Diesel Exhaust Fluid Market to Grow by USD 26.86 Billion (2024-2028), Driven by Rising Vehicle Production, AI-Powered Report Highlights Market Transformation - Technavio

NEW YORK, Nov. 13, 2024 /PRNewswire/ -- Report with market evolution powered by AI - The global diesel exhaust fluid market size is estimated to grow by USD 26.86 billion from 2024-2028, according to Technavio. The market is estimated to grow at a CAGR of almost 16.26% during the forecast period. Increasing production of vehicles is driving market growth, with a trend towards introduction of new technologies for the reduction of nox emissions. However, decrease in the demand for diesel engine vehicles poses a challenge.Key market players include Air Liquide SA, BASF SE, BRENNTAG SE, Cervantes Distribution Inc., CF Industries Holdings Inc., China Petrochemical Corp., Colonial Chemical Inc., Cummins Inc., Dyno Nobel, Innoco Oil Pte. Ltd., Midtex Oil L.P., MUSKET Corp., Nissan Chemical Corp., Northdale Oil Inc., Novax Material and Technology Inc., Nutrien Ltd., S CCI India Pvt. Ltd., Shell plc, TotalEnergies SE, and Yara International ASA.

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Key Market Trends Fueling Growth

The Diesel Exhaust Fluid (DEF) market is experiencing significant growth due to the increasing adoption of Diesel SCR vehicles. The DEF pump segment is a key driver, with OEMs and Tier-1 suppliers being major business activities. Urea, an essential component of DEF, is sourced from various suppliers like FMT Swiss Ag, with economic conditions impacting urea prices. Emission norms, such as the NOx Emissions Act, have led to an increase in demand for DEF as an anti-pollution agent. The DEF OE market is thriving in developed economies, but developing economies are also showing strong growth. The DEF aftermarket is also expanding, with LCVs and bulk supply mode being popular. Impacting factors include average mile driven, infrastructure, vehicle maintenance, and electric vehicle penetration. DEF is an odorless, colorless, non-flammable solution made from aqueous urea solution and deionized water. It reduces harmful pollutants like nitrous oxide (NOx), ammonia, carbon dioxide, nitrogen, and water vapor. Proper storage in temperature-controlled tanks made of polyethylene plastic or stainless steel is crucial for DEF's shelf life. The DEF market's future estimations show investment pockets in marine and aerospace industries, as they too adopt SCR technology to meet air quality standards. The workforce required for the DEF supply chain is also growing. 

The global automotive industry is addressing the issue of NOX emissions from diesel engines through innovative technologies. BMW's BluePerformance technology, which includes a diesel particle filter, NOX catalytic converter, and AdBlue, is one such solution. BMW offers this technology in nine models, enabling effective NOX reduction. Another groundbreaking technology is Ammonia Creation and Conversion Technology (ACCT), developed at Loughborough University. This AdBlue conversion technology utilizes waste energy to modify AdBlue for optimal performance at lower exhaust temperatures, making it an effective solution for reducing NOX emissions in diesel engines. 

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Market Challenges

• The Diesel Exhaust Fluid (DEF) market faces several challenges in various sectors. Diesel SCR vehicles require regular top-ups of DEF, making the aftermarket a significant business activity. Tier-1 OEMs and automobile manufacturers rely on DEF as an anti-pollution agent to meet emission norms. Urea, the primary component of DEF, is also used in engine coolants and as a raw material in various industries. The DEF pump segment is crucial, with bulk supply modes preferred for LCVs and infrastructure development in developing economies. Economic conditions and urea prices impact the market. SCR technology's adoption in marine, aerospace, and other industries is increasing, expanding the market scope. Impacting factors include DEF's shelf life, temperature sensitivity, and storage requirements. The DEF OE market is growing, with Tier-1 suppliers focusing on infrastructure and workforce expansion. However, electric vehicle penetration and infrastructure development pose challenges. DEF is an odorless, colorless, non-flammable aqueous urea solution used to reduce harmful pollutants like nitrous oxide (NOx), ammonia, carbon dioxide, nitrogen, and water vapor from exhaust gases. Its shelf life, temperature sensitivity, and storage requirements necessitate careful handling and logistics management. Investment pockets lie in infrastructure development, supply chain optimization, and technology innovation. The market is expected to grow, driven by stricter air quality standards and the increasing importance of environmental sustainability.
• The diesel engine market is anticipated to decline in the upcoming decades due to increasing environmental concerns and stricter regulations against diesel vehicle emissions. China, India, Germany, the UK, and France are significant markets for diesel vehicles. However, the rising issue of hazardous exhaust gases from diesel engines is leading to bans and restrictions in these countries. Government initiatives promoting electric vehicles pose a challenge to the diesel exhaust fluid market, as these vehicles do not require the use of DEF. This regulatory environment and shift towards cleaner technologies may negatively impact the growth of the diesel exhaust fluid market.

