Dimethyl Ether Market Size, Share & COVID-19 Impact Analysis, By Application (LPG Blending, Aerosol Propellant, Transportation Fuel, and Others), and Regional Forecast, 2021-2028

The global dimethyl ether market size was USD 4,001.89 million in 2020 and is projected to grow from USD 4,363.9 million in 2021 to USD 8,755.17 million in 2028 at a CAGR of 10.5% during the 2021-2028 period. The sudden rise in CAGR is attributable to this market’s demand and growth, returning to pre-pandemic levels once the pandemic is over. The global impact of COVID-19 has been unprecedented and staggering, with dimethyl ether witnessing a negative demand shock across all regions amid the pandemic. Based on our analysis, the global market exhibited a decline of 2.76% in 2020 as compared to the average year-on-year growth during 2017-2019.

The simplest ether is dimethyl ether (abbreviated as DME), also known as methoxymethane, wood ether, dimethyl oxide, or methyl ether. It is a colorless, mildly narcotic, nontoxic, easily flammable gas that can be treated as a liquid when gently pressurized at room temperature. It has properties that are similar to Liquefied Petroleum Gas (LPG).

China produces the bulk of the world's products, while Japan has manufacturing plants. Production plants are also located in Trinidad and Tobago, North America, Indonesia, and Uzbekistan, with significant new capacity expansions expected or under development. Sweden is home to the world's first bio DME factory.

COVID-19 Pandemic: Shortage of Oil & Gas May Hamper DME Production

The energy industry, especially oil, is one of the most critical facets of the global economy. The coronavirus occurrence in China in December 2019 and the gradual expansion of the disease dramatically decreased crude oil demand and price. People are encouraged to "sit at home" and avoid travel due to the spike in COVID cases. Since corona limits all modes of mobility, oil use in the transportation field is expected to plummet. Furthermore, restrictions on manufacturing and economic operations have resulted in lower fuel usage.

According to ETEnergyworld, the Corona effect, which includes comprehensive lockdown in oil-consuming economies, is projected to reduce global oil production by 15-20 million barrels per day (mbpd). The world's top oil consumers, like the United States, are dealing with the outbreak of corona. Oil production in the United States could fall to 12.5 million barrels per day (MBPD) in 2019, representing about 8% of global oil consumption; this could be enough to satisfy the combined oil needs of Mexico, Indonesia, the United Kingdom, France, and Thailand. Thus, the decline in oil consumption would, in turn, decline the dimethyl ether consumption.

DIMETHYL ETHER MARKET TRENDS

Substitute for Conventional Diesel Fuel is a Prominent Trend

Decarbonizing the transportation industry is a must as the world searches for creative ways to address the rising challenge of global pollution and associated health issues. Thus to have a range of ultra-low-carbon or carbon-negative fuels that are realistic, cost-effective, and long-term substitutes for today's fossil fuels that can be made from several waste streams.

Dimethyl ether gasoline is a low-cost, low-carbon, and zero-soot option for petroleum diesel. DME is also a cost-effective hydrogen transporter, making it simple to supply this green fuel to the rapidly expanding hydrogen fuel cell vehicle industry. In addition, when combined with propane, the product will significantly minimize the carbon intensity of this widely used, clean-burning fuel.

DME can be used in diesel engines as a replacement for traditional diesel fuel because of its good ignition efficiency and high cetane number. On the other hand, it has a lower viscosity and lubricity than diesel fuel. It is kept in a liquid state under low pressure, similar to LPG for gasoline engines. This helps to limit the number of modifications required to the engine. Even so, some minor engine modifications are needed, most notably the injection pump and the installation of a pressure tank similar to that used for LPG. Relevant elastomers must also be used on the fuel line. DME can be pumped into a diesel engine with only minor modifications, and its combustion avoids the accumulation of soot.

