by Crude Tall Oil is a co-product of the kraft pulping process used to make paper from wood. Crude Tall Oil has been used traditionally in many applications like emulsifying agent, adhesive, concrete additive, lubricant, and biodiesel due to its ready availability and cost-effectiveness. It has advantages like being bio-based, renewable, biodegradable, and non-toxic in nature. Crude Tall Oil finds wide applications in lubricants, adhesives, soap and jet fuels due to its renewability and bio-degradability.
The Global Crude Tall Oil Market is estimated to be valued at US$ 1.93 BN in 2024 and is expected to exhibit a CAGR of 4.5% over the forecast period 2024 to 2031.
Key Takeaways
Key players operating in the Crude Tall Oil market are Citec Group Oy Ab, Ingevity Corporation, Georgia-Pacific Chemicals, Forchem Oyj, Kraton Corporation. Some of the key players are focusing on capacity expansion to meet the growing demand for Crude Tall Oil derivatives. For instance, in 2019, Kraton Corporation expanded its Crude Tall Oil refining capacity in Finland.
The growing adoption of bio-based chemicals and increasing use of Crude Tall Oil Market Demand derivatives like tall oil rosins and fatty acids in industries like adhesives, lubricants provides numerous growth opportunities for Crude Tall Oil market players. Furthermore, increasing research & development activities for applications of Crude Tall Oil derivatives in green chemicals and biofuels is expected to drive the market growth.
Technological advancements in refining processes to extract more derivatives from Crude Tall Oil and development of new applications are expected to support the market growth over the forecast period. For instance, ARome Technologies has developed a technology to produce green fuel and chemical intermediates from Crude Tall Oil.
Market Drivers
The major market driver is the increasing demand for bio-based products from end-use industries like construction, automotive, and chemicals industry. Crude Tall Oil being a bio-based renewable resource finds wide applications as a substitute for petroleum-based products. Furthermore, stringent government regulations regarding the use of eco-friendly substitutes are propelling the demand for Crude Tall Oil. Advancements in extraction technologies to recover higher purity derivatives from Crude Tall Oil are also supporting its adoption across diverse industries.
Current challenges in the Crude Tall Oil Market:
The Crude Tall Oil market is facing challenges due to fluctuating crude oil prices and economic uncertainties caused by the Covid-19 pandemic and geopolitical tensions. Volatility in crude oil prices affects the profitability of tall oil derivative production. The partial or full lockdowns imposed by various countries to curb the spread of the virus negatively impacted demand from the construction and automotive industries in 2020-21. Transportation disruptions made it difficult for producers to deliver goods on time. Rising transportation and raw material costs also put pressure on profit margins of Crude Tall Oil producers. Sustainability issues and growing preferences for bio-based products are encouraging manufacturers to invest in green tall oil production technologies.
SWOT Analysis:
Strength: Crude Tall Oil is a readily available and low-cost byproduct of the kraft pulping process. It is a sustainable raw material for various applications.
Weakness: Fluctuations in crude oil prices affect the demand and pricing of tall oil derivatives. Environmental regulations are becoming more stringent for chemical industries.
Opportunity: Increasing consumption of bio-based products provides opportunities for tall oil producers to expand their green product portfolios. Growing paints, coatings and construction industries present new areas of growth.
Threats: Availability of substitutes like vegetable oil and other bio-based raw materials poses competition to Crude Tall Oil. Economic slowdowns negatively impact end-use industries and tall oil demand.
Geographical regions concentration:
The North American region currently accounts for the largest share in the global Crude Tall Oil market in terms of value, led by the United States. This is attributable to the presence of major tall oil derivative producers and kraft pulp mills in the region. Europe is also among the major Crude Tall Oil consuming regions globally, with high consumption reported from Nordic countries where tall oil extraction is widely practiced.
Fastest growing region:
The Asia Pacific region is projected to be the fastest growing market for Crude Tall Oil during the forecast period. Increasing automotive, construction and paper production in China and other emerging economies is driving the demand for Crude Tall Oil derivatives in the region. Moreover, rising disposable incomes have been boosting paints, coatings, rubber and other end-use industries, thereby contributing to the growth of the Asia Pacific Crude Tall Oil market.
*Note:
1. Source: Coherent Market Insights, Public sources, Desk research
2. We have leveraged AI tools to mine information and compile it
