Fatty Acid Ester Market - Growth, Trends, COVID-19 Impact, and Forecasts (2021 - 2026)

Fatty Acid Ester Market - Growth, Trends, COVID-19 Impact, and Forecasts (2021 - 2026)

  • September 2021 •
  • 161 pages •
  • Report ID: 6155702 •
  • Format: PDF
The Fatty Acid Ester Market was estimated at 50,200 kilo tons in 2021 and is expected to reach 67,550 kilo tons by 2026, registering a CAGR of over 6%, during the forecast period.

The market was negatively impacted by COVID-19. Considering the food supply chain, one of the most important sectors of the economy, it was seen that the COVID-19 pandemic had an impact on the whole process from the field to the consumer. Additionally, the COVID-19 pandemic raised concerns over food production, processing, distribution, and demand. The pandemic resulted in restrictions on the movement of workers, changes in demand of consumers, closure of food production facilities, restricted food trade policies, and financial pressures in food supply chain. The supply chain affects not only producers, distributors, and consumers, but also food-processing plants that are labour intensive. Production was reduced, suspended, or temporarily discontinued in many plants.

Key Highlights
Over the short term, one of the main factors driving the market is the rising demand for personal care products in Asia-Pacific Region.
However, negative impact of COVID-19 is expected to hinder the growth of the market studied.
Growing preference toward biodiesel is likely to act as an opportunity for the market studied in the coming years.

Key Market Trends

Increasing Demand for the Fatty Acid Ester Market from Bio Fuel Applications

Biofuel applications are significant application of fatty acid esters. Biofuel is a type of fuel produced through different processes from biomass, rather than the prolonged geological processes involved in the formation of fossil fuels, such as oil.
Fatty acids can be formed by the hydrolysis of fats or oils (triglycerides) or the fractional distillation of tall oil. The hydrolysis can be carried out with acids like sulphuric acid, at low temperatures or in the presence of a catalyst. These fatty acids can further be refined by fractional distillation. After this process, the ester is formed over a solid catalyst. Most fatty acids are generated from tallow, palm kernel, tall oil, soya oil, and sunflower oil.
Besides the other applications mentioned before, one of the biggest consumers of fatty acids is biodiesel. In this process, oils from plants and tallow (tri-glycerides) are brought in contact with methanol under alkaline conditions to form fatty acid methyl ester, commonly known as FAME. Several million tons of FAME are produced globally, with the majority being consumed in Europe and the USA as it blends into the diesel.
Biodiesels made from fatty acid esters (renewable sources) are safer for the environment. Biodiesel produces fewer toxic pollutants and greenhouse gases than petroleum diesel. They can be used in pure form (B100) or can be blended with petro-diesel in the form of B2 (i.e., 2% biodiesel, 98% petroleum diesel), B5 (i.e., 5% biodiesel, 95% petroleum diesel). Likewise, they can be used as B20, B100. In some cases, biodiesel is used as-is (B100), majorly by large truck companies.
Biodiesel has also helped several countries to reduce their dependence on foreign oil reserves, as they are domestically produced and can be used in any diesel engine with little or no modification to the engine or the fuel system.
The Asia-Pacific region is expected to witness a lucrative growth rate in this market, with government bodies of several countries announcing plans for biodiesel. For instance, in December 2019, Indonesia became the first nation to mandate a B30 blend of palm-based fuel. The Indonesian government allocated 9.59 million kiloliters of FAME for the B30 mandate in 2020, up from 6.63 million KL in 2019.
According to BP Statistical Review, biodiesel consumption in the year 2020 was 682 thousand barrels per day, with Europe being one of the key regions with 281 thousand barrels of oil equivalent per day.
Hence, owing to the above-mentioned factors, the application of fatty acid ester in bio fuel applications is likely to dominate during the forecast period.

Asia-Pacific Region to Dominate the Market

The Asia-Pacific region is expected to dominate the market for fatty acid esters during the forecast period. Personal care products and detergents in major economies, such as China, India, and Japan, are estimated to boost the market studied during the forecast period.
The largest producers of fatty acid esters are based in the Asia-Pacific region. Some of the leading companies in the production of fatty acid esters are KLK OLEO, P&G Chemicals, Croda International PLC, Stepan, and Wilmar International Ltd.
The growing consciousness toward maintaining an individual’s appearance and a considerable increase in disposable incomes, are factors majorly driving the cosmetics products market in the Asia-Pacific region, which, in turn, increases the demand for fatty acid esters in this region.
Rising consumer expenditure on green products and increasing awareness regarding the harmful effects of chemicals used in cosmetic products have resulted in a rise in the oleochemicals market in the region, especially over the past few years.
Asia-Pacific is the largest oil and fat producer and raw material base for oleochemicals, globally, with Asia-Pacific region having better control of the production and distribution of oleochemicals.
China by far, is the largest consumer of lubricants in the current scenario. The vast manufacturing activities pertaining to different sectors and the rapid growth in the industrial and automotive sectors have pushed the country to stand among the major consumers and producers in the landscape. The rate of consumption is expected to remain the same in the country, irrespective of the economy witnessing a slow growth.
Furthermore, India ranks third in terms of pharmaceutical production by volume and 14th by value. The domestic pharmaceutical industry includes a network of 3,000 drug companies and ~10,500 manufacturing units.India’s drugs and pharmaceuticals exports stood at USD 24.44 billion in FY21. India is the 12-largest exporter of medical goods in the world. The country’s pharmaceutical sector contributes 6.6% to the total merchandise exports.
Owing to the above-mentioned factors, the market for fatty acid esters in the Asia-Pacific region is projected to grow significantly during the study period.

Competitive Landscape

The fatty acid ester market is partially fragmented in nature with only a few major players dominating the market. Some of the major companies are Wilmar-International, Avril, Renewable Energy Group, Granol, and Cargill Corporation.

Additional Benefits:

The market estimate (ME) sheet in Excel format
3 months of analyst support

We are very sorry, but an error occurred.
Please contact [email protected] if the problem remains.