Global Fatty Acid Methyl Esters Market - 2022-2029

Market Overview

The global fatty acid methyl esters market size was worth US$ XX million in 2021 and is estimated to reach US$ XX million by 2029, growing at a CAGR of XX% during the forecast period (2021-2029).

Fatty acid methyl esters are a type of fatty acid ester derived by the transesterification of fats with methanol. The molecules in biodiesel are primarily fatty acid methyl esters, usually obtained by the transesterification of vegetable oils. The chemicals are used to produce detergents and biodiesel.

Fatty acid methyl esters are mainly produced by an alkali-catalyzed reaction between fats and methanol in a strong base like sodium hydroxide, sodium methoxide or potassium hydroxide. One of the reasons for using fatty acid methyl esters in biodiesel instead of free fatty acids is to nullify any corrosion to the metals of engines, production facilities and so forth. Unlike their esters, fatty acids are only mildly acidic but can cause corrosion problems over time.

Market Dynamics

The demand for fatty acid methyl esters is mainly driven by the increasing shift away from fossil fuel use. The difficulty of mass production is the key challenge to the growth of this market.

Increasing shift away from fossil fuel use

Global warming, adverse climate events and man-made climate change have prompted a greater debate about fossil fuels like oil, natural gas, and coal. The world is rapidly moving towards a carbon-neutral future by the middle of the century and thus, various alternatives for fossil fuel products are being explored.

Fatty acid methyl esters are derived from natural and renewable sources such as corn, biomass, algae and sugarcane. The chemicals are mostly non-polluting and lower carbon footprint than traditional fossil fuel-developed chemicals. While electric vehicles are being touted as replacements for petroleum-based vehicles, their mass adoption is still decades away. Meanwhile, ethanol and methanol can take advantage of the pre-existing infrastructure and act as a stop-gap measure. Increasing health concerns about the long-term use of petrochemicals in various products prompt their replacement with fatty acid methyl esters.

Therefore, the increasing shift away from fossil fuels can surge demand for fatty acid methyl esters as suitable alternatives in various end-use industries such as automotive, food processing and medicine. It remains a key driver for the long-term growth of the global fatty acid methyl esters market.

The difficulty of mass production

Fatty acid methyl esters are widespread due to their natural sources and low carbon footprint. Many industries increasingly adopt chemicals as substitutes for traditional fossil-fuel-based chemicals. However, the growing popularity of fatty acid methyl esters has given several challenges.

The chemicals are mainly sourced from crops such as corn, sugarcane and other natural sources such as algae and biomass. The production of the chemicals is largely dependent on good crop harvests. Diseases, droughts and adverse weather events may lead to crop failure or decreased output, reducing chemical production. Ethanol, the leading renewable chemical, is mainly produced from sugarcane. Sugarcane is a water-guzzling crop and large-scale cultivation leads to severe water table depletion. Many countries such as India routinely face water shortages and droughts due to large-scale sugarcane cultivation.

Due to sustainability issues, the mass production of fatty acid methyl esters is impossible. Low production and unstable supply lead to massive price fluctuations, which hamper the wider adoption of chemicals in various end-use applications. The difficulty of mass production is a key challenge for the global fatty acid methyl esters market.

COVID-19 impact analysis

The global COVID-19 pandemic had an uneven impact on the global fatty acid methyl esters market. Manufacturing and industrial applications saw relatively steep declines as demand from their end-use industries collapsed due to lockdowns imposed by governments. The COVID-19 pandemic has caused major supply chain disruptions.

The supply chain disruptions have hampered raw material supplies, leaving the industry with a woeful production shortage. The shortfall in production has caused a rise in the prices of finished products, thus contributing to global inflation. The pandemic will not majorly impact the medium and long-term growth prospects of the global fatty acid methyl esters market. With pandemic cases receding and economic activity picking up, it is expected that supply chain constraints will be removed and production will increase to pre-pandemic levels. The demand for fatty acid methyl esters remains strong and is expected to grow gradually in the coming years.

Segment Analysis

The global fatty acid methyl esters market is segmented into type, feedstock, application and region. The fatty acid methyl esters market is segmented into fuel, lubricants, coatings, metalworking fluids, food and agriculture, etc. Fuel is leading in this segment. Fatty acid methyl esters are mainly used in biofuels such as methanol and ethanol. Vehicles use ethanol as a biofuel blended with petrol for flex-fuel engines.

Geographical Analysis

North America is leading in the global fatty acid methyl esters market. The region has the largest market share globally, primarily due to major government incentives given for the production of cash crops. Some of the largest fatty acid methyl esters producers and consumers are located in this region.

U.S. is a leading producer of cash crops like corn and sugarcane. Due to long-term government subsidies and production-linked incentives, both cash crops are produced in surplus. The excessive surplus is turned over to chemical companies to produce bioethanol and fatty acid methyl esters. North America will retain the largest market share in the fatty acid methyl esters market in the coming years.

Competitive Landscape

The global fatty acid methyl esters market is competitive due to the availability of chemicals from different manufacturers for various end-use applications. Some of the major market players contributing to the growth in the segment are BASF SE, Evonik Industries AG, Solvay, Dow, Mitsubishi Chemical Corporation, Cargill, Incorporated, Amyris Inc., Koninklijke DSM N.V., Genomatica Inc. and ADM. The major players in the global fatty acid methyl esters market adopt several growth strategies such as new product launches, improving the formulation of existing products, capacity expansion, joint ventures and collaborations, contributing to growth of the industry.

BASF SE

Overview: BASF SE is a multinational chemicals company that is among the largest chemical producers in the world. It produces various chemicals, including pesticides, plastics, industrial solvents, catalysts and coatings. Through subsidiaries and joint ventures, the company operates 390 production sites in more than 80 countries. BASF SE was founded in 1865 and is headquartered in Ludwigshafen, Germany.

Product Portfolio: Luprosil is an organic acid designed to prevent mold formation in animal feed.

Key Developments: In 2021, BASF SE became one of the first companies certified to REDcert standards for their biochemical products.

Why Purchase the Report?

Visualize the composition of the fatty acid methyl esters market segmentation by type, feedstock, application and region, highlighting the critical commercial assets and players.

Identify commercial opportunities in the fatty acid methyl esters market by analyzing trends and co-development deals.

Excel data sheet with thousands of global fatty acid methyl esters market-level 4/5 segmentation data points.

PDF report with the most relevant analysis cogently put together after exhaustive qualitative interviews and in-depth market study.

Type mapping in excel for the critical product of all major market players

The global fatty acid methyl esters market report would provide access to an approx.: 57 market data tables, 66 figures and 230 pages.

Target Audience 2022

Plastics and petrochemical manufacturers

Fatty acid methyl esters manufacturers

Application Investors/Investment Bankers

Education & Research Institutes

Research Professionals