Hazardous Area Equipment Market Size & Share Analysis - Growth Trends & Forecasts (2023 - 2028)

Hazardous Area Equipment Market Size & Share Analysis - Growth Trends & Forecasts (2023 - 2028)

The hazardous area equipment market was valued at USD 10.39 billion the previous year and is expected to register a CAGR of 6.62%, reaching USD 15.17 billion over the forecast period.

Equipment for hazardous areas is specifically designed for use in environments that are highly explosive due to the presence of combustible air-flammable gases or particulate combinations. There are multiple schemes that outline the standards for the safe design, functioning, and management of such equipment. The terminology used to describe hazards and protective measures can also vary. It is important to note that the presence of such an atmosphere is common or at least possible in numerous industrial, commercial, and scientific settings. Ensuring fire and explosion protection is crucial for the safety of employees and the reliability of operations.

Key Highlights

• The demand for hazardous area equipment is being driven by the implementation of safety regulations by various governments and the need to prevent accidents and explosions in hazardous environments. The market growth is also being propelled by technological advancements in equipment design and the growing emphasis on energy efficiency.
• Although the hazardous area equipment industry has experienced growth, there are several factors that impede its further development. The significant expenses associated with the equipment and the necessity for qualified professionals to operate them are the primary obstacles affecting market expansion. The absence of uniform standards and certification for hazardous area equipment, along with the limited accessibility of these products in remote areas, pose substantial challenges to the market's growth.
• There is also a growing demand for flame- and explosion-proof hazardous area equipment, such as industrial controllers, cable glands, motors, sensors, strobe beacons, lighting, and other related items, due to the heightened emphasis on safety measures in sectors like process and cooling industries. Also, the increasing focus on enhancing safety measures in various industries, specifically in process and cooling sectors, is leading to a rise in demand for hazardous area equipment and is expected to experience substantial growth in the forecast period.
• The equipment used in the hazardous area is securely enclosed to prevent any potential hazards. These equipment are typically made of sturdy materials such as die-cast steel and sometimes plastic. The enclosure effectively prevents explosions in case of faulty equipment generating heat or sparks. Additionally, different countries have their own methods of ensuring the safety of equipment used in hazardous areas. While these equipment offers benefits, their deployment can be quite costly, and they can become quite heavy. As a result, the high initial cost of implementing hazardous area equipment is hindering market growth.
• Several macroeconomic factors, primarily the COVID-19 outbreak and the lockdown restriction imposed worldwide, affected global capital investments and industrial activities. Additionally, the uncertainty surrounding Russia's conflict with Ukraine and its impact on global stability suggests that the issue of inflation has not been resolved. The persistence of food and fuel inflation poses an ongoing economic challenge. Additionally, increased retail inflation is likely to affect consumer confidence and spending. However, it has been observed that the increase in industries that rely on hazardous area equipment is driving the growth of the hazardous area equipment industry. Factors such as the growing importance of emerging economies are leading to the establishment of numerous businesses that heavily depend on hazardous area equipment, thus contributing to the expansion of the global hazardous area equipment industry.

Hazardous Area Equipment Market Trends

Oil and Gas End-user Industry Segment is Expected to Hold Significant Market Share

