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Specialty Fuel Additives

US demand to reach $1.6 billion in 2016
The US specialty fuel additive market will rise at a healthy pace, reaching $1.6 billion by 2016. Advances will be driven by a rebound in petroleum fuel demand as the economic recovery continues to strengthen, and an increase in additive rates due to greater biofuel consumption as mandated by the federal government. Additionally, market growth will reflect further price inflation, though at a slower pace than during the 2006- 2011 period.

Going forward, government regulations will play a significant role in the demand for specialty fuel additives. The EPA will raise the amount of biodiesel and ethanol usage in the fuel supply in an effort to meet the requirements of the Renewable Fuel Standard 2 (RFS2). These biofuels require the usage of different specialty fuel additives. For example, the EPA’s move to allow up to 15 percent ethanol blends in gasoline will stimulate corrosion inhibitor demand.

Deposit control agents to remain largest segment
Some of the biggest impacts of the RFS2 regulations will be in the diesel additive segment. Cold flow improvers will grow at the fastest rate relative to other fuel additives due to the rising use of biodiesel. Biodiesel’s reduced functionality in diesel engines in winter conditions requires higher loadings of cold flow improvers. However, biodiesel’s high cetane number and excellent lubricity will also contribute to a reduction in the demand for lubricity improvers and cetane improvers. Overall, diesel additive volume demand will rise through 2021 due to increasing diesel fuel demand as the expanding economy leads to more goods shipping and more fuel-efficient passenger diesel cars entering the market.

Increased biofuel consumption will also impact gasoline additives. Corrosion inhibitors will grow at a pace slightly above average, reflecting ethanol’s increasing usage in the gasoline supply. Deposit control agents will remain the largest product segment, though annual increases will be modest. A previous attempt by the EPA to regulate detergent levels in gasoline actually resulted in a fall in demand, causing deposit-related engine problems. This prompted several automakers to establish the Top Tier Detergent Gasoline standard in 2004. Deposit control demand rebounded quickly as most major gasoline brands adopted the Top Tier standard. Through 2016, the modest growth in this segment will be driven by recent retailer efforts to differentiate their products to customers by promoting the high concentrations of detergents in their gasoline.

Blender & terminal additive demand to continue growth
From a market perspective, blender and terminal additive demand will continue to grow at the expense of the refinery market as the industry continues to shift toward more independent and customized refinery operations. The efforts of smaller fuel retailers to boost detergent levels as part of their marketing strategy will also favor growing demand in the blender and terminal market, as will greater biodiesel consumption. This latter trend will also lead to more cold flow improver being added at the blender and terminal level. Though much smaller than the blender and terminal market, aftermarket demand will grow at the fastest pace as customers try to offset higher fuel costs by maintaining the internal cleanliness of their engines. Rising aftermarket demand will also reflect a decision by some retailers to let consumers buy additives at the pump.


PRESS RELEASE

US Demand for Specialty Fuel Additives to Reach $1.6 Billion in 2016

US demand for specialty fuel additives will grow 4.8 percent per year to $1.6 billion in 2016, with volume demand increasing 1.1 percent annually to 725 million pounds. Advances will be driven by a mild rebound in petroleum fuel demand as the economic recovery continues to strengthen and by an increase in additization rates due to rising biofuel consumption as mandated by the federal government. Additionally, market growth will reflect continued price inflation due to upward pressure on raw material costs as natural gas prices rebound from their 2012 lows. These and other trends are presented in Specialty Fuel Additives, a new study from The Freedonia Group, Inc., a Cleveland-based industry market research firm.

Cold flow improvers will grow at the fastest rate through 2016 due to the increasing use of biodiesel in the fuel supply, a requirement of the EPA’s Renewable Fuel Standard 2 (RFS2). Biodiesel’s reduced functionality in diesel engines in winter conditions requires higher loadings of cold flow improvers, which will help drive demand. However, biodiesel’s high cetane number and excellent lubricating properties will also contribute to a reduction in the use of lubricity improvers and cetane improvers, making them the only additives to experience a decline in volume demand through 2016. Dyes and markers and metal deactivators will also not benefit from growing fuel demand, with volume demand for both products remaining flat through 2016. Dyes and markers will be mildly impacted by an end to EPA-mandated dyeing of high sulfur fuels, while metal deactivator loadings will decrease slightly due to the use of more metal-free additives in fuel. Demand for antioxidants, corrosion inhibitors, and other additives will all expand at a moderate pace, due to increasing fuel demand.

Deposit control agents will remain the largest product segment. A previous attempt by the EPA to regulate detergent levels in gasoline actually resulted in a decrease in demand, causing deposit-related engine problems. This prompted several automakers to establish the Top Tier Detergent Gasoline standard in 2004. Deposit control demand rebounded quickly as most major gasoline brands adopted the Top Tier standard. Future growth in this segment will be aided by recent retailer efforts to differentiate their products by promoting the high concentrations of detergents in their gasoline.

