Demand for fuel additives is dependent upon two factors: fuel demand and fuel additive treat rates. All other things being unchanged, fuel additive demand should grow along with the growth of fuel demand. COVID-19 is expected to drive a sharp decline in fuel demand in 2020, which will be reflected in the fuel additives market. While fuel demand should recover from 2021 onwards as the global economy recovers, there may be some long-term changes in fuel consumption patterns. For example, growing penetration of electric vehicles will adversely impact the growth of fuel demand in the medium- to long-term, which, in turn, will impact fuel additive demand in the medium- to long-term.
Fuel additive treat rates vary due to such factors as regulations prescribing fuel specifications, mandated blending of biofuels, improvements in refining technology, and consumer demand for premium fuels. While demand for premium fuels is growing, improving refining technology results in a lower fuel additive treat rate.
Due to COVID-19, the overall fuel demand is estimated to decline around 15%, with jet fuel experiencing the sharpest decline in 2020. The fuel additive demand drop is expected be higher than fuel demand. This is mainly due to a higher decline in demand for the performance additive and the aftermarket segments, as sales of premium fuels are forecast to see sharper contraction compared to regular fuels.
The global fuel additives market witnessed a strong CAGR of 2.7% between 2015 and 2019. Based on the aforementioned factors, fuel additives consumption is expected to grow at a CAGR of 1.7% from 2019 to 2024. However, growth rates will vary across regions, fuel types, and additive categories. For example, the blending, shipping, and storage segment is expected to be least affected by COVID-19. Refineries will continue to add additives to adjust fuel specifications, and thus, the demand in this segment is expected to be in the same proportion as fuel demand.
Some additives, such as cetane improvers, lubricity improvers, corrosion inhibitors, detergents dispersants, and stabilizers, are expected to grow faster than the average market growth. For example, growing demand for diesel performance additives is expected to drive the demand for cetane improvers. Higher blending of ethanol in gasoline is driving demand for corrosion inhibitors.
Global Fuel Additives: Market Analysis and Opportunities is a comprehensive analysis of the global market for fuel additives, focusing on consumption by additive and fuel type, key trends, regulations, emerging fuels, leading marketers, market developments, challenges, and business opportunities. Regional Fuel Additive Market Profiles are detailed profiles of Asia, the European Union and Russia, North America, and South America, including a regional overview, fuel demand, fuel additive demand, regulations, market structure, and market outlook.