EXTERNAL WALL INSULATION BOARD MARKET SIZE AND SHARE ANALYSIS - GROWTH TRENDS AND FORECASTS (2023 - 2030)

The External Wall Insulation Board Market size is expected to reach US$ 14.87 billion by 2030, from US$ 8.46 billion in 2023, at a CAGR of 8.4% during the forecast period.

External wall insulation boards are sheets of insulation materials that are affixed to the exterior walls of a building to enhance thermal efficiency and reduce heat loss. They provide benefits such as improved indoor comfort, reduced energy bills, prevention of moisture ingress and mold growth, and lower carbon emissions. The growth is driven by rising energy costs, government regulations on building energy efficiency, and increasing adoption of green buildings.

The External Wall Insulation Board Market is segmented by material type, end-use sector, application, and region. By material type, the market is segmented into mineral wool, expanded polystyrene, extruded polystyrene, polyurethane foam, phenolic foam, and others. Mineral wool is expected to dominate the material segment owing to its high fire resistance and thermal performance.

External Wall Insulation Board Market Regional Insights

• North America is expected to be the largest market for External Wall Insulation Board Market during the forecast period, accounting for over 38% of the market share in 2022. The growth of the market in North America is attributed to stringent building codes and policies focusing on enhancing energy efficiency of buildings in the region.
• The Europe market is expected to be the second-largest market for External Wall Insulation Board Market, accounting for over 32% of the market share in 2022. The growth of the market in the region is attributed to government regulations like the Energy Performance of Buildings Directive which mandates energy efficiency in buildings.
• The Asia Pacific market is expected to be the fastest-growing market for External Wall Insulation Board Market, with a CAGR of over 9% during the forecast period. The growth of the market in Asia Pacific is attributed to rapid urbanization and increasing construction activity, especially in emerging economies.

Figure 1. Global External Wall Insulation Board Market Share (%), by Region, 2023

External Wall Insulation Board Market Drivers

• Government regulations for energy efficiency: Energy efficiency has become a top priority for governments worldwide. Various regulations and policies are being implemented to reduce energy consumption in the building sector, which accounts for around 40% of global energy usage. Stringent building codes mandating the use of insulation in new constructions as well as existing buildings are driving the external wall insulation board market. For instance, the European Performance of Buildings Directive requires all new buildings to be nearly zero-energy by the end of 2020. Similar regulations like LEED in the US and BREEAM in the UK are also catalyzing the adoption of insulation boards.
• Rising energy costs: The continuous rise in electricity and gas tariffs globally is making energy-efficient buildings more attractive. External wall insulation can help in reducing heat loss through building envelopes, lowering energy consumption for heating/cooling by up to 50%. With energy prices forecasted to increase further, energy savings will be a key factor spurring the installation of insulation boards in residential and commercial buildings. Moreover, increasing consumer awareness regarding the long-term cost benefits is boosting product adoption.
• Growth in construction sector: The steady growth of the global construction industry is fueling the external wall insulation board market. According to industry estimates, the volume of construction output will increase by 85% to $15.5 trillion worldwide by 2030, with countries like China, US and India leading the way. Along with new building construction, rising investments in building renovations and retrofits to improve energy efficiency is also driving insulation board sales. The easy installation and high efficiency of external wall insulation boards make them ideal for new construction as well as renovation projects.
• Lower environmental impact: External wall insulation boards are manufactured using materials like foam, wood fiber, mineral wool, etc. which have much lower embodied energy and carbon emissions compared to conventional insulation materials. Growing environmental awareness among consumers and mandates on reducing buildings' carbon footprint are increasing the adoption of eco-friendly insulation boards. Moreover, most insulation board types can be recycled, resulting in less construction waste. The environmental benefits of external wall insulation boards are thus enhancing their market growth.

External Wall Insulation Board Market Opportunities

• Emerging new applications: While external wall insulation boards currently dominate the building insulation sector, new application areas are emerging. Rising adoption in the marine and offshore industry for insulating ship hulls and offshore oil & gas platforms represents a lucrative opportunity. The automotive sector is also utilizing insulation boards for temperature control in truck bodies and railway transport. Furthermore, underfloor insulation for residential and commercial spaces is gaining traction. Product manufacturers can gain an edge by developing boards targeted for these niche applications.
• Rapid urbanization in developing countries: Developing economies like India, Brazil, Indonesia, etc. are undergoing rapid urbanization, with mass migration to cities. This is resulting in an exponential growth in residential and commercial building construction to accommodate the rising urban populace. Though insulation material adoption remains low currently, huge potential exists due to the massive development pipeline and improving consumer awareness. Companies can gain a first-mover advantage by entering these untapped markets which will drive future industry growth.
• Technology advancements: Investments in R&D to develop innovative insulation materials is creating lucrative growth avenues. For instance, aerogel blankets offer high thermal performance despite very low thickness. Phase change materials (PCM) for thermal energy storage are also gaining interest. Nanotechnology-enabled insulation shows promise for enhanced efficiency. Adoption of technologies like IoT can enable smart monitoring and control. Introduction of high-performance insulation boards with advanced capabilities can help manufacturers differentiate their offerings.
• Supportive government policies: Many governments are rolling out financial incentives and rebate programs aimed at enhancing insulation adoption by homeowners and businesses. Tax credits, subsidies, and low-interest loans for retrofitting existing buildings with insulation help in overcoming initial cost barriers. Government backing for R&D initiatives related to advanced insulation materials also encourages further product innovations. Such policy measures and public funding assistance will bolster growth for external wall insulation boards.

