Crude Tall Oil Market Size and Trends

The Global Crude Tall Oil Market size is expected to reach US$ 3 Bn by 2031, from US$ 1.93 Bn in 2024, growing at a CAGR of 6.5% during the forecast period.

Global Crude Tall Oil Market Trends:

Rising preference for eco-friendly products: The rising preference for eco-friendly products among environmentally conscious consumers is significantly impacting the global crude tall oil market. There is increasing awareness about the detrimental effects of fossil fuel usage and consequent demand for sustainable alternatives. Crude tall oil, a sustainable by-product of the pulp and paper industry's kraft process, is witnessing more demand from the biofuel and bioproduct sectors due to its green credentials.

Many companies are investing in new technologies and processes to extract crude tall oil on a larger scale and convert it into biofuel as well as biodegradable and renewable materials. For example, major crude tall oil producers like Forchem Oyj of Finland and WestRock Company of United States have significantly ramped up crude tall oil extraction capacity from their pulp mills in recent years to cater to the growing requirement of crude tall oil from biofuel manufacturers and environmentally-conscious chemical businesses. They are also undertaking initiatives to optimize recovery of crude tall oil from black liquor and improve refining methods to increase the sustainability and efficiency of operations.

Shifting focus towards bio-based and sustainable products: The demand for bio-based and sustainable products has been steadily rising in recent years as consumers and businesses alike have become increasingly environmentally conscious. Crude tall oil, a bio-based industrial chemical co-product of the kraft pulping process used in papermaking, stands to benefit from this trend. Tall oil derivatives such as tall oil fatty acids, distilled tall oils, and tall oil rosins are enjoying growing popularity as drop-in replacements for petroleum-based products in applications like adhesives, lubricants, binders, and surfactants. Several major corporations have set ambitious sustainability targets focused on increasing their use of renewable and recycled content in products and packaging over the next five years. This direct corporate demand as well as pressure on suppliers to demonstrate improved sustainability credentials is expected to drive significant market expansion for crude tall oil and its refined output streams.

Government policies are also playing a role in bolstering the crude tall oil industry. For example, in 2021 the European Commission added tall oil and its derivatives to its revised renewable energy directive, recognizing their potential as low-carbon substitutes for fossil fuels. This regulatory support increases the incentive for European businesses to transition existing petroleum-based processes over to tall oil-derived versions. European biodiesel producers in particular are known to rely on tall oil fatty acid methyl esters as a component. In Canada, national and provincial-level clean fuel standards similarly encourage the use of bio-based additives and blendstocks in gasoline and diesel, again creating opportunities for crude tall oil suppliers.