• In the oil and gas industry, explosion proofing has two requirements: equipment must be manufactured to the appropriate standards and installed and maintained in accordance with additional standards. Also, oil and gas employees are frequently required to work in dangerous environments. Safety is significant when flammable liquids, gases, vapors, or combustible dust are present in substantial amounts. Such requirements are creating increasing demand for hazardous area equipment in the coming years.
• The market is witnessing various innovations to assist customers in the daily construction, operation, optimization, and enhancement of their assets and provide alternative electrical solutions in more hazardous situations. Moreover, the discovery of oil reserves and upcoming investments in the exploration processes is expected to drive the demand for hazardous area equipment. For instance, the International Energy Agency said that by 2040, the world's demand for oil will go up by 21%, making it the source of 35% of all energy, and the demand for natural gas will go up by 31%, making it the source of 17% of all energy.
• Additionally, the increasing demand for crude oil and finished oils, including heating oil and diesel fuel in the automobile, energy, machinery manufacturing, electricity, chemicals, and metallurgy sectors has further boosted the need for more oil and gas exploration processes, indirectly driving the demand for hazardous area equipment. The demand for crude oil (including biofuels) in 2022 globally amounted to approximately 99.57 million barrels per day, and it is forecasted to increase to 101.89 million barrels per day in 2023.
• Hazardous locations are primarily found in the oil and gas industry, as areas with limited presence of combustible gas are high. According to GECF, in December 2022, natural gas consumption in China amounted to 33.5 billion cubic meters (bcm). In addition, according to the IEA, the country is expected to account for 280 billion cubic meters of global natural gas demand by 2040. It also has the potential to overtake the United States as the ultimate oil consumer by 2030, with 13 million barrels per day net imports by 2040. Such expansion in the oil and gas industries may further propel the market's growth.
• The government's Oil Ministry's earlier announcement related to the spending of around USD 118 billion in the oil and gas exploration and setting up of natural gas infrastructure in India over the next few years, which USD 58 billion would be funded in oil and gas exploration and exhibition, by 2023 while USD 60 billion will be put in the development of natural gas infrastructure, such as pipelines, import terminals, and city gas distribution networks by 2024.​ Thus, the market is anticipated to witness significant growth.

Asia-Pacific is Expected to Hold Significant Market Share

• China is one of the significant producers and exporters of manufacturing equipment and machine tools worldwide. The surge in manufacturing activities over the last decade has increased the production of equipment and tools. Therefore, this growth is impacting the rate of adoption of explosion-proof equipment.​ According to Semiconductor Equipment and Materials International, in 2022, the sales revenue from semiconductor equipment in China reached almost CNY 1.38 trillion (USD 0.19 trillion).
• The increasing adoption of automation in manufacturing procedures is expected to propel the demand for explosion-proof solutions. At many industrial and manufacturing plants, personnel periodically perform field inspections by patrolling along defined routes and checking field devices at specific points to keep facilities and equipment safe and in good working order.
• India is frequently investing in the studied market growth due to the increase of industrialization and the development of Mining industries in the country. Additionally, India's mining sector has expanded due to a new government that is pro-industry. According to MOSPI, at the end of fiscal year 2022, production of the mining industry across India increased by about 12%.
• Further, according to IBEF, the government plans to monetize assets worth INR 28,727 crore (USD 3.68 billion) in the mining sector over 2022-25. Additionally, in February 2023, JSW Group announced the construction of a steel plant in Andhra Pradesh's YSR Kadapa district with an investment of INR 8,800 crore (USD 1 billion). Such developments in the metals and mines plants may further create demand in the studied market.
• Japan is one of the significant manufacturers of automobiles and electronic equipment, and the demand for these products is increasing rapidly worldwide. This factor has led to the rise in construction and upgrading manufacturing facilities to meet global demand and provide new and innovative products. To facilitate this, machinery is required to carry out the activities, thus increasing the growth of explosion-proof equipment in the manufacturing sector.​

Hazardous Area Equipment Industry Overview

The hazardous area equipment market is quite competitive, with several well-established players competing for market share. Among the prominent companies in this industry are ABB Ltd, Eaton Corporation, Honeywell International Inc., Siemens AG, and Rockwell Automation Inc.

These companies possess a robust international influence and provide a diverse array of hazardous area equipment, including explosion-proof lighting, communication tools, control systems, and sensors. To uphold their standing within the market, these companies prioritize innovation, product advancement, and strategic partnerships.

In addition to these established players, there are several new entrants and startups emerging in the hazardous area equipment industry. These companies have the ambition to revolutionize the market with their innovative and advanced products, which bring enhanced safety and efficiency. Nevertheless, they encounter strong competition from well-established players who have already built a solid brand reputation and loyal customer base.

• May 2023 - ABB Ltd announced the opening of its USD 3 million Robert M. Thomas Innovation Center in Memphis, Tennessee, to accelerate the development of next-generation electrification solutions.
• August 2023 - Eaton Corporation PLC company announced to showcase its new industrial solutions for hazardous areas at Automation Expo 2023. It will introduce Ethernet over Coax (EoC) CCTV solution, nHLL linear LED fixture used in Zone 2 and 21 and 22 hazardous areas, and Smart Universal Marshalling (MTL SUM5) for industries such as oil & gas, chemical processing, and wastewater treatment.

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