The global fuel additives market size is projected to reach USD 12,117.8 million by 2028 owing to the increasing government regulations on the automotive industry regarding carbon emissions, states Fortune Business Insights™ in its report, titled “Fuel Additives Market, 2021-2028”. The report further states that the global market value was USD 7,701.0 million in 2020 and the market is expected to register a CAGR of 5.8% from 2021 to 2028.
The demand for fuels has taken a substantial dip amid the COVID-19 pandemic. Firstly because of nationwide lockdowns bringing down vehicle moment to almost zero. Secondly because of travel bans across the world. In addition, this impact has lasted for a longer period of time due to the complete shutdown of production worldwide. The impact had been so intense that in April 2020, the crude oil futures dropped to less than zero for the first time in history. This has had a huge impact on the fuel additives market growth. The year-on-year growth of the market has witnessed a substantial fall in 2020.
Stringent Government Regulations to Drive Market Growth
Vehicles are one of the primary factors contributing to the global carbon footprint. According to the United States Environmental Protection Agency, an average passenger vehicle can emit nearly 4.6 metric tons of carbon dioxide every year. This has compelled governments worldwide to enforce stringent regulations on automotive manufacturers. These regulations are estimated to drive the growth of the market. In addition, increasing research and development activities from industry leaders regarding new ultra-low sulfur diesel engine, that requires fuel additives for operations, are projected to further bolster the demand.
Gasoline Segment to Dominate Backed by Growing Automotive Sector
The market is categorized on the basis of type, application, and geography. In terms of type, the market is divided into deposit control, cetane improvers, lubricity improvers, cold flow improvers, stability improvers, octane improvers, and corrosion inhibitors. Based on application, it is fragmented into gasoline, diesel, and aviation fuel. The gasoline segment is estimated to hold the largest market share backed by the flourishing automotive sector. The segment held the largest share in the U.S. market as well. On the basis of geography, it is segmented into North America, Europe, South America, Asia Pacific, and the Middle East & Africa.
Flourishing Aerospace Industry in the U.S. to Boost Demand in North America
North America is set to hold the lion's fuel additives market share during the projected timeline. The rapidly increasing aerospace and defense industry in the U.S. is driving the market growth of fuel additives in the region. In addition, increasing oil & gas exploration activities in countries such as the U.S. and Canada, are anticipated to strengthen the demand for fuel additives.
The high rate of production and sales in countries including China and India is predicted to drive the market growth in the Asia Pacific. Moreover, the high consumption of retail fuel backed by the increasing population will further promote the adoption.