The global Diesel Exhaust Fluid market size was estimated to be around 16,700 kilo tons in 2023, with projections indicating it will double during the forecast period, registering a CAGR of 6% between 2024-2036. The strong growth in DEF market can be attributed to its increasing importance in reducing the environmental impact of diesel engines, particularly in heavy-duty and industrial sectors.
Diesel Exhaust Fluid (DEF), marketed as AdBlue. Nox Doser or AUS 32 in some regions, is a non-toxic, aqueous urea solution consisting of around 67.5% deionized water and 32.5% solution of Automotive grade urea. DEF has emerged as an important solution for reducing harmful Nitrogen Oxide (NOx) and particulate emissions from diesel engines.
DEF is utilized in Selective Catalytic Reduction (SCR) systems to control NOx emissions in diesel engines. By injecting DEF into the exhaust stream, the solution chemically reacts with NOx gases to convert them into nitrogen gas and water vapor—harmless byproducts that are then safely released into the atmosphere. This transformation is achieved through a catalytic process that effectively lowers the harmful impact of diesel exhaust on air quality.
The global DEF capacity was estimated to be over 20,000 kilo tons in 2023, and it has grown by an average 1200 kilo tons per year since 2016. In the longer-term forecast period, DEF capacity is projected to reach 44,000 kilo tons (including speculative capacity) with majority of capacity addition expected in Asia Pacific, Europe and North America primarily driven by increasing emissions regulations. IFFCO (Krinir Industries), Kelas Environmental Protection Technology Co.,Ltd (Lopal), Sichuan Meifeng Blue, Yara International, and Iowa Fertilizer Company are the major DEF producers in the world. Yara International is one the largest DEF producer in the world with total installed capacity of over 2800 kilo tons in North America, and Western Europe.
The global DEF market is poised for register a CAGR of 6.5% during the short-term forecast, to cross 26,000 kilo tons while during the long-term forecast DEF market is projected to reach 38,500 kilo tons.
In 2023, Asia Pacific and North America together accounted for around 65% of the global Diesel Exhaust Fluid market. Asia Pacific and North America are estimated to continue its dominance during the forecast period. Western Europe currently accounts for less than 30% of the global Diesel Exhaust Fluid demand and it is projected to witness growth of 3.6% during the forecast period. Germany, France, and Spain are projected to witness strong growth while Diesel Exhaust Fluid market in the Netherlands, Belgium, Austria and United Kingdom is expected to grow between 2-3%. North America, Europe, and China remain the most attractive markets on the back of their high diesel vehicle usage, and industrial sectors reliant on diesel-powered machinery.
The global DEF demand is mainly driven by regulatory mandates, growing emphasis on sustainable practices and advancement in technologies
In the United States, European Union, and China, government agencies have implemented stringent emission standards to reduce the environmental impact of diesel engines. Regulations mandating the replacement of aging diesel vehicles, particularly heavy-duty trucks, are fueling DEF demand. Compliance requirements for NOx reduction have led manufacturers to integrate SCR systems in their engines, ensuring compatibility with DEF.
In addition to emission standards, government has also incentivized the replacement of older vehicles. Heavy-duty trucks are a major target for these policies. Fleet modernization efforts across the transportation, agriculture, and construction sectors require DEF-compatible engines to meet compliance, thereby driving demand in these industries.
The Diesel Exhaust Fluid capacity in India has grown from 100 kilo tons to the current level of 1300 kilo tons. IFFCO (Krinir Industries), Velvex (Nandan Petrochem), Gulf Oil Lubricants, Indian Oil, and Apar Industries are some of the key players in India DEF market. Velvex and IFFCO together hold over 50% of the total DEF capacity in India.
In 2021, Gulf Oil Lubricants added DEF production capacity of 18,000 kilo litters at its facility in Chennai. Currently, company has 75,000 kilo litters of in-house DEF manufacturing capacity, with an additional capacity of around 279,000 kilo litters across India at 13 satellite plants.
Between 2017-2021, India has witnessed strong growth in Adblue demand of on the back of stringent environment regulations. Bharat Stage IV (BS4) (Euro 4) level regulation were implemented in 2017, while Bharat Stage VI (BS6) (Euro 6) level regulation were implemented in 2020. India skipped Bharat Stage V (BS5) (Euro 5) regulations.
The country’s DEF demand has tripled in last four years as the country introduced Bharat 6 standards for vehicle emission control. Most of the demand in the country was by the HCV segment. Around 60% of the newly registered heavy vehicles in India are equipped with SCR units. LCV and Passenger cars consumed around 40% of total Diesel Exhaust Fluid demand in India
In India, diesel powered passenger cars and LCV with engine capacity higher than 2000 CC are equipped with SCR units. Vehicles with lower engine capacity are generally equipped with EGR or LNT systems for NOx after treatment. India is the largest manufacturer of Tractors. India is one the largest Tractor manufacturer, however most of the tractors manufactured in the country have power output of less than 55 hp. Tractors with lower power output are equipped with systems like EGR or LNT for NOx reduction. Only 5% of the tractors manufactured in India were equipped with SCR systems.
In India, all major OEMs opted SCR system in 2017 for trucks except Ashok Leyland. Ashok Leyland is a leading commercial vehicles and buses producer in India. The company opted iEGR (intelligent exhaust gas recirculation) technology instead of SCR. A decade ago, the company introduced SCR in compatible trucks in specific markets. However, it was not viable to be introduced all over the country due to some challenges such as cost, sourcing of urea, inconsistent performance, etc.
The DEF demand in India is poised to register fastest growth during the forecast period driven by growing automotive industry and huge investment in the agriculture sector.
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