehensive 150+ page report. Sample figures with some insights are shown below. Emerging Trends in Phase Change Material Market It is anticipated that from 2025 to 2027, the phase change material market would expand beyond thermal storage in buildings. Other markets would include cold chain logistics, electronic devices and batteries. Decreasing costs of encapsulation, and more stringent energy and CODES, and demand for earned energy service LOTs would further drive the market growth. According to Lucintel, the market is shifting from trial and error projects to the specification stage. • Sustainability: From 2025 to 2030, the focus would be on reducing peak energy demands. The use of phase change materials in conjunction with phase change Insulation would help with reducing energy demands. Life cycle assessments of PCM are expected to drive further research and development in the area. • Digital Manufacturing: In 2026, further improvements in the field of micro-encapsulation would lead to the creation of digital twins that help in placement of PCM in walls and battery packs. • Functional Products: Results from 2025 show PCM products targeted to specific temperature ranges will become more commonplace due to the increasing demand for thermal management systems. • Supply-chain Diversification: From 2025-2027, clients from the U.S. and Europe will prefer that PCM supply chains be locally sourced, processed, and/or encapsulated. Simultaneous sourcing will allow for more flexible supply, and optimized inventory. • Circular Economy: By 2027, clients will require PCM systems be recoverable and/or replaced so that whole systems do not have to be replaced. Clients will give preference to systems with the lowest embedded carbon. The PCM market will continue to grow due to increased emphasis on building and city level decarbonization. Emerging markets will primarily focus on financial returns and building level efficiencies. Supply will be heavily reliant on internal combustion engine phasing out. The technical markets (batteries and data centers) will present the strictest standards and require the most cyclical thermal PCM products. Design-for-removal-or-replacement will be especially important for building systems in the near-term. The focus for PCM product suppliers should be market differentiation based on thermal performance and recyclability. Recent Developments in the Phase Change Material Market The market for Phase change material is expected to grow from 2025 to 2027. This will be due to increased investment in data center cooling and cold chain logistics as well as improvements in building energy efficiency and building thermal energy storage. Although many barriers still exist for the commercialization of PCM, investment is shifting to commercialisation. The cycling stability and type of PCM being researched are of greater interest to investors. • PCM Systems for Data Center Cooling: Several thermal management companies are developing PCM systems for data center cooling. Schneider Electric estimated that its data center infrastructure revenue for 2025 would be 17% higher than its 2024 data center infrastructure revenue. Increased investment in data center cooling will drive the PCM market in the next 3-5 years. • Energy Storage and PCM: The European Commission's 2025 investment in energy storage and other government funded storage projects will move PCM systems for energy storage from a product to a service business model. Additionally, the projects will further improve the economics of the PCM systems. • Expansion of Cold Chain: A greater emphasis is being placed on ensuring stable and unbroken supply chains for the distribution of temperature sensitive pharmaceuticals. DHL Supply Chain has announced an investment of over €500 million in life sciences for the period up to 2025. Premium PCM packs will find greater market acceptance, especially for high-value biologics. • Launch of Bio-based Products: Petroleum based paraffins have been replaced by renewable plant based oils, and fats in PCM formulations. Expanding its renewable product portfolio, Croda expects its sales to touch £1.7 billion (2025). PCMs find greater specification in construction and other applications. • Change in Building Codes: The European Union’s Energy Performance of Building Directive, 2010, has been updated and member nations are required to amend their building codes to meet the new directive by 2026. Similar legislation are expected to be enacted by other countries as well. These amendments are expected to fuel retrofitting of commercial and other buildings. PCM based wall and ceiling insulation, and phase change HVAC systems are expected to gain market acceptance. PCM is expected to find larger market in buildings and construction. Although data centres and cold chains provide larger and more lucrative markets in the near term. PCM manufacturers should focus on product differentiation to gain market edge. Strategic Growth Opportunities in the Phase Change Material Market From 2024 to 2026, multiple trends including the proliferation of data centers and cold-chain logistics, the adoption of building efficiency and electrification, will increase the requirement for thermal management. For PCM, there is a stronger focus on improving encapsulation, which is easing market acceptance. Additionally, customers are looking for thermal solutions, as opposed to volume. • PC/Thermal Management of Data Centers: PCM modules incorporated in liquid cooling systems create opportunities in data center and network equipment. PCM modules integrated in backup systems also offer similar benefits. According to the IEA, data centers consumed 415 TWh of electricity in 2024 (released in April 2025), and this number is anticipated to increase. pc/Thermal Management of Data Center Equipment can enable data center operators to improve energy efficiency and increase the density of equipment racks. • PC/Thermal Management of Electric Vehicle Batteries: Thermal management of batteries is essential for limiting the rate of thermal runaway. PCM can be incorporated in electric vehicle batteries for similar benefits. According to the IEA, the worldwide sales volume of electric vehicles exceeded 17 million in 2024 (released in April 2025). Thermal barriers will be incorporated by battery and electric vehicle manufacturers for pc/Thermal Management to limit the rate of charged the battery and to manage the temperature of the battery during use. • Cold-chain Packaging: The U.S. FDA states in their 2025 guidance that they will permit reliance on controlled storage bands to facilitate the shipment of temperature sensitive medicinal products at 2-8°C.PCM based thermal Latent Heat Storage Systems (LHSS) can be cycled multiple times, thus reducing logistic costs, improving sustainability and providing a large improvement over dry ice based systems. • Energy Efficient Buildings: The use of phase change materials in boards, plasters, and ceilings help reduce the peak cooling demand. The European Commission states that buildings account for approx. 