April 24, 2024

The Growing Automotive Sector Boosts the Diesel Exhaust Fluid Market

Diesel exhaust fluid, also known as AdBlue, is an inorganic liquid solution made of 67.5% deionized water and 32.5% urea, which is used to convert harmful nitrogen oxides into harmless nitrogen and water in diesel exhaust systems. It is sprayed into the exhaust stream of diesel vehicles equipped with selective catalytic reduction (SCR) systems to reduce emission levels of nitrogen oxides released from diesel engines. Diesel exhaust fluid plays a vital role in meeting increasingly stringent regulations on vehicle emissions set by various governments and environmental agencies. Rapid expansion of the global automotive industry, especially commercial vehicles with diesel engines, has increased the demand for AdBlue to ensure purification of exhaust gases to permissible levels.

The global Diesel Exhaust Fluid Market is estimated to be valued at US$ 11.60 Mn in 2024 and is expected to exhibit a CAGR of 7.6% over the forecast period 2023 to 2030, as highlighted in a new report published by Coherent Market Insights.

Market key trends:

One of the key trends in the diesel exhaust fluid market is the increasing stringency in emission norms by regulatory bodies across nations. stricter emission standards set by agencies such as the Environmental Protection Agency (EPA) in the US and the Resource Conservation and Recovery Act (RCRA) have compelled automakers to employ advanced emission control technologies such as selective catalytic reduction (SCR) systems that utilize diesel exhaust fluid to meet these emission norms. For instance, in the US non-road diesel engines are required to meet Tier 4 emission standards in 2015 that mandate up to 90% reduction in particulate matter and nitrogen oxide emissions compared to Tier 3 standards. Such stringent regulatory frameworks will significantly drive the demand for diesel exhaust fluid over the coming years.

Porter’s Analysis
Threat of new entrants: The threat of new entrants is medium for the Diesel Exhaust Fluid market as the Diesel Exhaust Fluid market is dominated by few major players with established distribution network and technology. However, developing economies provide opportunities for local players to enter this market.

Bargaining power of buyers: The bargaining power of buyers is high as Diesel Exhaust Fluid is a commodity product and buyers have a wide range of suppliers to choose from.

Bargaining power of suppliers: The bargaining power of suppliers is medium as raw materials suppliers have established presence. However, suppliers do not have the bargaining power to influence prices.

Threat of new substitutes: There is low threat from substitutes as Diesel Exhaust Fluid meets the emission standards effectively with no close substitutes.

Competitive rivalry: The competitive rivalry in the Diesel Exhaust Fluid market is high due to the presence of few major players competing on pricing and product differentiation.

Key Takeaways
The global Diesel Exhaust Fluid market is expected to witness high growth. Asia Pacific region is expected to be the fastest growing market for Diesel Exhaust Fluid owing to rising vehicular emissions in countries like China and India.

Regional analysis: Asia Pacific region dominates the Diesel Exhaust Fluid market with countries like China, India, and Japan being the major markets. Growing vehicular emissions and stringent regulations regarding emission control is driving the demand for Diesel Exhaust Fluid in the region.

Key players operating in the Diesel Exhaust Fluid market are Yara International, BASF SE, CF Industries Holdings Inc., Agrium Inc., Cummins Inc., Shell ROTELLA (Royal Dutch Shell Inc.), Mitsui Chemicals Inc. and KOST USA. Key players are focusing on capacity expansion strategies to consolidate their position in the market.