More Than One-Fifth of New Zealand Supermarkets Use Transcritical CO₂ Refrigeration

Around 22% of the estimated 1,077 supermarkets in New Zealand are using transcritical CO₂ (R744)-based refrigeration systems, new market data shows.

By the end of 2024, approximately 240 supermarkets across the country had adopted the technology, according to Natural Refrigerants: State of the Industry 2024, a new report from ATMOsphere, publisher of NaturalRefrigerants.com. In addition to racks, transcritical CO₂ condensing units are also in use in New Zealand’s commercial refrigeration sector.

In comparison, roughly 330 of Australia’s estimated 4,295 supermarkets are thought to use transcritical CO₂ systems, representing a market penetration of 7.7%. An additional 700 supermarkets across the country are using subcritical HFC/CO₂ cascade systems. While hydrocarbon cases are used in some Australian stores, the numbers remain relatively low, the report found.

Data on convenience store refrigeration was not gathered for either country.

For industrial refrigeration, New Zealand currently has around 60 transcritical CO₂ installations, compared to 20 in Australia. Australia also has an estimated 60 industrial sites using low-charge ammonia (R717) systems. Survey respondents did not share any data on the number of ammonia systems in New Zealand.

This marks the first time ATMOsphere’s annual market report has included specific data on New Zealand and Australia. The report also covers Europe, Japan, Latin America and North America, along with insights into global refrigeration trends.

The full report can be downloaded for free here.

In recognition of the region’s growing interest in natural refrigerants, ATMOsphere will host its first ATMO Australia Summit 2025 in five years in Sydney, May 12–13. The event will bring together leading local and international HVAC&R industry experts, policymakers, end users and contractors to explore the latest advancements in natural refrigerant-based solutions.

The rise of CO₂ refrigeration

In Australia, the first supermarket transcritical CO₂ refrigeration system was commissioned in December 2007. Eight years later, New Zealand followed suit with its first transcritical CO₂ installation at a supermarket in Auckland.

Since then, retailers in both countries have continued to adopt the technology, albeit at varying rates. Several major supermarket chains – including Aldi, Coles, Woolworths and Foodstuffs – have committed to expanding their use of transcritical CO₂ in new stores and major retrofit projects.

Beyond transcritical CO₂ racks, other R744-based technologies are gaining traction in supermarkets across the region. CO₂ waterloop systems are being explored as an alternative refrigeration solution, while CO₂ condensing units continue to be used in smaller format stores. As of July 2022, Panasonic reported selling 100 R744 condensing units across Oceania, with most installed in small supermarkets throughout New Zealand.

Integrated CO₂-based refrigeration and HVAC systems are also becoming increasingly popular for enhancing store efficiency, while CO₂ heat pumps are emerging as a viable replacement for natural gas boilers in space heating applications.

The topic of HVAC-integrated transcritical CO₂ refrigeration systems will be the focus of one of the presentations at the upcoming Australian Institute of Refrigeration Air Conditioning and Heating’s (AIRAH) Refrigeration Conference 25, which is taking place March 24 in Melbourne. Natural refrigerants occupy a prominent position on the agenda, with several sessions dedicated to CO₂ and hydrocarbon-based refrigeration equipment.

As demand for R744-based solutions grows, an increasing number of manufacturers, including SCM Ref Australia, Itomic and Hussman, are introducing new CO₂ products to the local market. Johnson Controls and Trane have also announced the launch of their propane chillers and heat pumps in the Australian market.

Overcoming barriers to adoption

Stakeholders are taking a number of actions to support the adoption of natural refrigerants in Australia and New Zealand, from industry-led training initiatives to government regulation.

In June 2024, at the national level, Australia’s Department of Climate Change, Energy, the Environment and Water opened a public consultation period on policy options designed to reduce the use of HFCs in commercial refrigeration, particularly R404A. Measures include an import ban, recycled refrigerant controls and GWP limits for refrigerants used in commercial equipment, with the proposed limits varying by equipment type.

At a local level, Parramatta City, on the outskirts of Sydney, placed GWP limits on commercial refrigeration equipment back in 2022. The city enacted a new regulation requiring new air-conditioning and refrigeration equipment to use refrigerants with a GWP of less than 10.

In Victoria and New South Wales, the government is offering rebates to incentivize energy-efficient products and practices in commercial and industrial hot water applications. A large-scale air-to-water CO₂ heat pump water heater from Japanese manufacturer Itomic has been approved for the rebate scheme.

In 2022, New Zealand’s Ministry for the Environment released its first-ever emissions reduction plan with the goal of reducing its emissions by 17% over the coming decade. The plan included action on fluorinated gases, which accounted for 2% of the country’s emissions in 2019. Key actions include investigating bans on high-GWP gases and supporting capacity building to shift to alternatives with a GWP of less than 150.

Over the last few years, several manufacturers active in the Oceania market – including Beijer Ref, SCM Ref Australia, SCM Ref New Zealand, Bitzer Australia and Advansor – have launched training programs for natural refrigerant-based technologies, largely transcritical CO₂ systems.