DME can be used as a diesel engine fuel due to its high cetane number of 55 to 60. DME engine and vehicle production are complete, and the vehicle's reliability has been validated by a 100,000 km or longer road running test. Many such vehicles are manufactured in Japan, such as ISUZU ERGAmio, ISUZU Elf, Mitsubishi Fuso Canter, and NISSAN DIESEL Condor.

DIMETHYL ETHER MARKET GROWTH FACTORS

Demand for Blended DME & Substituted with LPG across the Globe to Aid Growth

DME has various uses, including aerosol, propellant, chemical feedstock, transportation gasoline, and refrigerant. The blending of liquefied petroleum gas (LPG) has emerged as a significant application in recent years. LPG shortage is, indeed, a hazard. It is also a suitable replacement for LPG because of its low toxicity, high cetane number, and good flammability. DME can also be made from various raw materials, including methanol, wood, and syngas, allowing for increased production and demand. LPG is combined with the product in China and used for cooking and other domestic and industrial applications.

Companies such as Topsoe, Mitsubishi, and Total are focusing their attention on promoting DME as a modern and renewable synthetic fuel due to its excellent combustion properties, which can be used to replace liquefied petroleum gas (LPG) or blended into a fuel mixture. It is a gas at average temperatures and pressures, but it can be liquefied at moderate pressure.

Similar to LPG, DME can be used for cooking and heating. Dimethyl ether’s resemblance to LPG and ease of processing from various feedstocks create several prospects for the ultra-clean fuel's arrival in new markets around the world as an LPG alternative.

DME can be mixed with LPG and used for cooking and heating in the home. As blending becomes more common within the vast and growing LPG industry, especially in developing countries where portable (bottled) fuel provides a cooler, healthier, and more environmentally benign fuel for cooking and heating, its use for such domestic applications is growing rapidly.

DME's use as an alternative energy source has widespread interest in various countries, with initiatives in China, Egypt, India, Indonesia, Japan, Korea, Uzbekistan, and Vietnam either ongoing or expected. The market for "greener" energy sources in developing economies has sparked interest in blends containing products made from renewable feedstock.

RESTRAINING FACTORS

Regulations & Standards May Hamper the Market Growth

The International Organization for Standardization is expected to issue international guidelines on the use of DME. Scientific research is being undertaken by companies engaged in the manufacturing, mixing, and distribution of the product in China, in collaboration with manufacturers of valves, seals, and cylinders, to move closer to a single standard for LPG and blends.

Formal legislation regulating the cylinder, storage, and percentages of this product that can be used in those blends are a required next step toward market growth and the development of globally recognized safety and handling procedures.

DIMETHYL ETHER MARKET SEGMENTATION ANALYSIS

By Application Analysis

LPG Blending Segment to Hold a Significant Share Due to Wide Usage in Household Industry

By application, the market is segmented into LPG blending, aerosol propellant, transportation fuel, and others. LPG blending is the major segment of the dimethyl market. DME provides various paths to renewable and zero-emission fuels for a variety of uses, thanks to its quiet, sootless combustion, ultra-low emissions, high cetane, low-cost LPG-compatible equipment and logistics, and high energy density. DME is an organic compound commonly used as an aerosol propellant and a reagent in the manufacture of common compounds such as dimethyl sulfate, acetic acid, ammonium nitrate, ammonium phosphate, and ammonia production which is further used as nitrogen fertilizer in the fertilizer industry.

Natural gas, biomass, waste from pulp and paper plants, forest products, agricultural by-products, construction waste, and devoted fuel crops like switchgrass are only a few of DME's plentiful sources. It may also be derived directly from synthesis gas produced by coal or biomass gasification, or natural gas reforming. Among the various processes for chemical conversion of natural gas, direct synthesis is the most efficient.

As a green refrigerant, dimethyl ether can be used. Indeed, it has a significantly smaller global warming risk than chlorofluorocarbons and has no ozone depletion potential.

