Chinese manufacturer Shanghai Highly could double its natural refrigerant business in three years due to the advancement of China’s “dual carbon” goals and Europe’s refrigerant regulations, according to Product Manager Carl Zhang.
Zhang made the forecast in an interview with NaturalRefrigerants.com, which focused on the growth of the company’s propane (R290) and CO2 (R744) business. Shanghai Highly produces CO2 (R744) and propane (R290) compressors for heat pumps and compressors for R290 air conditioners, refrigerators and freezers. It has also developed an R290-based integrated thermal management module for electric vehicles (EVs), with mass production projected to start in 2026.
“As a leading enterprise, Highly has experienced [natural refrigerant] demand growth significantly above the industry average,” Zhang told NaturalRefrigerants.com. For context, he cited data from the China Refrigeration and Air-Conditioning Industry Association, which stated that the market share of natural refrigerant compressors – produced for foreign and domestic consumption – increased from 15% in 2020 to 29% in 2023. Projections indicated that figure will rise to 40% by 2025.
Zhang also discussed the R290 residential AC market, new product developments, potential new applications and why the company decided to join the NaturalRefrigerants.com marketplace as a gold partner.
“As a leading enterprise, Highly has experienced [natural refrigerant] demand growth significantly above the industry average.”
Carl Zhang, Product Manager at Shanghai Highly
The interview has been edited for length and clarity.
What trends does Shanghai Highly see in the R290 residential AC market?
Carl Zhang: The R290 residential AC compressor has maintained a high compound annual growth rate over the past three years driven by rising market acceptance and advancing global environmental policies, including an EU limit of 150 GWP for refrigerants used in split air-conditioning systems up to 12kW (3.4TR) in size, which comes into effect in 2029. With our established large-scale supply system, we are annually shipping tens of thousands of CE and TUV certified R290 AC compressors, with Europe as the core recipient.
We’ve resolved the safety challenges associated with A3-class refrigerants by optimizing refrigerant charge control and upgrading sealing structures, with leakage rates below industry standards. The adoption of high-efficiency motors and flow channel design enables energy savings of over 10% compared to traditional compressors under the same operating conditions.
Beyond Europe, Highly is investing in emerging markets in Southeast Asia and Latin America through partnerships with local distributors. Although these regions have not yet introduced mandatory regulations, some environmentally conscious brands have started pilot adoption of R290 products.
What are the design features of Shanghai Highly’s R290 electric compressors for EVs, and how soon will they be available on the market?
CZ: Our minimal noise fluctuation R290 electric compressor features a modular design with integrated refrigerant–side components and no conventional piping, reducing internal cavity volume by over 20%. The oil separation design ensures efficient and stable oil return across the full speed range. Together with a proprietary dual–circuit oil management system, it allows stable startup at −40°C [−40°F].
Our latest R290 design with a wider speed ratio, combined with a high–efficiency motor, enables energy savings of over 30% in ambient temperatures below −5°C [23°F] compared to our previous propane compressor design. The sealing and electronic control systems comply with A3 flammability safety standards and achieve a service life of up to 15 years without refrigerant recharge.
On the customer collaboration front, Highly has established deep cooperation intentions with a leading European automaker and a major Chinese domestic brand. Both parties are currently advancing final system integration and validation procedures. All development activities have entered the final stages with a clear path towards mass production and delivery.
What other new products or markets is Shanghai Highly pursuing?
CZ: We continue to evolve our R290 series. We have launched a 1.5HP compact dual–cylinder variable-speed compressor for residential use featuring an 88mm [3.4in] housing diameter ‒ the smallest dual-cylinder design in the industry. Commercial heat pump compressors cover a capacity range of 1–26kW [0.3–7.4TR] and are capable of starting at −35°C [−31°F] and delivering hot water up to 75°C [167°F]. Through optimized design, the refrigerant charge has been reduced to below 150g per circuit.
Our new application areas include a miniature R290 compressor for the RV air–conditioning market and an R290 air–source heat pump water heater compressor capable of ultra–low–temperature operation for the industrial sector.
Why did Shanghai Highly decide to partner with NaturalRefrigerants.com?
CZ: The platform aligns perfectly with Shanghai Highly’s environmental philosophy and strategic development and helps us gain greater recognition and trust from customers, investors and the general public. Joining this platform will help Highly better understand and comply with relevant regulations, gain deeper insights into market demands and trends and showcase its natural refrigerant products and solutions.
The marketplace brings together numerous experts, enterprises and institutions from the global refrigeration industry, forming a significant platform for technological exchange and collaboration. Shanghai Highly can share its experiences and achievements in natural refrigerant technology research and product applications with other members to jointly overcome technical challenges and drive industry advancements.
