Vapor recovery units Market is Estimated to Witness Robust Growth Owing to Stringent Regulations and Growing Environmental Concerns
The vapor recovery units market is estimated to be valued at USD 505.3 Mn in 2024, exhibiting a CAGR of 2.8% over the forecast period (2024-2031). Furthermore, the market is driven by stringent government regulations regarding VOC emissions.
Market Dynamics:
Stringent government regulations regarding VOC emissions and growing environmental concerns across the globe are the major drivers propelling the vapor recovery units market growth. Regulatory bodies such as the US EPA and the European Commission have implemented stringent regulations to curb VOC emissions from oil & gas and petrochemical facilities. For instance, the US EPA issued the Renewable Fuel Standard Program (RFS) in 2005 which mandates the blending of renewable fuels such as ethanol, biodiesel, and renewable diesel into fuel in order to reduce greenhouse gas emissions. Similarly, the European Commission released the Industrial Emissions Directive that aims to reduce industrial emissions across Europe, thereby driving the demand for vapor recovery units. Additionally, increasing awareness about carbon footprint management and sustainable development among consumers and industries is also augmenting the growth of the market. However, high installation and maintenance cost of vapor recovery units may hamper the market growth over the forecast period.
Major Environmental Regulations Promoting Vapor Recovery
One of the key drivers for the vapor recovery units market has been the stringent environmental regulations implemented across various countries and regions to limit vehicle and industrial emissions. Regulations, such as MARPOL Annex VI and EU Stage II, have mandated the installation of vapor recovery units systems at marine ports and gas stations respectively to capture hydrocarbon vapors during fuel handling operations. Compliance with such regulations is important to reduce air pollution and mitigate the health impact of volatile organic compounds (VOCs). The regulations have prompted the widespread adoption of VRUs among oil & gas terminals, refineries, and other petroleum product handling facilities.
Growing Demand from the Petroleum and Chemical Industries
Another major factor propelling vapor recovery units market growth is the rising demand from the petroleum and chemical industries that deal with large volumes of volatile liquids and gases on a daily basis. VRU systems play a critical role in capturing vapors emitted during petroleum transport, storage, and dispensing activities at oil terminals, refineries, gas stations, etc. They help recover vaporized hydrocarbon liquids back to the storage tanks, improving production efficiency. The expanding petrochemical industry in Asia Pacific and Middle East is driving the increased procurement of VRU equipment to meet stringent safety and environmental standards.
High Capital Investment Requirements
One of the key challenges restraining the vapor recovery units market is the high initial capital expenditure required for procuring and installing VRU systems. Complex VRU designs incorporating vapor blowers, condensers, recovery units, and control panels result in substantial project costs. High costs deter some small to medium scale end-use industries from adopting VRUs for vapor control. Additionally, integrating VRUs with existing infrastructure also demands significant retrofitting investments. The capital-intensive nature makes VRU adoption difficult for businesses with limited budgets.
Require Specialized Technical Expertise for Operation and Maintenance
Another restraint is the need for technical expertise to operate and maintain VRU systems properly. Complex mechanical and electronic components paired with multi-stage vapor recovery processes require skilled workforce for commissioning, calibration and repairs. Lack of in-house resources and technical know-how poses maintenance challenges. Moreover, specialized training programs and certifications are needed to develop VRU expertise locally. This technical barrier restricts the vapor recovery units market reach to some extent.
Rise of Distributed Petroleum Infrastructure
One opportunity area is the distributed petroleum supply infrastructure that is gaining prominence. Factors like urbanization, increasing fuel demand from rural sectors, and expansion of convenience stores are prompting companies to distribute their supply chains. This decentralized model relies more on dispersed fuel terminals, micro bulk plants, kiosks, and mobile fueling facilities located closer to demand centers. VRU deployment at such distributed infrastructure ensures regulatory compliance and capture of vapors at source during small-scale fuel handling.
Focus on Vapor Recovery from Storage Tanks
Another key opportunity lies in vapor recovery solutions targeted at petroleum product storage tanks which are major emission sources. Innovations in fixed roof tank VRU systems, internal/external floating roof VRUs, and pressure/vacuum VRUs can help boost capture rates. Technologies ensuring continuous vapor monitoring and recovery from diverse tank designs will be crucial as operators look for optimized systems. This presents major prospective applications for VRU vendors to develop specialized, efficient vapor control equipment tailored for tank vaporization management.
Link: https://www.coherentmarketinsights.com/market-insight/vapor-recovery-units-market-3420
Key Developments
- In March 2021, SCS Technologies introduced a new line of vapor recovery units following a recent acquisition.
- In 2020, Cimarron announced the acquisition of Aereon, a leading provider of vapor recovery and emission control solutions for the oil and gas industry.
- In July 2019, Cimarron Energy Inc. acquired Hy-Bon/EDI, a leading provider of vapor recovery and emission management solutions for the oil and gas industry. This strategic acquisition expanded Cimarron's capabilities in the critical areas of vapor recovery and emission management, further solidifying its position as a comprehensive energy equipment and services provider.
Key players
Alma Group, BORSIG GmbH, Cimarron Energy, Dover, Flogistix LP, Gardner Denver, Hy-Bon/EDI, John Zink Company, Kappa GI, Kilburn Engineering Ltd, Petrogas Systems, Symex Technologies, Voczero Ltd., Whirlwind Methane Recovery Systems LLC, Zeeco Inc, S&S Technical, KAPPA GI, Reynold India Private Limited., Ishan Equipments Pvt. Ltd., and TECAM Group
