DE-AROMATIC SOLVENTS MARKET ANALYSIS
The global de-aromatic solvents market is estimated to be valued at USD 2.34 Bn in 2024 and is expected to reach USD 3.64 Bn by 2031, exhibiting a compound annual growth rate (CAGR) of 6.5% from 2024 to 2031.
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There is an increasing demand for de-aromatic solvents from industries such as paints & coatings, adhesives, aerosols, and cleaning agents. The growing construction and automotive industries are expected to drive the consumption of paints & coatings, which, in turn, will boost the demand for de-aromatic solvents. For instance, according to data from trade government sources, the U.S. boasts one of the largest automotive markets globally. In 2020, U.S. light vehicle sales reached 14.5 million units, solidifying the country’s position as the world's second-largest market for vehicle sales and production. In addition, stringent environment norms regarding the emission of volatile organic compounds are also prompting industries to opt for bio-based and eco-friendly de-aromatic solvents, thus providing opportunities for growth in the market. However, availability of substitutes may hinder the market growth to some extent during the forecast period.
Market Driver - Increasing demand for low-odor and low-VOC (volatile organic compounds) solvents
The demand for solvents that produce minimal or no odor and emit lower levels of volatile organic compounds (VOCs) into the air is growing substantially across various end-use industries. De-aromatic solvents have been increasingly adopting as an effective alternative to conventional aromatic solvents owing to their low-odor and low-VOC profile. Many industries such as paints & coatings, cleaning products, adhesives, aerosols, and others are witnessing a noticeable shift toward using de-aromatic solvents to comply with stringent regulations regarding VOC emissions. These regulations are being enforced to control air pollution and reduce the health hazards associated with inhaling VOC vapors.
The paints & coatings industry has especially raised the consumption of de-aromatic solvents as they have become a preferred choice for formulating various paint types. Water-based and powder coatings are gaining wide acceptance but solvent-borne coatings continue to have considerable demand in certain applications that require high performance. In such scenarios, de-aromatic solvents are helping manufacturers to develop low-VOC and sustainable products without compromising on the quality and efficacy of coatings. Similarly, the cleaning products industry is switching to de-aromatic solvents in household cleaners, hand cleaners, hard surface cleaners, and other cleaning liquids and wipes to lower the impact on indoor air quality. Even pharmaceutical and cosmetic industries have triggered the need for de-aromatic solvents by showing preference for odorless and less toxic excipients and diluents in their products.
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Growing regulations on aromatic solvents due to health and environmental concerns
Regulatory authorities across different parts of the world have been imposing stringent restrictions on the application of several aromatic solvents owing to increasing health, safety, and environmental risks associated with these chemicals. Prolonged or repeated exposure to aromatic compound vapors can cause various acute and long-term effects on human health. Short-term impacts may include headaches, dizziness, confusion, while long-term effects involve damage to liver, kidneys, and nervous system. Moreover, aromatic solvents are hazardous air pollutants and many can contaminate water sources. Their improper handling and disposal may also lead to soil contamination over time.
Due to such significant health and environmental concerns, regulatory agencies are constantly efforts to curb the use of hazardous aromatic chemicals. Notable among these are restrictions enforced by the European Union's Registration, Evaluation, Authorization and Restriction of Chemicals (REACH) regulation and California Air Resource Board (CARB) in the U.S. Both agencies have added several aromatic solvents to their lists of chemicals that require limiting or replacing entirely. Their recent guidelines especially emphasize replacing carcinogenic, mutagenic, and reprotoxic solvents. Similarly, China and other major developing economies are also tightening norms pertaining to VOC emissions from solvent-based products.
The weightage of health risks over other performance factors is necessitating companies to substitute aromatic solvents proactively before regulatory bans. Hence, strict legislation controls the choice of solvents, favoring alternatives like de-aromatic hydrocarbons. This growing regulatory pressure is a chief factor driving the demand for specialized non-aromatic solvents across major end-use sectors on a global scale.
Key Takeaways from Analyst:
The main driver for this will be increasing demand from paints and coatings applications as well as industrial and household cleaning products. De-aromatics provide superior solvency properties compared to conventional solvents while meeting stringent environmental regulations.
North America currently dominates the market and is expected to maintain its leading position due to established end-use industries and stricter regulations discouraging use of aromatic compounds. However, the Asia Pacific region is likely to see the fastest gains. This is because the paints and coatings industries are growing rapidly in developing countries such as China and India due to industrialization and infrastructure development.
