FATTY ACID METHYL ESTERS MARKET ANALYSIS

Fatty acid methyl esters (FAME) are fatty acids' esters. Fatty acid esters have physical qualities that are closer to those of fossil diesel fuels than pure vegetable oils, but their properties vary depending on the type of vegetable oil. Biodiesel is a renewable alternative fuel that is made up of a blend of various fatty acid methyl esters. Fatty acid methyl esters is non-toxic and biodegradable. The fatty acid methyl ester market is chemically oriented and has seen a significant shift in demand due to non-traditional uses of the product in a range of applications, including as environmentally friendly and low-cost fuels. Fatty acid methyl ester are used not only as biofuels, but also as lubricants, fuel additives, coatings, metalworking fields, cosmetics, and personal care products.

The global fatty acid methyl esters market is estimated to surpass US$ 82,939.6 Million by the end of 2030, in terms of revenue, exhibiting at a CAGR of 4.8% during the forecast period (2022 to 2030).

Drivers

During the forecast period, the market is likely to be driven by increasing demand for biodiesel due to fatty acid methyl ester environment-friendly nature. Fatty acid methyl ester is generally obtained from vegetable oils through transesterification, and it is mainly used as primary constituent in biodiesel. The growing dependency on fossil fuel and depleting reserves of fossil fuel have led to countries seeking alternative and sustainable fuel sources such as biodiesel. This, in turn, is expected to boost the consumption of fatty acid methyl ester which is a major raw material used in the manufacturing of biodiesel.

Biodiesel produced from fatty acid methyl ester has high cetane number, which helps incomplete combustion, thereby lowering emissions. Due to various government regulations in favor of bio-based products, the demand for fatty acid methyl ester is expected to rise in the near future. Favorable government policies for bio-based products in the U.S., Europe, India, and China is expected to have a positive impact on biodiesel consumption during forecast period, which in turn is expected to boost the demand for fatty acid methyl ester during forecast period.

For instance, according to the National Policy on Biofuels, the government of India is planning to blend 5% biodiesel by 2022, which is expected to drive the consumption of fatty acid methyl ester over the forecast period. Moreover, fatty acid methyl ester-based biodiesel has greater efficiency and better performance than mineral- based biodiesels.

Among region, Asia Pacific dominated the global fatty acid methyl esters market in 2021, accounting for 31.14% share, in terms of revenue, followed by Latin America and Europe. As a result of increase in demand for biodiesel from emerging economies such as China, Japan, South Korea, and India in the Asia Pacific region, . The growing consumer spending on green products and growing understanding of the harmful effects of chemicals used in cosmetic products have led to an increase in the region's demand for oleochemicals, which in turn is driving demand for fatty acid methyl ester. According to a survey performed by the All India Cosmetic Manufacturers Association in 2021, over 71% of Indian customers claimed they would purchase a face cream or lotion if it contained plant components. The growing demand for biodiesel from China Japan, South Korea, and India is expected to create lucrative opportunities for fatty acid methyl ester market.

Figure 1. Global Fatty Acid Methyl Esters Market, Revenue Share (%), By Region, 2021

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Market Restraints

The lack of awareness and adoption of biodiesel in many underdeveloped countries such as Nigeria, Central African Republic, Chad, Burundi, South Sudan, Mali, Burkina Faso, and others is restraining the fatty acid methyl ester market growth. The production of biodiesel requires huge investments and capital cost. The availability of such investments, skilled labors, and capital cost are key concerns for these underdeveloped countries, consequently reducing the adoption and application of biodiesel. Thus, the aforementioned factors are expected to restrain the fatty acid methyl ester market growth during forecast period.

Market Opportunities

Changes in the consumption habits of people is expected to drive the demand for bakery and confectionery products, which in turn is expected to influence the food & beverages industry growth. Nowadays, the inclusion of bakery products in daily diet is increasing in many emerging economies such as China, India, Brazil, South Africa, etc. In bakery preparations and confectioneries, fatty acid methyl ester is mainly used as an emulsifier. All of these factors are expected to create lucrative opportunities for the fatty acid ethyl ester market during the forecast period. Growing awareness about processed food coupled with increasing research and development activities for food processing equipment has increased the trust of consumers in the safety of processed foods. Thus, the aforementioned factors are expected to drive the demand for processed food, which in turn is expected to create lucrative opportunities for fatty acid methyl ester market.

Figure 2. Global Fatty Acid Methyl Esters Market – Opportunity Analysis

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Market Trends

The fatty acid methyl esters market is expected to be dominated by the fuel sector. Countries are looking for alternative fuel sources due to their increasing reliance on fossil fuels and the depletion of fossil fuel stocks. As a result, the methyl ester fatty acid market is expected to grow, as a demand for methyl ester fatty acid increases in the production of biodiesel. Along with its qualities such as fewer harmful emissions and biodegradability, biodiesel is becoming more popular. Biodiesel has been a popular fuel in recent years due to its ability to increase the cetane number and improve fuel lubricity. By lowering friction inside the moving parts and minimizing further wear, this improved lubricity aids in the reduction of friction. In 2019, the U.S. consumed roughly 43 million barrels (1.8 billion gallons) of biodiesel, given by the US Energy Information Administration (EIA) in August 2020. B5 biodiesel is utilized in trucking, and B20 biodiesel is used in school and transit bus fleets, garbage trucks, mail trucks, and military vehicles.

Figure 3. Global Fatty Acid Methyl Esters Market, Revenue Share (%), By Source, in 2021

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On the basis of source, vegetable oils dominated the global fatty acid methyl esters market in 2021, accounting for around 82.50% of market share, in terms of revenue, followed by animal fats and used cooking oils, owing to increasing demand for the fatty acid methyl ester derived from vegetable oils is used in various applications such as fuels, paints & coatings, food additives, surfactants, lubricants, metal working fluids, agrochemicals, and emulsifiers.

Global Fatty Acid Methyl Esters Market - Impact of Coronavirus (Covid-19) Pandemic

Manufacturing activities were halted during the pandemic due to supply chain disruptions and labor shortages, which in turn negatively affected the global fatty acid methyl esters market growth. Due to the coronavirus pandemic, the world is still facing unprecedented challenges. Fatty acid manufacturing companies are facing problems due to supply-demand disruption and building long-term strategies has become difficult. Growing concerns for freight rates and container shortages had cumulatively worsen supply chain problems. As result, raw material prices increased sharply and created panic situation for fatty acid methyl ester manufacturers. The COVID-19 pandemic has revealed the fragility of global supply chains. After the first wave of the pandemic, many paints and coatings companies are exploring local supply chains.

Competitive Section

Key players operating in the global fatty acid methyl esters market include Acme Synthetic Chemicals, ADM (Archer Daniels Midland Company), Berg + Schmidt GmbH & Co. KG, Cargill, Incorporated, Chemrez Technologies, Inc., CREMER OLEO GmbH & Co. KG, Elevance Renewable Sciences, Inc., Emery Oleochemicals, Godrej Industries Limited, JNJ Oil Industries, Inc., KLK OLEO, Krishi Oil Limited, Mohini Organics Pvt. Ltd., P&G Chemicals, Renewable Energy Group, Inc., Stepan Company, Univar Solutions Inc., Vertec BioSolvents Inc., Victorian Chemical Company Pty Ltd., and Wilmar International Ltd.

Few Recent Developments

In December 2019, announced to acquire performance technologies and industrial chemicals business. The acquisition would expand Cargill’s bio-industrial business to better serve industrial manufacturers for greener ingredient solutions. This acquisition would also help to grow Cargill's chemical business.