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The global automotive selective catalytic reduction (SCR) market size was USD 7.83 billion in 2019 and is projected to reach USD 11.60 billion by 2027, exhibiting a CAGR of 10.8% during the forecast period.
The purpose of an SCR system is to lessen NOx (nitrogen oxide) emissions from the engine as they are extremely harmful to the environment and human health. SCR is an after-treatment technology that is used to manage emissions from the engine. To complete this process, SCR catalysts are injected with a certain amount of diesel exhaust fluid (DEF) into the exhaust stream of a diesel engine. The catalyst in it decomposes and evaporates to form carbon dioxide and ammonia with the help of a urea solution. Ammonia (NH3), the desired product, is formed by this process and converts NOx into water (H2O) and harmless nitrogen (N2). This urea solution is known by various names such as AdBlue in Europe, Diesel Exhaust Fluid or DEF in the US, and in Brazil as ARLA-32.
Forced Closure of Automotive Plants amid COVID-19 Pandemic to Result in Market Slowdown
The impact of the COVID-19 crisis has been severe on the automobile industry. Most of the automakers in various regions including Europe have halted sales and production activities. The pandemic has forced several automakers to close their plants and has halted the supply chains in the automotive industry, severely impacting the selective catalytic reduction market growth. To support the smooth and swift restart of the automobile industry, the ACEA (the European Automobile Manufacturers Association) and the CLEPA (the European Automotive Suppliers Association) have conjointly implemented the Business Code of Conduct. This code contains safety and health regulations that are to be followed in the workplace, contractual supply rules, well-timed communication networks, and synchronization of the entire restart process. All these factors are likely to propel the growth of the automotive industry and benefit this market.
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Fuel Efficiency and Engine Downsizing to Drive Market Growth
Several auto manufacturers are investing in research and development to advance SCR systems and enhance the fuel-efficiency of vehicles. The demand for fuel efficiency in vehicles is also growing among the consumers, leading to rising market penetration of SCR systems. The trend of downsizing of engines will also help the market to gain traction in the forthcoming years, as smaller engines reduce the weight of the vehicle and thus make it more fuel-efficient. For example, an SCR system increases the fuel-efficiency of a vehicle by 1.22%, according to SCR system manufacturers. All these factors are likely to increase the demand for SCR technology over the forecast period.
Stringent Government Emission Regulations to Stoke Demand for SCR Systems
Governments around the world have been implementing strict regulations to control vehicle pollutant emissions from the combustion of diesel and gasoline. For instance, the United States has implemented strict rules from March 2020 that diesel engines are required to meet certain NOx emission standards such as 40.4 mpg and 202 g/mile of CO2. The CO2 emission standards have been increasing by 1.5% year-on-year to comply with the CAFE (Corporate Average Fuel Economy) regulations. Thus, stringent regulations governing emission standards are expected to force carmakers to install selective catalytic reduction systems in vehicles, which in turn will boost the SCR market growth.
Increasing Automobile Production to Promote Market Growth
The production and sale of automobiles in developing nations are growing at an astonishing pace. According to the International Organization of Motor Vehicle Manufacturers, Brazil has witnessed an increase in automobile production by 2.2% in 2019, reaching 2.9 million units. This rising automotive production in developing countries has led to a surge in the demand for the increased production of emission control devices in vehicle exhaust systems. Therefore, the increasing production of and demand for vehicles is fueling the selective catalytic reduction market growth.
High Cost and Increasing Adoption of Electric Vehicles to Hinder Growth
The high cost of automotive SCR technology along with a lack of emission regulations in developing countries is a major hindrance in the growth of this market. Many automobile manufacturers are seeking alternative emission control technologies for vehicles. This may also hamper the growth of this market. Furthermore, the rising adoption of electric vehicles worldwide and the government incentives and subsidies to purchase these vehicles are also obstructing the global market growth. For instance, according to the International Energy Agency (IEA), sales of electric cars accounted for 2.6 percent of global car sales, with 2.1 million electric cars getting sold in 2019. All these factors are likely to disrupt the growth trajectory of the selective catalyst reduction market.
