The global Cooling Tower Market is projected to reach USD 6.90 billion by 2035 from USD 4.31 billion in 2025, at a CAGR of 4.8% during the forecast period. The market was valued at USD 3.84 billion in 2024.

Market Overview

Key factors driving the growth of the cooling towers market include increasing industrial activities and power generation needs, rising demand for energy-efficient cooling solutions & HVAC applications in commercial buildings, and strict environmental regulations that support sustainable cooling technologies. However, high initial investment and installation costs, water scarcity and treatment issues, and maintenance and operational complexities requiring special skills are challenging the growth of this market to a certain extent.

There are also untapped opportunities in emerging markets with rapid industrialization. The integration of smart technologies and the Internet of Things for predictive maintenance, development of hybrid and modular cooling systems, and growing renewable energy sector offer significant growth potential for market players. Notable trends in this market include the use of eco-friendly and sustainable materials, modular and pre-fabricated cooling tower systems, advanced water treatment technologies, and digitalization with predictive maintenance capabilities.

Market Drivers

Increasing Industrial Activities and Power Generation Requirements

According to the IEA (International Energy Agency), global electricity demand is expected to grow by 3.4% annually through 2030, increasing the need for cooling infrastructure. Power plants make up about 40-45% of the global cooling tower market; they need effective heat rejection systems to keep operating temperatures in check and ensure reliable electricity production. As global industrialization expands—especially in emerging economies—sectors like manufacturing, chemical processing, steel, petrochemicals, and food & beverage are consuming more energy and producing more heat. These processes require efficient thermal management, making cooling towers essential to maintain operational safety and productivity.

According to the International Energy Agency, electricity demand is growing at ~3.4% annually through 2026, especially in regions like China, India, and Southeast Asia. The rise in air conditioning demand alone will add ~1,200 TWh to global electricity requirements by 2035—far exceeding growth from data centers, and largely centered in emerging economies. Power plants—both thermal and nuclear—rely on cooling towers to condense turbines and manage heat. As electricity generation expands to meet rising demand, so too does demand for cooling infrastructure. Each megawatt of installed power generation capacity usually requires cooling systems that can reject 2-3 times the electrical output as waste heat. This creates a strong need for cooling tower installations.

Industrial processes in petrochemical, steel, chemical, and manufacturing sectors produce large amounts of process heat that must be removed efficiently to maintain ideal production conditions. The growth of these industries, especially in emerging economies, is increasing the need for specialized cooling tower solutions tailored to specific industrial applications.

Rising Demand for Energy-Efficient Cooling Solutions

The increasing focus on energy efficiency and cutting operational costs is boosting demand for better cooling tower technologies. Traditional cooling towers can use 2-3% of a power plant's total electrical output for fan and pump operations. This makes energy efficiency a key concern for plant operators.

Modern cooling tower designs that include variable frequency drives (VFDs), high-efficiency fans, and improved heat transfer materials can lower energy use by 20-30% compared to older systems. Using smart controls and IoT sensors allows for real-time adjustments of cooling tower performance based on weather conditions and load needs.

The rising emphasis on sustainability and reducing carbon footprints is leading to the use of dry and hybrid cooling technologies. These methods lower water use while still providing efficient heat rejection. They are especially useful in areas with limited water supplies and for projects that aim to lessen their environmental impact.

Growing HVAC Applications in Commercial Buildings

The growth of commercial construction and the rising need for advanced HVAC systems in office buildings, shopping centers, hospitals, and data centers are creating significant opportunities for cooling tower manufacturers. Commercial HVAC systems need dependable heat rejection to keep indoor spaces comfortable and protect sensitive equipment.

Data centers are one of the fastest-growing parts of the cooling tower market. They need constant cooling to avoid equipment overheating and to ensure reliable operations. The rapid increase in data processing, cloud computing, and digital infrastructure is fueling the demand for specialized cooling tower solutions meant for critical applications.

The push for green building certifications and energy-efficient design is encouraging the use of high-performance cooling tower systems. These systems help reduce energy use and lessen environmental impact while still delivering optimal performance.

