Product Innovation Crucial to Combat Increasing Commoditisation of Fuel Additives

DUBLIN, Ireland--Research and Markets has announced the addition of Frost & Sullivan's new report: EMEA Automotive and Marine Performance Fuel Additives Markets to their offering.

Environmental Legislation Promotes the Use of Fuel Additives in Automotive and Marine Fuels

Fuel additives are an important feature in automotive fuels such as gasoline and diesel, as well as marine (bunker) fuels due to their ability to address fuel specification and performance problems. Benefits such as the enhancement of fuel and engine performance, improvements in fuel production quality and reduction in fuel costs are other factors driving an increase in the uptake of fuel additives. Moreover, the implementation of environmental legislation is likely to contribute to sustained growth of the fuel additives market in Europe, the Middle East and Africa.

The implementation of the environment legislation since 1996 has imposed stringent control over sulphur emissions, thereby contributing to accelerated market growth, remarks the analyst of this research service. While 500 ppm was permitted in 1996 in accordance with Directive 94/12/EC (Euro I legislation), this was reduced to 350 ppm 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 decrease of the permissible emissions limit. Hence, adherence to emerging environmental legislation will result in greater adoption of fuel additives by vehicle original equipment manufacturers (OEMs) and fuel producers to meet stringent emission and fuel standards.

With the enforcement of a specified regional limit in the Baltic Sea Sulphur Emission Control Area (SECA), the use of lubricants and conductivity improvers/static dissipaters is likely to witness a rise, thereby contributing to greater demand in the bunker fuel additives segment. Meanwhile, as diesel fuel offers improved fuel economy in comparison to gasoline powered vehicles, diesel fuel additives will also contribute to overall market development. However, while 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 demonstrate growth, the gasoline additives segment, due to its maturity, is unlikely to exhibit much potential.

Moreover, due to slow market growth, several classes of additives are becoming commoditised, thereby losing their importance as specialty chemicals, says the analyst. The developing trend of additives and precursors for synthesis being traded or auctioned over the Internet is also anticipated to adversely affect revenues. Hence, 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 view of the emergence of large global participants, additive manufacturers and formulators will have to ensure a global presence and an extensive portfolio of additive products to remain competitive.

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