REGIONAL DIMETHYL ETHER MARKET ANALYSIS

The market size in Asia Pacific stood at USD 3,194.17 million in 2020. The region dominated the global market due to an exponential growth in countries such as China and India. Dimethyl ether is a non-toxic, green fuel that burns cleanly. Its high cetane value, low combustion, and low-cost fueling system make it an impressive, low-cost diesel option that complies with stringent emissions regulations.

DME has been used as an energy source in China, Japan, Korea, Egypt, and Brazil for decades. It can be generated domestically from many feedstocks, including biogas from municipal or agricultural waste, and natural gas. The shipping, agriculture, and construction industries are perfect applications in North America. DME can be made from a range of options that can make it highly competitive if not significantly more affordable than traditional diesel.

When made from biogas using the Oberon process, the product is certified as a green fuel under the United States Environmental Protection Agency's Renewable Fuels Standard, rendering it suitable for RINs credits. ASTM International and the International Organization for Standardization have both provided specifications.

Europe is another significant market due to the robust growth in the automotive industry across European countries. Also, the usage of dimethyl ether in households boosts the development to drive the market. The Middle East & Africa, and Latin America are expected to showcase steady growth during the forecast period. The growth is owed to several government initiatives to increase the usage of clean household fuel and increasing use for the chemical industry.

KEY INDUSTRY PLAYERS

Key Companies to Conduct Research and Development Activities to Strengthen Their Presence

With a few players capturing a significant share, the global market is fragmented in nature. Jiutai Energy Group (China), Haldor Topsoe, Oberon fuels (U.S.), CF Industries Holdings, Royal Dutch Shell Plc. (The Netherlands), The Chemours Company (U.S.), Mitsubishi Corporation (Japan), Toyo Engineering Corporation are some of the market's key players. Major industry players have combined their raw material manufacturing and delivery operations in order to maintain product consistency and expand regional reach. This provides them with a financial benefit in cost savings, allowing them to increase their profit margin.

To ensure supply, federal government agencies, particularly the Department of Energy, should invest heavily in a variety of parallel pathways for renewable and synthetic fuel production. Rather than waiting decades for grid infrastructure improvements, the US should pursue available decarbonization efforts using alternative fuels like propane and DME.

From 2030, Indonesia will no longer need to import LPG because it will be able to generate sufficiently dimethyl ether, or DME, a replacement for the fuel.

LIST OF KEY COMPANIES PROFILED IN DIMETHYL ETHER MARKET:

• Jiutai Energy Group (China)


• Haldor Topsoe


• Oberon fuels (U.S.)


• Royal Dutch Shell Plc. (The Netherlands)


• The Chemours Company (U.S.),


• Mitsubishi Corporation (Japan)


• Toyo Engineering Corporation


• Other Key Players

KEY INDUSTRY DEVELOPMENTS:

• In June 2021, Oberon Fuels started the commercial production of renewable dimethyl ether (rDME). The company is the first and only producer of this ultra-low carbon fuel at the commercial scale.


• In August 2020, Oberon Fuels producer of the renewable dimethyl ether (rDME) transportation fuel expanded its team to produce the first renewable Dimethyl Ether (DME).


• In May 2020, Air products, a top producer of industrial gases, and Haldor Topsoe,  a global producer of high performance catalysts and property technology for chemical industries announced the signing of a global alliance agreement. The companies are anticipated to use their broad market reach for developing projects and amalgamation of proficiency in large-scale methanol, ammonia, and/or dimethyl ether plants to be developed at global level.

REPORT COVERAGE

The market research report provides a detailed analysis of the market and focuses on crucial aspects such as leading companies, products, and products. Also, it offers insights into dimethyl ether market trends and highlights vital industry developments. In addition to the factors mentioned above, the report encompasses various factors that have contributed to the market's growth in recent years. This report includes historical data & forecasts revenue growth at global, regional, and country levels, and analyzes the industry's latest market dynamics and opportunities.

Report Scope & Segmentation