Enforcement of Environmental Legislations Drives Growth in the Automotive and Marine Performance Fuel Additives Markets

Mumbai, Maharashtra, India

Across Europe, the Middle East and Africa, fuel additives are being increasingly used in automotive fuels such as gasoline and diesel, as well as marine fuels (bunker fuels) to enhance fuel and engine performance. Fuel additives are also emerging as an important feature in global fuel formulation, due to their ability to improve fuel productivity, reduce costs and address fuel specifications as required by environmental legislations.

Frost & Sullivan (http://www.chemicals.frost.com) finds that the EMEA automotive and marine performance fuel additives markets earned revenues of €446.0 million in 2005 and estimates this to reach €590.0 million in 2012.

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"Since 1996, the implementation of environmental legislations has imposed stringent control over sulphur emissions, thereby contributing to accelerated market growth," notes Frost & Sullivan Industry Analyst Mr. Robert Outram. "While 500 ppm was permitted in 1996 in accordance with Directive 94/12/EC (Euro I legislation), this was reduced to 350ppm in 2000 (Euro III) and subsequently to 50 ppm in 2005 (Euro IV) under Directive 98/69/EC. In the future, implementation of the specifications of Directive 2003/17/EC (Euro V) will result in an additional reduction in the emission permissible limit."

Adherence to emerging environmental legislations will result in greater adoption of fuel additives by vehicle original equipment manufacturers (OEMs) as well as fuel producers to meet emission and fuels standards. As reduced sulphur levels require more lubricants and conductivity improvers, demand for fuel additives will gain further momentum. Moreover, as a result of limited crude oil availability, fuel producers will exhibit greater dependence on the use of additives in low-grade fuel in order to fulfil necessary fuel specifications and meet growing customer demand.

Besides emission restrictions, the diesel fuel segment is likely to experience continued growth, as diesel fuel offers improved fuel economy in comparison to gasoline-powered vehicles. Meanwhile, various additives such as octane improvers, antioxidants additives, anticorrosion additives, deposit control additives among others, are also being used in gasoline to offer enhanced fuel performance. Within the bunker fuel additives segment, the enforcement of a specified regional limit in the Baltic Sea Sulphur Emission Control Area (SECA) is expected to result in the increased use of lubricants and conductivity improvers/static dissipators.

Given the maturity of the market, the gasoline additives segment is unlikely to demonstrate significant growth. However, diesel additives and other niche markets such as biofuels and premium fuels additives, which constitute a small percentage of the transport fuel additives market, will continue to exhibit developments.

"However, due to slow market growth, several classes of additives are becoming commoditised, thereby losing their importance as specialty chemicals," notes Mr. Outram. "Further, the developing trend of additives and precursors for synthesis being traded or auctioned over the Internet is anticipated to adversely affect revenues."

To prevent this decline in revenues, market participants will need to implement novel product launches and create new ranges of additives that are compatible with the latest vehicle technological developments. In addition, due to intensifying competition and the emergence of large global participants, additive manufacturers and formulators would do well to ensure a global presence and an extensive portfolio of additive products to remain competitive.

EMEA Automotive and Marine Performance Fuel Additives Markets is part of the Chemicals and Materials Subscription, which also includes research in the following markets: diesel additives, gasoline additives and bunker fuel additives. All research included in subscriptions provide detailed market opportunities and industry trends that have been evaluated following extensive interviews with market participants. Interviews with the press are available.

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EMEA Automotive and Marine Performance Fuel Additives Markets
B800

Shwetha Thomas, Corporate Communications, Frost & Sullivan, + 91 (022) 4001 3429 sthomas@frost.com

Surbhi Dedhia, Corporate Communications - India, Frost & Sullivan, + 91 (022) 4001 3431 sdedhia@frost.com

Source: Frost & Sullivan (Business Wire India)

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