Acid Methyl Esters Market is Estimated to Witness Considerable Growth Owing to the Increasing Biofuel Demand and Strong Functional Attributes
The fatty acid methyl esters market is estimated to be valued at USD 22.95 Bn in 2024, exhibiting a CAGR of 5% over the forecast period (2024-2031). The market is driven by the growing demand for biofuels in the transportation sector as well as government subsidies and mandates promoting their adoption. Furthermore, fatty acid methyl esters' appealing attributes such as good cold properties, low toxicity, and compatibility with petroleum-based fuel systems have augmented their usage in various industries.
Market Dynamics:
Rising demand for biofuels is a major factor propelling the growth of the fatty acid methyl esters market. Fatty acid methyl esters have become an integral component in biodiesel due to their energy content and environment-friendly profile. Growing focus of governments worldwide on replacing fossil fuels with sustainable biofuels to reduce vehicular emissions is driving their production. According to the European Biodiesel Board, biodiesel accounts for over 80% share in the biofuels market and fatty acid methyl esters are a core component.
Strong functional characteristics of fatty acid methyl esters also contribute significantly to their increasing consumption. They have superior lubricity as compared to petroleum-based diesel, protecting fuel pumps and injectors from wear.
Market Drivers
Increased Demand for Biofuels
Fatty acid methyl esters are widely used as biofuels and their production has been increasing significantly with the growing demand for renewable and alternative fuels. FAMEs can replace petroleum-derived diesel fuels and help reduce carbon emissions. Many governments across the world offer incentives and subsidies to boost biofuel production and usage which is driving more production of fatty acid methyl esters.
Growing Edible Oil Consumption
With rising incomes and growing populations, the consumption of edible oils is increasing rapidly worldwide. During the oil refining process, fatty acid methyl esters is produced as a byproduct. As edible oil refining volumes grow to meet higher demand, more FAME also becomes available, pushing up supplies and driving its market growth. Many refineries have also enhanced FAME yields from existing operations, adding to the growth in available volumes.
Market Restraints
Availability of Cheaper Vegetable Oil Alternatives
FAME competes with other cheaper vegetable oil alternatives that can substitute for petrodiesel. They include plant-derived straight vegetable oils like soybean oil, palm oil or coconut oil which require less processing compared to FAME. This price advantage of straight oils acts as a restraint on the faster growth of the fatty acid methyl esters market.
Stricter Emission Regulations
Many countries and regions like the European Union have been placing increasingly strict regulations on vehicle emissions. While FAME helps reduce carbon footprint compared to fossil fuels, certain impurities in unrefined FAME can generate higher particulate emissions. Upgrading refining and meeting tougher emission norms increases costs, posing a challenge for wider FAME adoption.
Market Opportunities
Incremental Non-Fuel Applications
With ongoing research and development, new incremental applications for FAME are emerging beyond fuel uses. These include its increasing utilization as a green solvent in chemical processes and industrial applications. Demand from such alternative sectors provides new avenues for market expansion.
Link - https://www.coherentmarketinsights.com/market-insight/fatty-acid-methyl-esters-market-5008
Key Developments:
- In 2020, Dow, a global chemical business based in the U.S., had USD 7.95 billion in sales in its Performance Materials and Coatings sector
- In July 2020, ABITEC Corporation, a subsidiary of ABF Ingredients, announced that it has acquired Larodan AB, a manufacturer and international marketer of high-purity research grade lipids. ABF Ingredients are essential components in a wide range of products that are equally likely to be found in the pantry, the medicine cupboard.
Key Player:
Acme Synthetic Chemicals, ADM (Archer Daniels Midland Company), Cargill, Incorporated, Chemrez Technologies, Inc., CREMER OLEO GmbH & Co. KG, Elevance Renewable Sciences, Inc., Emery Oleochemicals, Godrej Industries Limited, JNJ Oil Industries, Inc., KLK OLEO, Krishi Oil Limited, Mohini Organics Pvt. Ltd., P&G Chemicals, Renewable Energy Group, Inc., Stepan Company, Univar Solutions Inc., Vertec BioSolvents Inc., Victorian Chemical Company Pty Ltd., and Wilmar International Ltd.
