Diesel Exhaust Fluid Materials: The Key to Reduced Nitrogen Oxide Emissions

Key Takeaways

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. Yara International and BASF SE are the largest producers and suppliers of DEF globally.

The implementation of more stringent emission standards such as Euro 6, China 6, and Bharat Stage VI in major diesel vehicle markets has led to increased demand for SCR systems. The growth of commercial vehicle production and sales supported by rising industrial and infrastructure development is a major factor driving DEF consumption.

Advancements in SCR technology have made the systems more cost-effective and durable. Original equipment manufacturers are able to deliver enhanced fuel efficiency and emissions performance with the latest generation of SCR catalysts. This encourages wider adoption of the technology across all vehicle categories and applications.

Market Trends

Growing preference for greener transportation - Stringent emission regulations along with rising environmental consciousness have increased the focus on developing greener alternatives. DEF usage helps comply with strict emission norms and reduces the carbon footprint of diesel vehicles.

Infrastructure expansion - Major players are collaborating with refueling station operators and logistics providers to ensure adequate DEF supply through dedicated pumps and transport facilities. This supports higher penetration of SCR systems.

Market Opportunities

Off-road vehicle applications - Regulations are being implemented for non-road vehicles as well. DEF suppliers can target construction, mining, and agriculture equipment manufacturers to increase product reach.

Advanced SCR solutions - Development of integrated SCR hardware, optimized DEF dosing technology, enhanced catalytics can boost the efficiency and lifespan of emission control systems. This opens new growth avenues.

Impact of COVID-19 on Diesel Exhaust Fluid Market Growth

The COVID-19 pandemic has significantly impacted the growth of the diesel exhaust fluid market. During the initial lockdown phase, restrictions on travel and transportation led to a steep decline in vehicle usage and mileage. This translated to reduced demand for diesel exhaust fluid (DEF) used in selective catalytic reduction (SCR) systems fitted in diesel trucks, buses, and other vehicles to reduce emissions of nitrogen oxides. However, with easing of lockdowns and resumption of economic activities from mid-2020, vehicle miles gradually recovered. This restored demand for DEF to some extent. Nevertheless, supply chain disruptions caused by lockdowns as well as low crude oil prices impacting mineral fertilizer production which is a source for urea used in DEF, continued restricting full market recovery in 2020 and 2021. Going forward, the market is expected to grow as global trade picks up pace and transportation mileage increases from 2022 levels onwards. Original equipment manufacturers are also promoting SCR technology in newer vehicles to meet stringent emission norms, supporting mid-to-long term demand growth post the pandemic.

Geographical Regions with Concentrated DEF Market Value

In terms of value, the DEF market is highly concentrated in North America and Europe currently. This is because adoption of SCR technology fitted with diesel powered trucks and buses for compliance with EPA and EURO emission standards is widespread in these regions. According to estimates, over 60% of the global DEF market value comes from sales in the United States and major countries of Western Europe where over-the-road long haul trucks constitute a large share of commercial vehicle fleet. Stringent emission regulations pertaining to nitrogen oxides along with availability of infrastructure for DEF distribution at truck stops and refueling centers has accelerated SCR technology acceptance.

Fastest Growing Regional DEF Market

The Asia Pacific region, excluding Japan and Australia, is expected to record the fastest growth in the DEF market during the forecast period. Countries like China, India are witnessing rapid upgrades in their commercial vehicle fleet to comply with evolving BS and equivalent emission norms. Local DEF producers are enhancing capacities and distribution networks to cater growing aftermarket requirements. Government support for adopting comprehensive emission control solutions and expanding trade with Europe and North America are favorable factors driving the Asia Pacific DEF market growth at a faster pace compared to mature regional markets.