The global isobutanol market size was estimated to be around 800 kilo tons in 2023, and it is projected to grow at a CAGR of 3% during 2024-2036. Isobutanol, also known as isobutyl alcohol, is a colorless, chemical compound with various industrial applications, including as a solvent, fuel additive, and feedstock for the production of chemicals. It is produced by the carbonylation of propylene. Isobutanol is used as a direct solvent for various applications such as adhesives, surface coatings, and pharmaceuticals. Isobutanol also acts as chemical intermediate for producing chemicals like isobutyl acrylate, isobutyl acetate, and isobutyl methacrylate.
In 2023, the global production capacity for isobutanol was estimated to over 1000 kilotons. Since isobutanol is often produced alongside n-butanol, production facilities for both are typically integrated. The majority of isobutanol production capacity is concentrated in the Asia-Pacific, North America, and Western Europe regions. Leading manufacturers in the isobutanol market include PetroChina, BASF, Gevo, Sibur, OXEA, Tianjin Soda Plant, SIBUR-Khimprom, LG Chem and Luxi Chemicals.
In the Western Europe region, there are three Isobutanol manufacturers with BASF operating a 45 kilotons plant in Ludwigshafen, Germany, while OXEA operates a 15 kilotons plant in Oberhausen.
Russia is the major producer of Isobutanol in the Central & Eastern Europe. The country uses a different technology to produce Isobutanol, independently of n-butanol. Russian producers such as Gazprom Neftekhim Salavat and ANKhK are the sole producers in the country, producing Isobutanol for the Asia Pacific region.
Asia Pacific is the largest region accounting for more than 60% of the global Isobutanol demand. The demand will be driven by plasticizer production in China and as a fuel additive in North America.
The demand for Isobutanol in Western Europe was estimated to be around 45 kilotons in 2022. The main application for isobutanol is in solvents. Major producers of isobutyl acetate in Western Europe include BASF, INEOS, and OXEA. Demand in Western Europe is expected to grow around 1.5% as the market is relatively mature.
Isobutanol is widely used in the coating industry as it prevents eroding of certain coatings when they are dried under humid conditions. It is commonly used as a diluent in cellulose nitrate lacquers which helps in improving the flow, gloss and resistance to blushing. Isobutanol has relatively low volatility, which means it evaporates slowly compared to other solvents which makes it useful in applications where a slower evaporation rate is desirable, such as in the formulation of coatings and adhesives. Isobutanol is considered a more environmentally friendly solvent option compared to some other volatile organic compounds (VOCs) and has a lower potential for contributing to air pollution and smog formation.
Isobutanol can be blended with gasoline as an oxygenate, improving octane ratings and reducing emissions. The push for cleaner-burning fuels has driven the demand for isobutanol in this application.
When used as a fuel additive or blended with gasoline, isobutanol has the potential to reduce greenhouse gas emissions and air pollutants compared to traditional gasoline. It can contribute to cleaner-burning fuels, which aligns with environmental regulations and sustainability goals.
Isobutanol is manufactured via the carbonylation of propene. The raw materials used for manufacturing Isobutanol are derived from crude oil. The price fluctuation of crude oil hinders the price of Isobutanol raw materials which will also impact the Isobutanol market. In recent years, there has been an increase in the price volatility of crude oil and because of this uncertainty in the crude oil process, the prices of Isobutanol also increase. This, the volatility in the crude oil prices is expected to be a significant challenge in the Isobutanol market during the forecast period.
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