40% of EU energy consumption (March 2025). Given the focus on energy reduction and sustainability, demand for similar products for building retrofits will increase. • Textile and Apparel: The use of phase change materials in work and sports apparel helps regulate skin temperature and enhances comfort. According to the U.S. Bureau of Labor Statistics, 2.6 million injuries happened in the workplace in 2023 (November 2025). Thermal regulation in work apparel will help increase employee productivity and reduce injuries. Over the next 5 years, the focus will be on the performance rather than the bulk of the material used. Leading companies will be those who have qualified their products for different applications. The integration of regional supply, distribution and application know-how will facilitate leadership in the sector. Products integration with related services will lead to high profitability. Phase Change Material Market Drivers and Challenges Advances in technology and various other forces including the economy, ecology, and law, affect PCM markets. More efficient PCM products are leading to better energy management and innovation. Some barriers, such as the cost of PCM products and variability in PCM product performance, remain for producers and consumers. The factors responsible for driving this market include: • Demand: New applications of PCMs are facilitated by growing customer demand for energy savings in building design and construction, transportation and storage of temperature-sensitive drugs and other pharmaceuticals, as well as thermal management in batteries. The International Energy Agency’s World Energy Outlook 2021 reported over 1 million electric vehicles (EVs) were sold in 2025, creating a larger and more urgent need for effective PCMs to manage the batteries’ thermal stability. The combined effects of the aforementioned trends of increased urbanization, electrification of transportation, and growing PCM use in building construction and other industries, are expected to provide steady PCM markets through 2028-2030. • Improvements in Technology: PCM reliability is increasing with advances in encapsulation and composite formulations and with the use of renewable materials. Thermal cycling tests are also used to evaluate PCM performance. In March 2025, storage materials that enable the use of PCMs over the temperature range of 212 °F (100 °C) were reported. Increased performance of PCMs will allow reduced loss, increased service life, and encourage its use for various applications such as battery, data center and other energy storage systems. • Supportive Regulations: The need to store thermal energy for use in various applications in an energy efficient and (near) zero carbon emission way is driving the use of PCMs in building construction and other industries. In April 2025, the European Union (EU) adopted new rules to further implement the Climate Action Plan which targets a 55% reduction in carbon emissions by 2030. PCMs will be used extensively in buildings and other infrastructures within the EU in the next 3-5 years. • Sustainability: PCMs are used for thermal energy storage and are manufactured using petroleum products. Thermal storage products made with biobased materials are gaining popularity. PCM manufacturers have a goal of producing net zero emissions in the next 3-5 years. • Increased Manufacturing: Thermal storage systems are bulkier and larger. Improvements in production systems and standardization of encapsulation will help reduce PCM costs. PCM solutions will be economical for use in large structures (i.e. commercial and industrial buildings, transport and logistics) within 3-5 years. The challenges facing this market include: • High Initial Costs: PCM systems can cost more to implement compared to traditional methods of insulation, cooling and heating. In February 2025, the energy storage projects focused on commercial and industrial applications had a project payback period of between 5 to 10 years. It is anticipated that in the next 3 to 5 years PCM systems will not gain broader market acceptance by smaller customers due to the cost of PCM systems relative to other systems, lack of financing, and uncertainty about the energy savings potential. • Insufficient Performance and Reliability: PCMs are susceptible to a number of performance degrading conditions including leakage, phase separation, supercooling, flammability and degradation. In July 2025, building-integrated thermal energy storage systems (BizzStor, Ice TES) underwent testing to assess their performance and reliability over 1,000 charge/discharge cycles. The PCM industry will continue to focus on performance and reliability of their products as end customers will not accept products that have unsafe failures and do not maintain performance requirements over time (e.g. batteries, data storage systems and aerospace systems). • Constraints on Supply Chains and Standards: Reliance on specialty chemicals, limitations in supplier approvals, and variability in test methods, can affect time to market. In October 2025, the 10% and greater variations in the cost of chemicals and polymers used in the manufacture of materials and advanced composites, created supply uncertainties. In the next 3-5 years, to increase customer confidence and reduce disruptions in the supply of advanced materials, it will be necessary to establish local systems for the testing and recycling of materials, as well as supplier networks. The increasing global emphasis on sustainable development and energy efficiency will create opportunities for the PCM market. Regulatory frameworks will remove barriers for PCMs in building and transport sectors. PCMs will also find uses in other sectors, such as cold chains. PCMs, however, will be limited to niche