Fuel Additives Market

[258 Pages Report] The fuel additives market is projected to reach USD 6.8 billion by 2025, at a CAGR of 3.2% from USD 5.8 billion in 2020. The growth of the automotive industry drives the demand for fuel additives. The production of passenger cars, light commercial vehicles, and heavy commercial vehicles have witnessed growth across the globe. The increase in automotive sales increases the demand for gasoline and diesel and, consequently, drive the demand for fuel additives. North America is the key market for fuel additives, globally, followed by APAC and Europe. The growing demand for ultra-low sulfur diesel is expected to provide opportunities for the market.

Impact of COVID-19 on fuel additives market.

As a result of the global pandemic due to COVID-19, the negative growth of the fuel additives market is expected for the year 2020. The US is the most affected country by the COVID-19, globally. Hence, due to the economic recession, slow growth in fuel additives consumption is expected during the forecast period. Due to the lockdown in major countries and temporary closure of operations, there is a huge barrier in the supply chain. The major oil & gas producers in the region are highly affected due to the closure  of oil refining activities.

Asian countries had taken preventive measures such as social distancing in early stage to avoid the spread of virus and have been potentially able to suppress the virus. As per the reports, the strongest reduction in vehicle traffic was seen from South Asia constituting countries like India, Bangladesh, Sri Lanka and Central Asian countries

Stringent governmental regulations

Governments all over the world are imposing stringent environmental regulations to address growing concerns about the harmful effects of greenhouse gas (GHG) emissions. Government agencies are focusing on the use of clean and efficient fuels The Environmental Protection Agency (EPA) in the US has regularly modified and enforced several norms for reducing vehicular emissions and improving the quality and efficiency of fuels used. The European Union (EU) has imposed stringent rules that are to be followed by every refiner and marketer of fuels. The directive on the Promotion of Clean and Energy Efficient Road Transport Vehicles (EU) strives to introduce environmentally-friendly vehicles and fuels. It is also concerned with the purchase of vehicles for public transport services. The UK government introduced a set of regulations in 2011, which look after the use of additives in fuel. The Government of India has imposed the Euro IV standards in 13 metro cities and Euro III standards for Tier-2 cities to control emissions.

Section 211 of the Clean Air Act of the US EPA states that refiners and importers must register their products with the EPA before they are offered for sale. Under this registration program, all manufacturers are required to analyze the combustion and evaporative emissions generated by their fuel and fuel additive products.

With environmental regulations increasingly becoming stringent, the necessity to reduce emissions is more. This can be achieved by adding more efficient and effective fuel additives. This is driving the fuel additives market.

Degrading quality of crude oil

The quality of crude oil has been degrading over the years. Most of the sweet oil has already been explored and is depleting fast. More investment is needed to exploit high-quality fuels that are very difficult to explore and produce. Moreover, crude oil is heavy and sour and is associated with difficulties in transportation and refining. Thus, the refined products that are obtained are expensive, driving up the cost of the final product.

The challenge for refiners is to develop economical technologies that will allow the production of clean and energy efficient fuels from heavy and unconventional resources while reducing refinery emissions. The technological challenge for both refiners and consumers is to use advanced science and technology to overcome this at the lowest possible cost.
The refineries process a variety of crude oil blends from different sources around the world. In order to handle heavy crudes, cold flow improvers are used to prevent heavy crudes from freezing. Corrosion inhibitors are used in acidic crudes to avoid corrosion, whereas, surfactants are added to prevent settling of impurities. All these factors require refiners to monitor manufacturing equipment closely and use additives to ensure smooth operation of a refinery.

Rise in demand for alternate fuels

Global climate change is a major concern associated with the use of petroleum products. Alternate fuel vehicles (AFVs) offer more tailpipe emission benefits. Compared to reformulated gasoline vehicle, the emissions are reduced by approximately 60%-90% in compressed natural gas (CNG) vehicle and liquefied petroleum gas (LPG) vehicle.

Using alternative fuels in place of petroleum products in light-duty vehicles reduces the amount of petroleum used for transportation. AFVs (alternate fuel vehicles) have been an attractive transportation option since the 1990s. Both the public and private sectors have invested a huge amount of capital in the development of AFVs. A few types of AFVs are already on the road in the US, and some demonstration plans for AFVs are in the pipeline. These vehicles offer a substitute for current gasoline vehicles and account for a considerable share of the overall automobile market. This is restraining the growth of the fuel additives market.

Increase in demand for ultra-low sulfur diesel (ULSD)

The increasing use of low sulfur content fuels will boost the growth of newer emissions control technologies like the addition of fuel additives. The use of fuel additives substantially lowers emissions of particulate matter from diesel engines. This was first introduced in the EU and later in North America.

Ultra-low-sulfur diesel (ULSD) containing 15 ppm of sulfur was introduced for highway diesel fuel in 2006 in the US. ULSD is also expected to be used in non-highway diesel fuel. When it is introduced in non-highway fuel, the demand for fuel additives is expected to increase across the globe. Diesel engines that are equipped with advanced emission control devices use the highway ULSD fuel, which helps decrease emissions.

