The diesel exhaust fluid market is estimated to be valued at US$ 11.60 Mn in 2023 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 Overview:
Diesel exhaust fluid, also known as AdBlue, is a liquid reductant used in SCR (selective catalytic reduction) systems to lower NOx emissions from diesel engines. It is a urea-based solution that consists of 32.5% urea and 67.5% de-ionized water. When injected into the exhaust stream, the fluid decomposes to form ammonia that provides the necessary reductant for NOx reduction in diesel exhaust on the SCR catalyst. Diesel exhaust fluid is predominantly used in heavy-duty diesel vehicles, construction equipment, agricultural machinery, and power generators.
Market Dynamics:
Stringent emission regulations imposed by environmental agencies across the globe are a key driver boosting demand for DEF. New legislative norms such as Euro 6 norms in Europe and BS-VI norms in India mandate significant reduction of NOx emissions from diesel vehicles. This has prompted inclusion of SCR technology with DEF dosing in diesel engines. Additionally, growing need for sustainable construction and mining equipment is also propelling consumption of DEF. However, lack of infrastructure for DEF distribution and refilling in developing regions poses a challenge to market growth. Key players are focusing on expanding networks of distributors, retailers, and refilling stations to address this issue.
SWOT Analysis
Strength: Diesel exhaust fluid is the simplest way to reduce vehicle emissions and meet stringent emissions norms. It is easy to use and refill. The global demand for diesel vehicles is rising which is driving the demand for DEF.
Weakness: Higher production and distribution costs of DEF are a challenge for manufacturers. Fluctuations in raw material prices directly impact the costs. Improper handling and storage of DEF can degrade its quality.
Opportunity: Stringent emissions regulations worldwide are necessitating the use of DEF. Developing nations are also adopting emissions norms which will boost the market. New applications of DEF beyond diesel vehicles can further increase consumption.
Threats: Growth of electric vehicles poses a threat to the diesel vehicle industry indirectly impacting DEF demand. Alternative emissions reduction technologies can replace the need for DEF. Strict quality control and anti-dumping measures impact global trade.
Key Takeaways
The global diesel exhaust fluid market is expected to witness high growth, exhibiting CAGR of 7.6% over the forecast period, due to stringent emissions norms worldwide mandating the use of DEF in diesel vehicles. North America dominated the global market in 2023 owing to the widespread presence of tier-1 automakers and fully implemented EPA standards.
Regional analysis: The Asia Pacific region is expected to grow at the fastest pace due to a large automobile production base and growing adoption of advanced emissions regulations in major countries like China and India. Stringent monitoring of vehicular emissions in cities will further support the Asia Pacific DEF market.
Key players analysis: 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. Players are focusing on expanding production capacities and global distribution networks to leverage opportunities in emerging markets.