Cooling Tower Market Trends and Insights

Market Segmentation Analysis

By Product Type

On the basis of product type, the cooling towers market is divided into open circuit cooling towers, closed circuit cooling towers, hybrid cooling towers, dry cooling towers, and evaporative condensers. In 2025, the open circuit cooling towers segment is expected to hold the largest share of the overall cooling towers market. This is mainly attributed to their lower initial cost, broad use in various industries, and proven reliability in different operating conditions.

However, the closed circuit cooling towers segment is projected to grow at the highest CAGR of 5.2% during the forecast period from 2025 to 2035. This can be attributed to the rising focus on contamination-free cooling applications, increased use in sensitive industrial processes, better resistance to corrosion, and lower maintenance needs compared to open circuit systems.

By Technology

Based on technology, the cooling towers market is divided into natural draft cooling, mechanical draft cooling, and hybrid draft cooling. In 2025, the mechanical draft cooling segment is expected to lead the market, holding around 70-75% share of the overall cooling towers market. The largest share is mainly attributed to their compact design, smaller space needs, and flexibility in installation and operation for different uses.

The mechanical draft cooling segment is also projected to grow at the highest CAGR during the forecast period. This growth is fueled by rising industrial applications, increasing demand for modular and pre-fabricated systems, and better controllability compared to natural draft systems.

By Flow Type

Based on flow type, the cooling towers market is divided into counterflow, crossflow, and parallel flow. In 2025, the counterflow segment is expected to lead the market with a share of about 60-65%. This growth is due to their better thermal efficiency, compact design, and lower water use compared to crossflow systems.

The counterflow segment is also projected to grow at the highest CAGR during the forecast period, fueled by the rising demand for energy-efficient cooling solutions, increasing use in spaces with limited room, and excellent performance in different operating conditions.

By Application

On the basis of application, the cooling towers market is categorized into power generation, oil & gas refining, petrochemical, chemical processing, steel & metal production, food & beverage processing, pharmaceutical manufacturing, data centers, HVAC systems, and others. In 2025, the power generation segment is expected to hold the largest share of around 40-45% of the overall market. This is due to the ongoing increase in power generation capacity and a growing need for efficient heat rejection systems.

On the other hand, the data centers segment is anticipated to grow at the highest CAGR of 5.8% from 2025 to 2035. This growth is driven by the rapid rise in data processing needs, expansion of cloud computing, digital transformation efforts, and rising demand for critical cooling solutions that ensure reliable operations.

Regional Analysis

Based on geography, the cooling towers market is divided into North America, Europe, Asia-Pacific, Latin America, and the Middle East & Africa. In 2025, the Asia-Pacific region is expected to hold the largest share of around 45-50% of the global cooling towers market. This is due to the region's fast industrial growth, large power generation expansion, growing manufacturing sector, and increasing infrastructure development.

The Asia-Pacific cooling towers market is also projected to grow at the highest CAGR during the forecast period from 2025 to 2035. Rising industrial activities, expansion in power generation capacity, rapid urbanization leading to commercial construction, and awareness of energy-efficient cooling technologies are some of the factors driving the growth of this regional segment. China and India are driving regional growth, while developed markets such as Japan and South Korea concentrate on incorporating advanced technologies and high-efficiency solutions.

Competitive Landscape

The cooling towers market includes a mix of established industrial equipment manufacturers, specialized cooling tower firms, and engineering companies that compete on technological innovation, energy efficiency, reliability, and service capabilities. Leading players in the global cooling towers market are Baltimore Aircoil Company (BAC), SPX Cooling Technologies (SPX Corporation), EVAPCO, Inc., Delta Cooling Towers, Inc., Johnson Controls International plc, Babcock & Wilcox Enterprises, Inc., Krones AG, John Cockerill (Belgium), Kelvion Holding GmbH, ENEXIO Water Technologies GmbH, Paharpur Cooling Towers Ltd., Thermax Limited, Seagull Cooling Tower Co., Ltd., Ebara Corporation, Hamon Corporation, MITA Cooling Technologies Srl, Tower Tech, Inc., Brentwood Industries, Inc., Cooling Tower Systems, Inc., and Longhua Group, among others.

These companies focus on strategies like developing energy-efficient and sustainable cooling technologies, investing in digitalization and IoT integration, expanding hybrid and dry cooling solutions, forming partnerships with power generation and industrial firms, and growing in high-growth emerging markets to strengthen their position and reach more customers.

Cooling Towers Market Report Summary

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