The diesel exhaust fluid market comprises selective catalytic reduction systems that inject urea-based liquid into vehicle exhaust streams to reduce emissions of nitrogen oxides. As a colorless, non-flammable, and non-hazardous liquid, diesel exhaust fluid helps meet stringent emission regulations when used in diesel engine vehicles and diesel generators. It breaks down into ammonia and carbon dioxide after entering the SCR catalyst that converts NOx gases into less harmful nitrogen and water vapor. The Global Diesel Exhaust Fluid Market is estimated to be valued at US$ 11.60 Mn in 2024 and is expected to exhibit a CAGR of 7.6% over the forecast period 2023 to 2030.

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 dominates the diesel exhaust fluid market with its vast global distribution network and production facilities across major markets. The growing demand for diesel-powered commercial vehicles and machinery has propelled the need for diesel exhaust fluids to reduce tailpipe emissions. Major players are expanding their production capacities and distribution networks across developing markets in Asia Pacific and Latin America to capitalize on the high growth potential.

The stringent emission regulations implemented by governments worldwide to curb air pollution have increased the demand for diesel exhaust fluid significantly. Various countries in Europe and North America have made the use of diesel particulate filters and selective catalytic reduction compulsory, driving more vehicle owners to use exhaust fluid additives. Leading OEMs are also promoting the benefits of using exhaust fluid to clean vehicle emissions.

Global expansion of the diesel exhaust fluid industry has taken place at a fast pace over the past decade. China, India, and Brazil represent high growth regional markets where sales of commercial vehicles are rising rapidly along with mandatory norms for curbing vehicular emissions. Manufacturers are focusing on these developing economies through joint ventures with local players and direct investments in production facilities.

Market Key Trends

One of the key trends in the diesel exhaust fluid market is the development of new applications beyond EURO 4/5/6 vehicles. Traditionally, diesel exhaust fluid was majorly used in heavy commercial vehicles, buses, trucks, construction equipment, diesel generators, and ships. However, with tighter emissions controls globally, automakers are introducing SCR technology even in passenger cars. Light-duty diesel cars are now a key target segment driving theusage of exhaust fluid. Several developing markets in Asia Pacific and Central & South America are also mandating the deployment of SCR systems in various vehicle categories, propelling new opportunities.

Porter's Analysis

Threat of new entrants: Diesel exhaust fluid manufacturing requires specialized machinery and large capital investments, limiting threats of new entrants.

Bargaining power of buyers: Large fleet operators and vehicle OEMs have significant bargaining power over diesel exhaust fluid suppliers due to their bulk purchasing abilities and ability to play suppliers against each other.

Bargaining power of suppliers: raw material suppliers such as urea producers have moderate bargaining power as urea is a generic commodity chemical sold globally in bulk.

Threat of new substitutes: No close substitutes exist for diesel exhaust fluid as a passive system for reducing NOx emissions from diesel vehicle exhausts.

Competitive rivalry: The diesel exhaust fluid market is highly consolidated, with top manufacturers like Yara, BASF and Shell wielding significant market shares and influence over pricing and supply.

Geographical Regions

North America accounts for the largest share of the global diesel exhaust fluid market in terms of value, led by the U.S. where stringent EPA emission norms have made DEF systems ubiquitous in heavy-duty diesel trucks and machinery.

The Asia Pacific region excluding Japan is forecast to be the fastest growing market for diesel exhaust fluid between 2023-2030, driven by rapidly expanding diesel vehicle fleets, tightening emission regulations and increasing adoption of SCR technology in China, India and other emerging Asian economies.