Deposit control is expected to be the largest type of fuel additives during the forecast period.

On the basis of type, the fuel additives market has been segmented into deposit control, cetane improvers, lubricity improvers, octane improvers, stability improvers, cold flow improvers, corrosion inhibitors, dyes & markets, anti-icing, and others. The deposit control segment is estimated to register a moderate CAGR, in terms of value, of the overall fuel additives market. The growth of the deposit control segment is expected to continue during the forecast period due to the increasing demand from various applications.

Diesel is projected to be the largest application of fuel additives during the forecast period.

On the basis of application, the fuel additives market has been segmented into diesel, gasoline, aviation fuel, and others. The diesel segment is projected to dominate the fuel additives market during the forecast period. The dominance of the diesel segment can be attributed to the robust demand for diesel fuel additives in APAC, North America, and Europe. The demand for diesel fuel additives is expected to experience a significant rise because of their high consumption in APAC.

North America is expected to account for the largest share of the fuel additives market during the forecast period.

North America is estimated to be the largest market for fuel additives during the forecast period, in terms of value. The dominance of North America in the fuel additives market is mainly due to stringent environmental regulations. The North American market is highly regulated with the Environment Protection Agency (EPA) playing a key role in the monitoring and commercialization of fuel additives products.

Key Market Players

The key market players profiled in the report include Afton Chemical Corporation (US), Innospec Inc. (US), The Lubrizol Corporation (US), BASF SE (Germany), Infinieum Limited (UK), Evonik Industries AG (Germany), Chevron Oronite Company LLC (US), Lanxess (Germany), Dorf Ketal Chemicals (India), Cummins Inc. (US), and Cerion LLC (US).

Afton Chemical Corporation is one of the leading players in the fuel additives market. The company, through its wide range of product portfolio, is able to cater to the specific needs of customers. The company has made a large number of expansions, which have enabled it to strengthen its position in the fuel additives market. For instance, the company has completed the expansion of its chemical additive manufacturing facility in Jurong Island, Singapore. This helped the company strengthen its presence in the Asian market. Moreover, the company completed the acquisition of Mexico-based petroleum additives manufacturing, sales, and distribution company Aditivos Mexicanos, S.A. de C.V. (AMSA). This helped the company enhance its presence in the Mexican fuel additives market.

Innospec Inc. is another leading manufacturer of fuel additives. The company has adopted a new product launch as a part of its growth strategy. For instance, the company launched new gasoline additive technology for direct injection gasoline engines. This helped the company gain additional market share. The company has also launched a new range of marine fuel additives that comply with new regulations for the maximum sulfur content of marine fuels.

Scope Of The Report

This report categorizes the global fuel additives market based on type, application, and region.

On the basis of type, the fuel additives market has been segmented as follows:

• Deposit Control
• Cetane Improvers
• Lubricity Improvers
• Cold Flow Improvers
• Octane Improvers
• Corrosion Inhibitors
• Stability Improvers
• Dyes & Markers
• Anti-icing
• Others (Depressants and Conductivity Improvers)

On the basis of application, the fuel additives market has been segmented as follows:

• Diesel
• Gasoline
• Aviation Fuel
• Others (Marine Oil and Heating Oil)

On the basis of region, the fuel additives market has been segmented as follows:

• APAC
• North America
• Europe
• Middle East & Arica
• South America

Recent Developments

• In February 2019, Lanxess expanded its corrosion inhibition additives production capacity. This resulted in a 15% increase in global corrosion inhibition additives production capacity. This has helped the company meet the increasing global demand.
• In November 2018, BASF SE started methanol production using renewable raw materials. The product name is EU-REDcert-methanol. This product is used as a raw material for chemical conversion into other fuels or fuel additives.
• In September 2018, Afton Chemical Corporation completed the expansion of its chemical additive manufacturing facility in Jurong Island, Singapore. This has helped the company strengthen its presence in the Asian market.
• In September 2018, Dorf Ketal started a new plant for the manufacturing of its fuel additive, i.e., mph and milEx at Mundra facility in India. This has helped the company meet the increasing demand for multifunctional fuel additives.
• In July 2017, Afton Chemical Corporation completed the acquisition of Aditivos Mexicanos, S.A. de C.V. (AMSA), a petroleum additives manufacturing, sales, and distribution company in Mexico. This has helped the company enhance its presence in the Mexican fuel additives market.

Frequently asked questions

•  What are the major developments impacting the market?
•  Where will all the developments take the industry in the mid to long term?
• What are the upcoming types of fuel additives?
• What are the emerging applications of fuel additives?
• What are the major factors expected to impact market growth during the forecast period?
• What are the major factors expected to impact market growth during the forecast period?
• Can you provide the impact of COVID-19 on fuel additives market?

Frequently Asked Questions (FAQ):

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