markets due to high costs and a lack of reliable standards. PCMs will have to consistently demonstrate measurable benefits in terms of energy savings. The viability of PCMs will depend on integrating energy savings with other benefits, such as improvements in price and performance, reliable standards and frameworks, as well as consistent supply. List of Phase Change Material Market Companies Companies in the market compete on the basis of product quality offered. Major players in this market focus on expanding their manufacturing facilities, R&D investments, infrastructural development, and leverage integration opportunities across the value chain. Through these strategies phase change material market companies cater increasing demand, ensure competitive effectiveness, develop innovative products & technologies, reduce production costs, and expand their customer base. Some of the phase change material market companies profiled in this report include- • Honeywell • DuPont • Sasol • Croda • PureTemp • Pluss Advanced Technologies • Phase Change Energy Solutions • Rubitherm Technologies • Phase Change Materials Products • Outlast Technologies Phase Change Material Market by Segment The study includes a forecast for the global phase change material market by product form, end use, and region. Phase Change Material Market by Product Form [Value ($M) from 2019 to 2035]: • Organic • Inorganic • Bio-Based • Others Phase Change Material Market by End Use [Value ($M) from 2019 to 2035]: • Building & Construction • HVAC • Cold Chain & Packaging • Thermal Energy Storage • Electronics • Textile • Others Phase Change Material Market by Region [Value ($M) from 2019 to 2035]: • North America • Europe • Asia Pacific • The Rest of the World Country Wise Outlook for the Phase Change Material Market Commercial development of phase change material (PCM) technologies is emerging in the areas of data center cooling, thermal energy storage, building energy and strict battery safety. Leading PCM manufacturers will focus on increasing the number of PCM cycles and developing PCM systems integrations from 2025 to 2027. Lucintel has recently released a report indicating that new investments are being made for PCM applications in the building and heavy industry. • United States: PCM opportunities exist in heating and cooling equipment for data centers as well as cold chain logistics. PCM technologies offer an effective solution for energy storage. The U.S. Department of Energy (DOE) has awarded grants worth a total of $40 million for the development of 8 energy-intensive projects, including 3 projects focused on the utilization of PCM for data center equipment. • China: PCM has applications for battery storage. Contemporary Amperex Technology Co. Limited (CATL) announced the release of its second-generation TENER energy storage system in April 2025 with an energy storage capacity of 6.25 MWh. PCM offers battery safety by providing pack-cooling solutions. • Germany: Demand for PCM technology in building and industry is expected to increase in the coming years. The German Federal Ministry for Economic Affairs created a 500 million euro program in March 2025 to improve climate neutrality of German industries. This should create an improved framework to reward companies for improving the energy efficiency of their factories. • India: In February 2025, the Indian government increased the capital expenditure budget by 25% to 11.21 trillion rupees. Further, in the past few years, the government launched several schemes to promote the local manufacturing of electronics and data centers. With the increased local manufacturing, there is potential for the thermal management of facilities through Phase Change Materials (PCMs). • Japan: In September 2024, Rapidus started the construction of a 2 nanometre semiconductor pilot line in Hokkaido. In PCMs, thermal management is critical for several semiconductor processes and is expected to gain traction in the semiconductor supply chain in Japan. Features of the Global Phase Change Material Market Market Size Estimates: phase change material market size estimation in terms of value ($M). Trend and Forecast Analysis: Market trends (2019 to 2026) and forecast (2027 to 2035) by various segments and regions. Segmentation Analysis: phase change material market size by product form, end use, and region in terms of value ($M). Regional Analysis: phase change material market breakdown by North America, Europe, Asia Pacific, and Rest of the World. Growth Opportunities: Analysis of growth opportunities in different product form, end use, and regions for the phase change material market. Strategic Analysis: This includes M&A, new product development, and competitive landscape of the phase change material market. Analysis of competitive intensity of the industry based on Porter’s Five Forces model. If you are looking to expand your business in this or adjacent markets, then contact us. We have done hundreds of strategic consulting projects in market entry, opportunity screening, due diligence, supply chain analysis, M & A, and more. This report answers following 11 key questions: Q.1. What are some of the most promising, high-growth opportunities for the phase change material market by product form (organic, inorganic, bio-based, and others), end use (building & construction, HVAC, cold chain & packaging, thermal energy storage, electronics, textile, and others), and region (North America, Europe, Asia Pacific, and the Rest of the World)? Q.2. Which segments will grow at a faster pace and why? Q.3. Which region will grow at a faster pace and why? Q.4. What are the key factors affecting market dynamics? What are the key challenges and business risks in this market? Q.5. What are the business risks and competitive threats in this market? Q.6. What are the emerging trends in this market and the reasons behind them? Q.7. What are some of the changing demands of customers in the market? Q.8. What are the new developments in the market? Which companies are leading these developments? Q.9. Who are the major players in this market? What strategic initiatives are key players pursuing for business growth? Q.10. What are some of the competing products in this market and how big of a threat do they pose for loss of market share by material or product substitution? Q.11. What M&A activity has occurred in the last 7 years and what has its impact been on the industry?