External Wall Insulation Board Market Trends

• Shift towards green buildings: Sustainability has become a priority in the building sector, with ‘green buildings’ gaining immense popularity. These sustainable structures emphasize energy efficiency, renewable energy usage, water conservation, waste reduction, etc. External wall insulation is a key component to enhance a building's energy performance and achieve green certifications like LEED and BREAAM. The shift towards environmentally-friendly green buildings is thus propelling insulation board deployment. Incentives for green construction by governments are further accelerating this trend.
• Innovation in insulation materials: Manufacturers are investing significantly in developing advanced insulation materials to gain a competitive edge. Aerogels, nano-enhanced boards, bio-based foams, dynamic insulation with PCMs etc. provide superior thermal performance compared to conventional options. R&D into novel materials like graphene, VIP (vacuum insulated panels) is also underway. Customers get a broader range of high-tech, eco-friendly choices. Focus on product innovation is hence a major trend in the external wall insulation board industry.
• Focus on thermal comfort: Thermal comfort is becoming an important aspect of building design. Insulation boards not only reduce heat loss during winters but also provide cooling and moisture control benefits. This enhances occupants' comfort levels and productivity. With rising temperatures due to climate change, maintaining comfortable indoor conditions is crucial. Specifiers are thus selecting insulation boards based on their ability to deliver year-round thermal comfort. This key trend is expanding product adoption beyond just energy savings.
• Prefabrication techniques: Offsite prefabrication of building modules with integrated insulation is gaining momentum. It provides benefits like faster construction, lower costs, consistent quality, and reduced wastage. External wall insulation board installations are easier and more efficient with prefab components. This trend towards prefabricated buildings with ‘baked-in’ insulation is fostering market growth. It is especially prevalent in regions like the US and Scandinavia where prefab accounts for a major share of new construction.

External Wall Insulation Board Market Restraints 

• High product and installation costs: The high upfront cost of purchasing and installing external wall insulation boards deters many customers, especially in developing countries and cost-sensitive sectors like residential. Though insulation lowers long-term energy bills, the initial investment is very high. Additional expenses for specialized labor and equipment also add to the cost. This acts as a major barrier, limiting adoption despite the benefits. Manufacturers need to focus on reducing production expenses to make insulation boards more affordable.
• Low consumer awareness: Lack of awareness among homeowners and small building owners regarding the merits of external wall insulation and its long-term cost savings is a major restraint, especially in developing markets. Many customers view insulation as an unnecessary added expense rather than an investment. Effective educational marketing is essential to demonstrate the value proposition of insulation boards in reducing energy consumption and enhancing comfort. This can help broaden adoption beyond large industrial and commercial projects.
• Shortage of skilled labor: Installation of external wall insulation requires specialized skills like precision cutting, adhesive application, mechanical fastening, plastering/cladding etc. But the industry faces a severe shortage of such trained labor. This acts as a limitation since incorrectly installed insulation will not deliver the desired performance. Companies need to invest more in installer training programs and certification to expand the pool of skilled workers that can effectively implement external wall insulation projects.
• Low penetration in developing markets: While insulation board adoption is growing steadily in the developed world, developing economies still have very low usage. Lack of regulatory mandates, minimal public awareness, high product costs and absence of technical skills make penetration difficult. However, developing nations will account for a major share of global construction in the coming decades. Overcoming these barriers in emerging markets should be a priority to unlock the full potential of the external wall insulation board industry.

Recent Developments

New product launches

• In March 2022, Huntsman Corporation launched a new environmental product disclosure certified spray polyurethane foam insulation system to support sustainable building practices.
• In January 2021, BASF introduced the Neopor BMB insulation board solution made from Neopor F5300 Plus to deliver enhanced fire protection.
• In October 2020, Knauf Insulation launched ECOSE Technology in its Glass Mineral Wool insulation portfolio to reduce binder-related formaldehyde emissions.

Acquisition and partnerships

• In January 2022, Kingspan acquired Logstor to expand its insulation solutions portfolio.
• In August 2021, Rockwool partnered with Projektfabrik to drive the adoption of façade insulation solutions.
• In December 2020, BASF acquired a 25% stake in Econic Technologies focused on sustainable polyurethane systems.

Figure 2. Global External Wall Insulation Board Market Share (%), by End-Use Sector, 2023

Top companies in External Wall Insulation Board Market

• Saint-Gobain
• Kingspan
• Rockwool
• BASF
• Johns Manville
• Knauf Insulation
• Owens Corning
• Paroc
• Dow Building Solutions
• GAF Materials

*Definition: External wall insulation boards refer to sheets of thermally insulative materials that are affixed to the outer walls of buildings. They enhance wall thermal resistance and prevent heat loss, thereby improving energy efficiency of buildings. These prefabricated boards are made using materials like mineral wool, XPS, EPS, polyurethane foam, etc. External wall insulation lowers energy consumption for heating/cooling and reduces carbon emissions. It also provides added benefits such as weather protection, noise reduction, moisture control, and enhanced indoor comfort. The boards are commonly installed using bonding adhesives or mechanical fixings.

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