Market Trends of Fatty Acid Methyl Ester Industry
This section covers the major market trends shaping the Fatty Acid Methyl Ester Market according to our research experts:
The Fuel Sector is Expected to Dominate the Market
- The fuel segment stands to be the dominating segment owing to evolving regulations aimed at protecting the ozone layer and reducing global warming.
- Growing dependence on fossil fuels and depleting fossil fuel reserves have led countries to look for alternative sources of fuel. Accordingly, this is expected to drive the growth of the methyl ester fatty acid market, as methyl ester fatty acid is a major raw material used in biodiesel production.
- Biodiesel is witnessing an increase in consumption on account of its properties such as lower toxic emissions and biodegradability. Biodiesel has been a demanding fuel in recent years, as it helps in raising the cetane number of the fuel and improves fuel lubricity. This improved lubricity helps in cing the friction within the moving parts by avoiding additional wear.
- North American countries such as the United States and Canada are expected to experience high growth in biodiesel use during the forecast period due to increased government support and environmental awareness to reduce greenhouse gas emissions.
- As per the data provided by the US Energy Information Administration (EIA) estimations, the United States biodiesel production is expected to grow slowly during 2050 due to major economic and policy factors.
- The United States had a biodiesel production capacity of 2.2 billion gallons per annum in FY 2021, down by some 9.4% from 2020. B5 has been used in the trucking industry and B20 biodiesel has been used with fleets of school and transit buses, garbage trucks, mail trucks, and military vehicles.
- All the aforementioned factors are expected to drive the fatty acid methyl ester market during the forecast period.
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The North American Region is Expected to Dominate the Market
- The North American region is expected to be the largest and fastest-growing market over the forecast period due to rising environmental awareness to reduce greenhouse gas emissions and increasing support from the government by giving tax incentives and rebates to encourage the use of biodiesel in the region.
- However, the COVID-19 pandemic impacted the fuel market due to lockdown regulations and travel bans around the world. This caused less consumption of biofuel by vehicles and decreased the consumption of fatty acid methyl esters.
- The North American region produced a total number of 13,427,869 vehicles in 2021, which was a ~20% decrease from 2020.
- Besides, due to their low VOC and biodegradable nature, the increased use of fatty acid methyl esters as a green solvent in the paints and coating industry is expected to further accelerate the development of the methyl ester fatty acid industry.
- Growing consumer spending on green products and growing understanding of the harmful effects of chemicals used in cosmetic products have led to an increase in the region's demand for oleochemicals, especially over the last few years.
- The high demand for personal care goods in the North American region is expected to fuel growth in the regional methyl ester fatty acid industry.
- Hence, all such market trends are expected to drive the demand for fatty acid methyl esters in the region during the forecast period.
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