By OGJ editors
HOUSTON, May 14 -- US fuel additives demand is expected to grow 4.8%/year during 2001-06 to $12.6 billion in 2006, said Freedonia Group Inc., a Cleveland market research firm, in a new study.
Growth is expected to decline sharply compared to 1992-2001 because of the anticipated phase-out of methyl tertiary butyl ether. MTBE is being phased out in response to concerns that the additive contaminates groundwater as a result of leaks from gasoline storage tanks.
Currently, 12 states have passed legislation that would severely limit, or eliminate entirely, the use of MTBE. The US Environmental Protection Agency and Congress are considering a federal phase-out of MTBE (OGJ, Jan. 14, 2002, p. 18).
The Freedonia Group said market value for oxygenated fuel additives, including MTBE, ethanol, biodiesel, and others, will increase 4.7%/year to $11 billion, although the volume is forecast to increase less than 1%/year.
MTBE accounted for the majority of US oxygenate demand in 2001, but ethanol is forecast to become the leading oxygenate in use by 2006, the study said. Demand for fuel-grade ethanol is expected to rise more than 20%/year to a market value of $8.1 billion in 2006.
However, because less than half as much ethanol is required to provide the same oxygenating benefit as MTBE, the overall oxygenate content of gasoline is expected to decline through 2006.
Ethanol also will benefit from proposed legislation that would promote greater production and use of renewable fuels, Freedonia Group said.
Biodiesel demand also is forecast to record strong gains because of growing demand for cleaner fuel stocks and a desire to reduce reliance on petroleum feedstocks, the study said. Biodiesel demand is expected to see 30%/year growth during 2001-06, and demand is projected to reach a market value of $130 million in 2006.
Growth will be spurred by the expanding use of renewable fuels to increase national energy security and reduce US reliance on imported oil, Freedonia Group said.
Specialty fuel additives
Demand for specialty fuel additives in the US is forecast to advance 5.7%/year during 2001-06 to $1.6 billion in 2006.
US legislation concerning emission standards for diesel engines is expected to drive that demand, the study said.