  • INTRODUCTION
  • EXECUTIVE SUMMARY
    • Table US SPECIALTY FUEL ADDITIVE DEMAND (million dollars)
  • MARKET ENVIRONMENT
    • General
    • Macroeconomic Overview
      • Table MACROECONOMIC INDICATORS (billion 2005 dollars)
    • Motor Vehicle Industry Overview
      • Table MOTOR VEHICLE INDICATORS
    • Historical Market Trends
      • Table SPECIALTY FUEL ADDITIVE MARKET, 2001-2011
    • Pricing Trends
      • Table SPECIALTY FUEL ADDITIVE PRICES (dollars per pound)
    • Technology
      • Gasoline Engines
      • Diesel Engines
      • Hybrids & Electric Vehicles
      • Fuels
    • International Activity
    • Environmental & Regulatory Issues
      • Gasoline Regulations
      • Diesel Fuel Regulations
      • Renewable Fuels Legislation
      • CAFE Standards
  • FUEL INDUSTRY OVERVIEW
    • Crude Oil & Refined Petroleum Products Outlook
      • Table PETROLEUM INDUSTRY OUTLOOK (million barrels)
    • Fuel Demand
      • Table PETROLEUM FUEL SUPPLY & DEMAND (billion gallons)
      • Gasoline
        • Table GASOLINE SUPPLY & DEMAND (billion gallons)
        • Table GASOLINE DEMAND BY GRADE & FORMULATION (billion gallons)
      • Distillate Fuel
        • Table DISTILLATE FUEL SUPPLY & DEMAND (billion gallons)
        • Table DIESEL FUEL DEMAND BY SULFUR CONTENT (billion gallons)
      • Jet Fuel
        • Table JET FUEL SUPPLY & DEMAND (billion gallons)
      • Residual Fuel
        • Table RESIDUAL FUEL SUPPLY & DEMAND (billion gallons)
    • Alternative Fuels & Energy Threats
      • Ethanol
      • Biodiesel
      • Natural Gas
      • Propane
      • Electricity
      • Other Energy Threats
    • Commodity Fuel Additive Outlook
      • Table COMMODITY FUEL ADDITIVE DEMAND (million gallons)
      • Ethanol
      • Biodiesel
      • Other Commodity Fuel Additives
  • SPECIALTY FUEL ADDITIVES BY TYPE
    • General
      • Table SPECIALTY FUEL ADDITIVE DEMAND BY TYPE (million dollars)
    • Deposit Control Additives
      • Table DEPOSIT CONTROL ADDITIVE DEMAND
      • Detergents
        • Table FUEL DETERGENT DEMAND
      • Other Deposit Control Additives
        • Table OTHER DEPOSIT CONTROL ADDITIVE DEMAND
    • Cetane Improvers
      • Table CETANE IMPROVER DEMAND
    • Antioxidants
      • Table ANTIOXIDANT DEMAND
    • Lubricity Improvers
      • Table LUBRICITY IMPROVER DEMAND
    • Cold Flow Improvers
      • Table COLD FLOW IMPROVER DEMAND
    • Petroleum Dyes & Markers
      • Table PETROLEUM DYE & MARKER DEMAND
    • Corrosion Inhibitors
      • Table CORROSION INHIBITOR DEMAND
    • Metal Deactivators
      • Table METAL DEACTIVATOR DEMAND
    • Other Specialty Fuel Additives
      • Table OTHER SPECIALTY FUEL ADDITIVE DEMAND
      • Octane Enhancers
      • Biocides
      • All Other
  • SPECIALTY FUEL ADDITIVES BY APPLICATION & MARKET
    • General
    • Applications
      • Table SPECIALTY FUEL ADDITIVE DEMAND BY APPLICATION (million dollars)
      • Gasoline Additives
        • Table GASOLINE ADDITIVE DEMAND (million dollars)
        • Table REGULAR & MIDGRADE GASOLINE ADDITIVE DEMAND (million dollars)
        • Table PREMIUM GASOLINE ADDITIVE DEMAND (million dollars)
      • Diesel Fuel Additives
        • Table DIESEL FUEL ADDITIVE DEMAND (million dollars)
      • Other Fuel Applications
        • Table OTHER FUEL ADDITIVE DEMAND
    • Markets
      • Table SPECIALTY FUEL ADDITIVE DEMAND BY MARKET (million pounds)
      • Blenders & Terminals
        • Table BLENDER & TERMINAL FUEL ADDITIVE DEMAND (million pounds)
      • Refiners
        • Table REFINER FUEL ADDITIVE DEMAND (million pounds)
      • Aftermarket
        • Table AFTERMARKET FUEL ADDITIVE DEMAND (million pounds)
  • INDUSTRY STRUCTURE
    • General
      • Table SPECIALTY FUEL ADDITIVE SALES BY COMPANY, 2011 (million dollars)
    • Market Share
    • Competitive Strategies
    • Marketing & Distribution
    • Merger & Acquisition Activity
      • Table SELECTED ACQUISITIONS & DIVESTITURES
    • Cooperative Agreements
      • Table SELECTED COOPERATIVE AGREEMENTS
    • Company Profiles
      • Albemarle Corporation
      • Armored AutoGroup Incorporated
      • Ashland Incorporated
      • Baker Hughes Incorporated
      • BASF SE
      • Berkshire Hathaway Incorporated
      • Buckman Laboratories International Incorporated
      • Champion Technologies Incorporated
      • Chemtura Corporation
      • Chevron Corporation
      • Clorox Company
      • ConocoPhillips
      • Dorf Ketal Chemicals I Pvt Limited
      • Dow Chemical Company
      • DuPont (EI) de Nemours
      • Ecolab Incorporated
      • Evonik Industries AG
      • Exxon Mobil Corporation
      • Groupe SNPE
      • Huntsman Corporation
      • ICC Industries Incorporated
      • Illinois Tool Works Incorporated
      • Innospec Incorporated
      • LyondellBasell Industries NV
      • NewMarket Corporation
      • Parker-Hannifin Corporation
      • Royal Dutch Shell plc
      • Société Anonyme d'Explosifs et de Produits Chimiques SA
      • Soltex Incorporated
      • Stepan Company
      • TPC Group Incorporated
      • Warren Oil Company Incorporated

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