At the same time, regulations are also becoming more stringent in Asia to curb emissions. As local manufacturers switch to environment-friendly solvents, demand from the region is set to surge. Other growth pockets include Latin America and Middle East where economic growth is spurring new construction and manufacturing activity.
While certain factors such as availability of alternative green solvents pose a challenge, opportunities lie in expanding use of de-aromatics in industrial cleaning formulations. Major players such as ExxonMobil Chemical Company, Shell Chemicals and other are investing in R&D to design products targeting this application segment.
Market Challenge - High production costs compared to conventional solvents
The global de-aromatic solvents market is facing significant challenges due to high production costs compared to conventional aromatic solvents. De-aromatic solvents require complex production processes involving costly hydrogenation and extraction techniques to remove aromatic compounds from the chemical structure. This makes de-aromatic solvents considerably more expensive than traditionally used aromatic derivatives. Given tight margins across end-use industries, the higher costs of de-aromatic solvents act as a deterrent for many potential customers. Manufacturers struggle to justify the added costs, forcing suppliers to charge competitive prices. While offering reduced health and environmental risks, the premium pricing of de-aromatic varieties restrict their overall demand against cheaper alternatives. Unless production techniques are optimized to improve economies of scale and costs start nearing parity with aromatic types, this cost disadvantage will continue posing a major hurdle to the market's growth potential in the foreseeable future.
Market Opportunity - Expansion of applications in the automotive and aerospace industries
The global de-aromatic solvents market is poised to gain significant opportunities arising from the expansion of applications in the automotive and aerospace industries. Regulatory pushes towards reducing hydrocarbon emissions and minimizing health hazards are driving these sectors to increasingly adopt de-aromatic solvents in place of traditional aromatic compounds. In the automotive space, de-aromatic solvents find rising usage in paints, coatings, adhesives, and cleaners used across vehicle manufacturing. Similarly, stringent airworthiness norms forcing the aerospace industry to comply with stringent VOC content standards help augment the replacement of aromatics with de-aromatic variants in specialized coatings, adhesive, hydraulic fluids and solvents. Leading automakers and aircraft OEMs aligning procurement policies with such regulatory shifts is opening new growth avenues for de-aromatic solvent suppliers. With both industries projected to grow steadily in the coming years, favorable demand outlook exists for further market penetration of de-aromatic solvents.
Insights by type: Aliphatic Solvents Dominate Due to Versatility and Performance
In terms of type, the aliphatic solvents segment is expected to contribute 38.8% share of the global de-aromatic solvents market in 2024. This can be attributed to the versatile nature and excellent performance properties of aliphatic solvents.
Aliphatic solvents are highly preferred due to their low toxicity and environmental friendliness. Being hydrocarbon-based, these solvents are readily biodegradable and do not pose significant hazards to the environment. Their low aromatic content ensures minimal health risks to applicators as well. This eco-friendly profile has pushed their adoption in numerous green applications.
The widespread use in paints and coatings is a major factor behind aliphatic solvents' dominance. These solvents impart excellent solvency and promote smooth application of various paint formulations. They help customize viscosity and ensure long-term stability of formulations. Compared to other alternatives, aliphatic solvents yield superior finishing, gloss retention and corrosion resistance in paints.
Aliphatic solvents also find strong demand from the cleaning agent’s segment. Their fast evaporation, good degreasing ability and non-residue formation make them suitable for various household and industrial cleaning applications. They can effectively remove grease, oil and other stubborn contaminants from a range of surfaces without damaging materials.
Versatility is another strong suit of aliphatic solvents. With modifications in hydrocarbon composition, these solvents can be tailored to suit diverse solubility and evaporation requirements. They offer compatibility with a broad range of resins and polymers. The wide compatibility profile and performance advantages have positioned aliphatic solvents as the top choice across multiple end-use industries.
Insights by application: Growing Consumption in paints and coatings segment
In terms of application, the paints and coatings segment are expected to contribute 43.3% share demand for de-aromatic solvents in 2024. This is due to solvents playing a vital role in paint formulations and finishing requirements.
De-aromatic solvents are extensively used as thinning and diluting agents in paints. They help achieve the desired viscosity for spraying, brushing and other application methods. The solvents also facilitate smooth leveling of paint layers and promote fast drying on substrates. This translates to better finishing and appearance of painted surfaces.