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Segment Overview 

This diesel exhaust fluid market report extensively covers market segmentation by

1. Vehicle Type
• 1.1 Commercial vehicles
• 1.2 Non-road vehicles
• 1.3 Passenger vehicles
• 1.4 Trains
2. Packaging 
• 2.1 Bulk
• 2.2 Cans and bottles
• 2.3 IBCs and drums
3. Geography 
• 3.1 North America
• 3.2 APAC
• 3.3 South America
• 3.4 Europe
• 3.5 Middle East and Africa

1.1 Commercial vehicles- The commercial vehicles segment, which includes heavy-duty trucks, light commercial vehicles like vans and small trucks, and passenger-carrying vehicles such as buses, coaches, and minibuses, accounted for the largest share of the global Diesel Exhaust Fluid (DEF) market in 2020. Commercial vehicles predominantly use diesel engines due to their high mileage, torque, and compression. Stringent regulations by governments and the Environmental Protection Agency (EPA) mandating the use of Selective Catalytic Reduction (SCR) technology in diesel engines have further boosted the demand for DEF. In the US, approximately 43% of commercial trucks utilize near-zero-emission diesel technologies, including DEF. The increasing demand for commercial vehicles worldwide is expected to drive the growth of the DEF market. Some regions are even considering the adoption of zero-emission commercial vehicles, such as California's Advanced Clean Truck Rule, which mandates medium and heavy truck manufacturers to sell zero-emission trucks from 2024 to 2030. Zero-emission technologies will be either electric battery-operated or hydrogen vehicles. With growing concerns over rising global temperatures, governments are implementing stringent laws to minimize carbon emissions. Harmful emissions from diesel engines are more than those from gasoline engines, making diesel engines a focus for regulatory bodies worldwide. The use of cleaner fuels, including gaseous fuels and liquid biofuels, is gaining traction in countries like India. These initiatives are expected to fuel the growth of the commercial vehicles segment and, in turn, the global Diesel Exhaust Fluid market during the forecast period.

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Research Analysis

The Diesel Exhaust Fluid (DEF) market is witnessing significant growth due to the increasing adoption of Diesel SCR vehicles to reduce harmful pollutants, particularly nitrogen oxides (NOx), from exhaust gases. DEF, an aqueous urea solution, is an essential component of Selective Catalytic Reduction (SCR) technology, which converts NOx into harmless nitrogen and water vapor during the combustion process. DEF pumps ensure the accurate dosage of DEF is supplied to the SCR system. The DEF aftermarket is also expanding as more OEMs offer retrofitting options for older vehicles to comply with stricter emission norms. Tier-1 suppliers provide DEF pumps and storage tanks to both OEMs and the aftermarket. DEF is an anti-pollution agent that plays a crucial role in reducing emissions. It is stored in specialized storage tanks and has a shelf life of approximately one year, depending on temperature conditions. The DEF market is influenced by factors such as miles driven, demand for DEF pumps, and the availability of urea, engine coolants, and other raw materials. Carbon dioxide, nitrogen, and water vapor are the primary components of DEF, making it an environmentally friendly alternative to traditional exhaust gas treatment methods. Proper handling and storage of DEF are essential to maintain its quality and effectiveness.

Market Research Overview

The Diesel Exhaust Fluid (DEF) market is a significant segment of the automotive industry, primarily used in Diesel SCR vehicles to reduce harmful NOx emissions. The DEF market consists of DEF pumps, urea, and other additives like engine coolants. The OEMs and Tier-1 suppliers dominate the DEF OE market, while the aftermarket caters to the needs of older vehicles. Developing economies are emerging as key business activities in the DEF market due to increasing emission norms and air quality standards. Bulk supply modes like FMT Swiss Ag dominate the market, while economic conditions, average mile driven, and vehicle maintenance impact demand. Urea, an aqueous urea solution, is the primary component of DEF, which is odorless, colorless, non-flammable, and made up of deionized water, nitrogen, and urea. The DEF pump segment is a crucial part of the exhaust system, located near the exhaust pipe, and supplies DEF to the SCR system. The DEF market is influenced by factors like electric vehicle penetration, infrastructure, urea prices, and future estimations. Investment pockets include marine, aerospace, and other industries that use DEF as an anti-pollution agent. The DEF market's shelf life, temperature, and storage tanks are essential considerations for its safe and effective use. The supply chain involves raw material suppliers, manufacturers, distributors, and end-users, requiring a skilled workforce to ensure efficient operations.

Table of Contents:

1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation

• Vehicle Type
• Commercial Vehicles
• Non-road Vehicles
• Passenger Vehicles
• Trains
• Packaging
• Bulk
• Cans And Bottles
• IBCs And Drums
• Geography
• North America
• APAC
• South America
• Europe
• Middle East And Africa

7 Customer Landscape
8 Geographic Landscape
9 Drivers, Challenges, and Trends
10 Company Landscape
11 Company Analysis
12 Appendix

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SOURCE Technavio