Worldwide demand for fuel additives is expected to increase 4.7 percent per year to 26.5 billion kilograms in 2016, with demand in value terms advancing 8.0 percent per year to $59.4 billion over the same period. Oxygenates, which dominate the market, will continue to account for more than 94 percent of demand in volume terms through 2021. Growth in total fuel additive demand will be buoyed by very rapid increases in the consumption of petroleum fuels in China and other developing nations, and by changing technology and regulatory environments that result in higher additization rates.
Oxygenates such as methyl tertiary butyl ether (MTBE) and ethyl tertiary butyl ether (ETBE) dominate world fuel additive consumption, despite efforts over the 2001-2011 period by the United States, Canada, and other countries to eliminate their usage due to concerns about ground water contaminations and possible negative health impacts. Going forward, gains will be strong as developing economies add MTBE at higher rates to their gasoline blends, while European Union member countries turn to ETBE (which can be derived from bioethanol) as a means of increasing the renewable content of their gasoline fuels without affecting the existing fuel transport infrastructure.
In addition to strong growth in fuel consumption in China and other developing countries, higher additization rates will drive increases in specialty fuel additive demand. As the motor vehicle industry globalizes and developing economies modernize their motor vehicle fleets, more efficient and powerful engines will become more common, requiring the availability of higher-quality fuels. Governments will respond to changing technology and public pressure regarding pollution and fuel consumption by enacting stricter standards to guarantee fuel quality, reduce emissions, and reduce petroleum fuel consumption through expanded biofuel use.
The largest gains among specialty additives are expected to be in deposit control agents such as detergents. The most rapid gains, however, will be seen in cold flow improvers, promoted by increasing biodiesel blending and declining levels of sulfur in diesel fuels, as air pollution concerns lead to the phase-in of lower sulfur diesels in developing regions.
Other specialty additives will also be impacted by expanding biodiesel and ethanol consumption. Demand for antioxidants and corrosion inhibitors will particularly benefit, with antioxidants also receiving a boost from increased standards for fuel quality. Biodiesel will have a limiting effect on fuel additive demand, however, by restraining growth in cetane improvers and lubricity improvers.
Among the three major applications for fuel additives (gasoline, distillate fuels, and other refined petroleum products), gasoline is expected to be the fastestgrowing end use for fuel additives, with gains particularly buoyed by strong demand for oxygenates. Distillate fuels represent the largest end use for specialty additives, and demand for distillate additives has been especially impacted by a shift from gasoline to diesel vehicles in several regions, in addition to changing fuel blends with lower sulfur content and higher levels of biodiesel. Other petroleum fuels, such as jet fuel and marine fuel, require much lower volumes of additives, so this application is expected to remain the smallest.
This Freedonia industry study, “World Fuel Additives”, presents historical demand data (2001, 2006 and 2011) as well as forecasts for 2016 and 2021 by type for six regions and 19 countries. The study also assesses market environment factors, evaluates company market share, and profiles 45 global players.
©The Freedonia Group
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