De-aromatic’s solvency solvents to dissolve and hold together different resins, pigments and additives within paint formulations. This delivers homogenous, stable and long-lasting coatings. Dependable solvents are crucial in this regard to ensure paints maintain formulated properties over long shelf and usage lives.
Wide evaporative capacity of these solvents aids quick drying of wet paint films. These shrinks curing times and improves productivity for industries and end users alike. Fast drying is a valued property for various industrial and Do-It-Yourself painting applications.
Growth in the infrastructure, automotive, protective and marine coatings industries internationally will further drive demand from the paints segment. The need to protect a variety of substrates from environmental degradation makes solvent-based coatings indispensable. This steadily props up requirements for high performing de-aromatic solvents within the coating’s domain.
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North America has established itself as the dominant region in the global de-aromatic solvents market over the past decade. The region is expected to hold 39.4% of the market share in 2024. This can primarily be attributed to the large industrial and manufacturing base within the region focusing on sectors such as construction, automotive, and aerospace where de-aromatic solvents are widely used. In particular, the U.S. is home to some of the largest paints & coatings producers such as PPG Industries and others, who are major consumers of de-aromatic solvents. In addition, the well-established oil & gas industry provides abundant feedstock availability and has aided regional producers in achieving economies of scale.
However, it is the Asia Pacific region which is emerging as the fastest growing market for de-aromatic solvents globally. Countries such as China, India, and Indonesia are witnessing massive growth in end-use industries for de-aromatic solvents such as construction activity fueled by rapid urbanization. For instance, according to data by Invest India released in 2022, the construction industry in India is expected to reach US$ 1.4 Tn by 2025. This has propelled the demand for paints, coatings, sealants, and adhesives. The growing middle-class population with higher disposable incomes is also driving demand for consumer goods where de-aromatic solvents have applications. Further, government policies supporting local manufacturing is encouraging more regional producers to enter this market. This is enabling greater availability and accessibility of products at competitive prices.
On the other hand, major exporters of de-aromatic solvents such as countries in the Middle East benefit from access to raw materials giving them a competitive edge in international markets. However, certain environmental regulations regarding VOCs in that region may pose challenges to growth. Overall, buoyed by the industrialization across developing nations, the Asia Pacific region stands to gain the most in terms of demand growth for de-aromatic solvents despite North America holding the largest share currently.
De-Aromatic Solvents Market Report Coverage
| Report Coverage | Details | ||
|---|---|---|---|
| Base Year: | 2023 | Market Size in 2024: | US$ 2.34 Bn |
| Historical Data for: | 2019 To 2023 | Forecast Period: | 2024 To 2031 |
| Forecast Period 2024 to 2031 CAGR: | 6.5% | 2031 Value Projection: | US$ 3.64 Bn |
| Geographies covered: |
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| Segments covered: |
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| Companies covered: |
ExxonMobil Chemical Company, Shell Chemicals, TotalEnergies, SABIC, Chevron Phillips Chemical Company, Huntsman Corporation, LyondellBasell Industries, INEOS Group, Evonik Industries, Eastman Chemical Company, BASF SE, Repsol, Mitsubishi Chemical Holdings, Delek US Holdings, Clariant AG, Solvay S.A., Fuchs Petrolub SE, Oxea GmbH, Cepsa, and Kraton Corporation |
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| Growth Drivers: |
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| Restraints & Challenges: |
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*Definition: The global de-aromatic solvents market covers products designed to remove aromatic hydrocarbons from oils and fuels. These colorless, volatile solvents are utilized as cleaning agents and specialty solvents across industries such as automotive, oil and gas extraction, and consumer products. Key products within this market include naphtha, benzene-free toluene, alkylbenzene, and reformate. They offer advantages over petroleum-based alternatives with their lower toxicity profiles, making them preferred choices for industrial cleaning.
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About Author
Yash Doshi is a Senior Management Consultant. He has 12+ years of experience in conducting research and handling consulting projects across verticals in APAC, EMEA, and the Americas.
He brings strong acumen in helping chemical companies navigate complex challenges and identify growth opportunities. He has deep expertise across the chemicals value chain, including commodity, specialty and fine chemicals, plastics and polymers, and petrochemicals. Yash is a sought-after speaker at industry conferences and contributes to various publications on topics related commodity, specialty and fine chemicals, plastics and polymers, and petrochemicals.
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