How are Governmental Legislations in Various Countries Helping AdBlue Businesses Prosper Globally?

Highlights:  

• Introduction 
• Reasons behind the rising sale of diesel exhaust fluid 
• Growth of the industry in North America and India
• Product launches by major companies in the industry

Chemical compounds and performance-enhancing fluids are frequently used in automobiles to increase their efficiency. On the other hand, certain fluids are developed to reduce the air pollution caused by these automobiles. AdBlue is one such fluid which reduces vehicular pollution caused by emissions from diesel engines. Also called diesel exhaust fluid (DEF), it is an aqueous solution with a chemical composition of 67.5% deionized water and 32.5% urea.

The main aim of using diesel exhaust fluid is to kickstart a selective catalytic reduction (SCR) reaction; this reaction brings down the amount of nitrogen oxides in vehicular emissions, thereby curbing atmospheric pollution. For this, this unique fluid is put directly in the vehicle’s modified exhaust. The vehicle uses DEF as per the rate of combustion of fuel, but generally one liter of AdBlue is used for around 500 kms.

Why is the popularity of Diesel Exhaust Fluid (DEF) growing with each passing year?

Environmental studies in the 1980s showed that air pollution caused by emissions from automobiles was one of the highest contributors to global warming. As a result, the Rio Summit of 1992 placed considerable responsibility on the shoulders of the governments, private companies, and civil societies to bring down vehicular pollution. Consequent ecological studies have shown that reducing vehicular air pollution by 50% was vital for limiting the rise in global temperatures to 1.5-degrees Celsius. These studies forced many governments to enact laws to curb vehicular emissions. Such laws have mandated the use of chemicals like diesel exhaust fluid.

For instance, in the US, the Environmental Protection Agency (USEPA) put down various regulations in 2007 that indirectly mandated the use of DEF for diesel engines. Similarly, in 2014, the European Emissions Standards ‘Euro 6’ led to increased adoption of diesel exhaust fluid in light passenger and commercial vehicles. Apart from governmental restrictions, certain European countries have even offered subsidies and tax incentives for promoting the use of these fluids.

The role of North America and India in the expansion of the AdBlue industry

The North America region accounted for the highest market share in the AdBlue industry in 2022. In 2016, the Environmental Protection Agency and National Highway Traffic Safety Administration jointly formulated the Phase 2 Greenhouse Gas Emission Standards. These standards are applicable from MY 2019-2027. These standards have imposed stricter restrictions on vehicular emissions, thus increasing the sales of diesel exhaust fluid. Furthermore, the state of California has enacted laws which are much more stringent than federal laws; as a result, almost all diesel vehicles in this state use DEF.

However, these regional trends might change in the future in favor of the Asia-Pacific region. The growth in demand for diesel exhaust fluid in India is expected to play a major role in the rise of this domain in Asia-Pacific. In fact, the industry in India is projected to surge ahead at a CAGR of 8.6%, thereby being the fastest-growing country in the domain. The rapid pace of urbanization and industrialization in India has led to a massive rise in automobile sales, both passenger vehicles and commercial vehicles. This, along with stringent government laws, has led to a jump in demand for these exhaust fluids.

How have novel product launches played a role in strengthening the position of the industry?

Along with governments, the private sector, too, has played a positive role in widening the scope of the diesel exhaust fuel industry. Numerous products have been launched by several companies, thus creating a competitive spirit in the industry. For instance, in May 2023, GreenChem, a leading chemical manufacturer and distributor in the US, announced the launch of Effinox. A SCR cleaner, Effinox is designed to clean the urea deposits in automobile’s SCR systems caused by poor hydrolyzation of DEF and prevent its redeposition. The company has claimed that this chemical increases the efficiency of DEF and reduces NOx emissions drastically.

In a similar product launch, in November 2023, Fertiberia, a major chemical manufacturing firm, announced the launch of DEF for maritime transport. The company has already launched this chemical for commercial and passenger car fleets. Fertiberia issued a statement after the product launch that it will help the company to achieve the aim of reducing emissions caused by the maritime sector.

To summarize, the rise in demand for diesel exhaust fluids is on account of growing support from governments across the globe. While some countries have enacted stringent laws on vehicular emissions, others have subsidized the use of these chemicals which has helped the AdBlue industry to flourish. Furthermore, the growth of the industry in North America and India will widen the scope of the industry considerably.

For suggestions and recommendations on how to capitalize on the opportunities offered by the industry, feel free to contact us

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