The market is segmented by Product Type (Deposit Control, Cetane Improvers, Lubricity Additives, Antioxidants, Anti-corrosion, Cold Flow Improvers, Antiknock Agents, and Other Product Types), Application (Diesel, Gasoline, Jet Fuel, and Other Applications), and Geography (Asia-Pacific, North America, Europe, South America, and Middle-East and Africa).
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Scope of the Report
Key Market Trends
TABLE OF CONTENTS
Fastest Growing Market:
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The market for fuel additives is expected to register a CAGR of around 5.5%, during the forecast period. Owing to the enactment of stringent environmental regulations across the world, the formulations of different petroleum fuels are changing gradually. This factor has been driving the demand for fuel additives, in the recent scenario.
However, there is an increasing demand for battery electric vehicles (BEVs) in countries, such as the United States, China, and Germany. This, along with high R&D costs of fuel additives and the impact of the COVID-19 pandemic, may hamper the growth of the market studied during the forecast period.
Accelerating demand for ultra-low-sulfur diesel (ULSD) is likely to act as an opportunity for market growth, in the future.
North America dominated the fuel additives market, owing to the high demand from various applications.
Scope of the Report
The scope of the fuel additives market report includes:
Cold Flow Improvers
Other Product Types
Rest of Asia-Pacific
Rest of the Europe
Rest of South America
Middle-East and Africa
Rest of Middle-East and Africa
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Key Market Trends
Gasoline to Dominate the Market Studied
As with diesel, gasoline engine technologies and fuels are constantly evolving and providing new challenges. The growth in the consumption of gasoline additive largely reflects the requirements of engine design and developments in refinery operations. The additive cost is less than 0.3% of the average retail gasoline price.
The fuel additives, which have found application in gasoline engines, are either used in the refinery fuel distribution system or in the vehicle system:
Additives for Gasoline Distribution Systems: Antioxidants, metal deactivators, antistatic agents, corrosion inhibitors, sediment reduction agents, dyes, and dehazers.
Additives for Gasoline Vehicle System: Antiknock additive (was tetra-ethyl lead, which is now phased out), anti-valve seat recession additive (also phased out, due to metallurgy change in the engines), carburetor detergents (phased out, due to the introduction of injectors), deposit control additives, deposit modifiers, friction modifiers, and lubricity improvers.
Port injection fuel delivery systems used to be the norm. However, new gasoline direct injection or GDI technology is becoming standard equipment in many new cars, especially in high-performance vehicles. In this innovative fuel delivery system, the injector is placed inside the combustion chamber, yielding improved combustion to produce better performance, improved gas mileage, and fewer emissions. Deposits in GDI systems are extremely hard to remove and require more fuel additives.
Fuel additives, such as isooctane, have so far been produced from mineral oil. However, a French-German company, Global Bioenergies, started producing bio-based additives for gasoline. The raw material used for bio-based fuel additives is bio-based isobutene, a hydrocarbon, from which plastics and elastomers can also be synthesized.
In order to prevent air-fuel mixture in the gasoline engine from self-igniting prematurely, additives are included with fuel to increase the knock resistance. In a project funded by the German Federal Ministry of Education and Research (BMBF), the French-German company, Global Bioenergies, aimed to produce two such additives, namely, isooctane and ETBE (ethyl-tert-butyl ether), for the first time from purely renewable resources. Hence, such developments are highly likely to create new opportunities for the gasoline fuel additives market.
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North America to Dominate the Market
The United States is the world’s largest and most powerful economy, and it had a per capita income of USD 59,610 in 2018. Furthermore, in 2019, the economy grew by an annualized 1.9% in the third quarter of 2019. There were signs that the economy maintained a moderate pace of expansion as the year ended, supported by a strong labor market. The economy grew at a 2.0% pace during the April-June 2019 period. The drastic outbreak of COVID-19 in the country has led to a downfall in the economic growth, owing to a fall in consumer spending and business shutdowns.
In 2019, distillate fuel (essentially diesel fuel) consumption by the United States transportation sector was about 1.1 billion barrels. This amount accounted for 15% of total petroleum consumption in the country and, on an energy content basis, for about 23% of total energy consumption by the transportation sector.
Diesel fuel powers most of the farm and construction equipment in the country. The military uses diesel fuel in tanks and trucks because diesel fuel is less flammable and less explosive than other fuels. Diesel fuel is also used in diesel engine generators to generate electricity, as most of the remote villages in Alaska use diesel generators as the primary source of electricity.
The diesel fuel slate has changed significantly in the last decade. Most of the diesel fuel in the United States is manufactured and delivered to the market with typical CN of between 43 and 46.
More than 40 diesel models are available today in the United States from 10 manufacturers and brands.
According to the U.S. Energy Information Administration (EIA), In 2019, about 3.39 billion barrels of finished motor gasoline was consumed in the country, an average of about 9.27 million barrels per day.
Most of the gasoline sold in the United States contains some ethanol and are segmented into three general categories of ethanol-gasoline blends i.e., E10, E15, and E85 (E10 and E15 are the most common).
The United States is the second-largest market for vehicle sales and production globally. In 2019, the automotive sales witnessed contraction of about 1.8%. However, the automakers have been trying to revive automotive industry through removing their previous automotive models from the domestic market. Moreover, the COVID-19 outbreak has also impacted the automotive industry.
The market for automobiles has been struggling in 2020 due to the rapid rise in the number of new cases across the country. In June 2020, 1.14 million units were estimated to be sold witnessing a decline by 25% ending the half year with a decline of 23.1%. This, in turn, is expected to reduce the growth in the demand for fuel in the coming years as the number of new vehicles operating sees a slow growth.
Additionally, the government is actively involved in promoting the usage of electric vehicles through programs and initiatives. This, has significantly boosted the usage of electric vehicles, and affected the consumption of fuel.
The credit for plug-in electric vehicles is a federal tax incentive for electric vehicles, where the credit ranges from USD 2,500 to USD 7,500 per vehicle, depending on the vehicle’s battery capacity. This type of credit is available after the sale of 200,000 qualifying vehicles in United States.
According to EV-volumes, around 236,700 plug-in vehicles were delivered in the first 3 quarters of 2019 witnessing a rise by 2 % compared to the same period in 2018.
The United States has the largest aerospace industry in the world. According to the Federal Aviation Administration (FAA), the total active general aviation fleet is expected to increase from 212,875 in 2018 to 211,575 aircraft by 2039, owing to the growth in air cargo. Also, the for-hire air carriers are expected to reach 7,550 in 2020 from 7,475 units in 2018. This is likely to increase the usage of jet fuel in the country.
All these mentioned factors, in turn, have an impact on the consumption of fuel additives during the forecast period.
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The global fuel additives market is fragmented in nature, with the top five players accounting for around 30% of the market share. Afton Chemical is the market leader, with an extensive product portfolio of fuel additives, such as gasoline fuel additive packages and diesel fuel additive packages. It is followed by The Lubrizol Corporation, Innospec Inc., Chevron Corporation, and BASF SE, in terms of the market share.