The market for dimethyl ether is expected to register a CAGR of more than 7% during the forecast period. Growing demand for DME in the chemical industry and the transportation sector and increasing applications for clean energy generation are driving the market growth. Initial capital costs are high, which may hinder the market growth.
Key Market Trends
Growing Demand for Alternative Fuel
- Dimethyl ether (DME) has been increasingly used as an alternative fuel in diesel engines and combustion cells.
- Owing to the increasing government regulations on diesel engines due to increasing pollution, DME has been considered as an alternative fuel in specially designed compression ignition diesel engines, to produce clean energy in vehicles.
- DME can be majorly blended with LPG and used for domestic cooking. The growth for such domestic applications is increasing significantly, as DME blending increases in developing countries.
- DME is different from gasoline, petroleum, and coal, as it does not contain the same harmful compounds found in other fossil fuels. It does not contain lead, has a low nitrogen dioxide content, a low particulate content, and a low carbon monoxide content.
- For instance, heavy-duty truck engines and passenger cars are replacing fossil fuels with DME, owing to its property of being a cleaner fuel. Growing concerns about environmental sustainability led the transport sector companies to launch vehicles compatible with DME.
- Increasing demand for alternative fuel applications is expected to drive the market for dimethyl ether through the coming years.
Asia-Pacific to Dominate the Market
- Asia-Pacific is expected to dominate the overall market, owing to the highly developed power generation, coupled with the continuous investments done in the region to advance the clean energy technology sector through the coming years.
- DME, being produced from bio-based products, is used as clean energy fuel in vehicles as it is not a greenhouse gas, and it has a lower viscosity and poor lubricity. Dimethyl ether is also used for cosmetical uses.
- According to the BP Statistical Review of World Energy, due to rapid industrialization, the consumption of biofuel in Asia-Pacific is growing significantly. China is the largest consumer of DME as a fuel alternative in the region.
- Growing consumer awareness of environmental issues has been increasing the applications for alternative fuel. In addition, the continuous growth in energy generation sectors is expected to drive the market for dimethyl ether through the years to come.
The dimethyl ether market is partially consolidated in nature, with few major players dominating a significant portion of the market. Some of the major companies are Royal Dutch Shell PLC, China Energy Ltd, Mitsubishi Corporation, Grillo Werke AG, and Ferrostaal GmbH, among others.
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