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Passenger Car Segment to Hold the Largest Market Share
Based on vehicle type, the market is segmented into passenger cars, light commercial vehicles, and heavy commercial vehicles. The passenger car segment is expected to dominate the selective catalyst reduction market share owing to the widespread presence of passenger cars on roads around the world.
However, the light commercial vehicle segment is also expected to show exponential growth in the market over the forecast period owing to the rising number of off-road activities such as trekking, race, sports, etc.
The heavy commercial vehicle segment is also likely to experience good growth owing to the stringent emission regulations on these diesel engine-powered vehicles.
Copper Zeolite Segment to Command Market Share
Based on catalyst type, the market is segmented into copper zeolite, iron zeolite, and others (vanadium, titanium, etc.). The copper zeolite segment accounts for the major share in the global market owing to its capability to operate at high temperatures ranging from 180 degree Celsius to 600 degree Celsius along with a superior efficiency to convert nitrogen oxide.
The iron zeolite segment is also expected to show good growth in the market over the forecast period owing to its superior properties such as high thermal stability coupled with control over wider operation conditions.
The others segment is also likely to experience steady growth in the market.
Asia Pacific Automotive Selective Catalytic Reduction Market Size, 2019 (USD Billion)
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The market size in Asia-Pacific stood at USD 3.00 billion in 2019. The region occupies a dominant position in the SCR market share owing to the mounting demand for passenger cars in this region. This factor is complemented by the rising disposable incomes of consumers in this region. Also, stringent rules for vehicular emissions in this region are leading to the growth of this market. For instance, in China, light commercial vehicles are mandated to improve exhaust gas recirculation and increase the PM and NOx aftermarket devices as emission standards have been tightened over the past few years.
It is expected that the automotive SCR market in North America will show good growth owing to the increasing usage of light commercial vehicles for off-road activities coupled with stringent emission regulations in this region.
Europe will also exhibit substantial growth as the European Union (EU) has strict rules for emission standards for vehicles as per the EURO engine standards. This is expected to be the most important factor in the growth of the SCR market in this region. Furthermore, the latest advancements in the SCR systems in this region will also augment the growth of this market during the forecast period. For instance, Volkswagen’s latest SCR technology is estimated to reduce NOx emissions by 80%. Thus, by utilizing SCR systems in vehicles, the overall air pollution levels can be reduced by a noticeable margin.
Tenneco Inc. is the Top Player in the Market
Tenneco Inc. is a leading global manufacturer, designer, and marketer of automobile products for the aftermarket and the original equipment manufacturers. Its four business groups – Ride Performance, Motor parts, Powertrain, and Clean Air – serve customers worldwide with advanced technology solutions.
Another key player is Faurecia, who is a global leader in automotive technologies. It has four strategic business groups – Faurecia Interiors, Faurecia Seating, Faurecia Clean Mobility, and Faurecia Clarion Electronics – that provide pioneering solutions to challenges facing the automotive industry.
An Infographic Representation of Automotive Selective Catalytic Reduction (SCR) Market
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The automotive selective catalytic reduction market report provides a detailed analysis of the market and focuses on key aspects such as leading companies, product types, and leading applications of the product. Besides this, the report offers insights into the current market trends and highlights key industry developments. In addition to the factors above, the report encompasses several factors that have contributed to the growth of the market over recent years.
Value (USD Billion) & Volume (Million units)
By Vehicle Type
By Catalyst Type
Fortune Business Insights says that the global market size was USD 7.83 billion in 2019 and is projected to reach USD 11.60 billion by 2027.
In 2019, the Asia Pacific market value stood at USD 3.00 billion.
The market is projected to grow at a CAGR of 10.8% and will exhibit decent growth in the forecast period (2020-2027).
The light commercial vehicle segment is expected to be the leading segment in this market during the forecast period.
Stringent government emission regulations are expected to propel market growth.
Robert Bosch GmbH and Tenneco Inc. are the leading players in the global market.
Asia Pacific dominated the market share in 2019.
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