NASRC Survey: Transcritical CO₂ Will Dominate in New U.S. Retail Stores Through 2029

Transcritical CO₂ (R744) systems are poised to be the dominant refrigeration technology in new U.S. food retail stores operated by chains through 2029, according to the Food Retailer Survey Report, just released by the North American Sustainable Refrigeration Council (NASRC).

“The [U.S.] food retail industry is experiencing a seismic shift away from hydrofluorocarbons (HFCs) toward low-global-warming-potential (GWP) alternatives, such as CO₂ (R744),” the report said. The Southeast U.S. is expected to have the largest growth in transcritical CO₂ systems, despite the warmer climate in that region, the report said.

The NASRC, a nonprofit focused on promotinging adoption of natural refrigerants by food retailers, surveyed 18 chains represent over 29,000 U.S. locations across grocery, supermarket, convenience and pharmacy formats. Approximately 73% of respondents are grocery and supermarket operators while 27% run convenience and pharmacy formats. All participants operate at least 100 stores. NASRC has been running this annual survey since 2023.

The respondents collectively reported plans for over 2,000 new stores between 2025 and 2029. Of those, transcritical CO₂ systems were selected as the refrigeration system at 1,470 sites, along with 46 stores installing systems that use CO₂ as a secondary fluid and 82 locations with propane (R290) micro-distributed systems.

Retailers reported plans to replace approximately 13,400 systems by 2029 across a mix of architectures, including 2,915 transcritical CO₂ (22%), 3,518 secondary CO₂ (26%), 4,000 pumped glycol (30%) and 2,625 HFC/HFO blend (20%). The report noted that for many respondents, secondary systems are seen as a way to “stretch the dollar” across large fleets while still delivering “meaningful emissions reductions and future flexibility.”

“The [U.S.] food retail industry is experiencing a seismic shift away from hydrofluorocarbons (HFCs) toward low-global-warming-potential (GWP) alternatives, such as CO₂ (R744).”

NASRC survey

In 2029, counting both new stores and remodels, the survey projected that 19% of stores will use transcritical CO₂ systems, 48% HFC or HCFC systems, and 23% HFO blends. Total CO₂ systems (including transcritical and secondary, new and replacement) are projected to surpass 10,000 by 2029, significantly above trajectory in the 2024 survey.

CO₂ condensing units, which have only recently been introduced in the U.S., are viewed as add-ons to existing stores to support new refrigerated loads, not as primary system architectures. Projections show strong year-over-year growth in CO₂ condensing unit installations, with cumulative new installations exceeding 8,200 units by 2029. Several retailers and OEMs view this segment as a “strategic bridge technology,” particularly if incentive programs can help scale volume and drive down costs, the report said.

Currently just 5% of respondents use transcritical CO₂ while 78% use HFCs or HCFCs and 10% employ HFO blends. “The persistent use of R22 and other HCFCs was found to be higher than regulators often assume,” said the report.

The HFC/HFO blend entries in the survey typically reflect refrigerant change-outs on existing equipment, not full-system replacements, the report said. However, in discussion retailers and NASRC repeatedly emphasized that adoption of A2L (mildly flammable) refrigerants, which include HFOs and HFO blends, “remains limited in near-term planning for many chains.”

Proceeding despite uncertainty

In its 2024 survey the NASRC found that retailers projected a “step-change” in CO₂ adoption coinciding with compliance dates set by the Technology Transitions Rule of the US AIM Act. Last year the U.S. Environmental Protection Agency introduced a proposed “reconsideration” of the rule that would postpone some compliance dates.

However, he current survey shows a “flattened continuous growth as retailers move forward,” said the report. “Participants noted that this acceleration has occurred despite regulatory uncertainty, suggesting that corporate climate commitments, refrigerant risk management, and internal planning are now primary drivers of CO₂ adoption among large chains,” the report said.

Still, regulatory requirements remain the top driver to install CO₂ systems, including existing and anticipated HFC-phase-down rules under the AIM Act and state programs. The AIM Act phasedown curve, particularly the sharp reduction in available baseline in 2029, “is shaping long-term thinking about refrigerant risk and total cost of ownership,” said the report.

In addition, using natural refrigerants is seen as “future-proofing” against additional restrictions and avoiding stranded investments in refrigerants that may face availability, cost or compliance challenges. In open-ended responses, retailers characterized CO₂ as a long-term solution aligned with refrigerant phasedown goals and highlighted its very low GWP as a core environmental benefit.

The lack of skilled technicians remains a barrier to transitioning to CO₂. With regard to upfront capital cost, respondents distinguished between new-build scenarios – where CO₂ system cost premiums are often in the range of roughly 10–20% compared to R448A/R449A DX for large chains – and replacement scenarios, where the cost difference between a gas retrofit and a complete CO₂ rebuild can be orders of magnitude higher.

Regarding reliability of CO₂ systems, retailers cited uptime risks tied to controls complexity, design optimization for local climates and the consequences of release events. But they added that many of these issues “are tightly coupled to training and design practices rather than inherent to CO₂ itself,” said the report.

Additional concerns surfaced, including supply-chain capacity for CO₂ racks and components, long lead times and uncertainty around efficiency impacts in different climates. “While these did not always register as top-ranked barriers in the survey scoring, they are clearly influencing the pace of adoption,” the report said.

These survey results are informing the NASRC’s incentive program design, expansion of training initiatives and development of educational resources.

ATMOsphere, publisher of NaturalRefrigerants.com, publishes estimates of current natural refrigerant system installations around the world, based on manufacturer input, in an annual market report. The 2025 report will be published in April.