Automotive Selective Catalytic Reduction (SCR) Market

Market Overview

The global automotive selective catalytic reduction (SCR) market size was valued at USD 9,465.12 million in 2022. It is projected to reach USD 25,830.82 million by 2031, growing at a CAGR of 11.8% during the projected period (2023–2031). Increases in vehicle production are expected to boost the global demand for automobile selective catalytic reduction systems.

Selective catalytic reduction (SCR) is a sophisticated method of actively controlling emissions, wherein a catalyst is used to inject a liquid-reductant agent into the exhaust stream of a diesel engine. The reducing agent commonly employed is typically automotive-grade urea, generally referred to as diesel exhaust fluid (DEF). This substance initiates a chemical reaction aimed at converting nitrogen oxide into water, nitrogen, and a negligible quantity of carbon dioxide (CO2).

Market Dynamics

Global Automotive Selective Catalytic Reduction (SCR) Market Drivers

Implementation of Emission Control Regulations by the Government

The government has implemented stringent laws to control the emission of pollutants from cars, which result from the combustion of various fuels, including diesel fuel, fuel oil, petrol, gasoline, biodiesel, and other similar substances. Euro 6 represents the most recent emission standard established by the European Union Directive, with the primary objective of mitigating the emission of detrimental gases such as nitrogen oxide, carbon monoxide, and hydrocarbons from the exhaust system of vehicles.

In a similar vein, the automobile catalyst is outfitted with catalyst converters. The emission control device transforms noxious and detrimental gases emitted by engines into less hazardous pollutants, hence facilitating compliance with governmental regulations about emissions. Therefore, the implementation of rigorous governmental rules pertaining to pollution control serves as a catalyst for the increased demand for automotive selective catalytic reduction technology, thereby driving the expansion of the global market.

Increasing Automobile Production

Developing countries have experienced an increase in both the demand for and manufacturing of automobiles. In the year 2018, the automotive industry in India experienced a yearly growth rate of 9.5%, resulting in a total of 4.2 million units, solidifying its position as the fourth-largest automotive market globally. The surge in automobile manufacturing in emerging countries has resulted in a corresponding upsurge in demand for automotive catalyst systems utilized in pollution control devices within automobile exhaust systems. Hence, it is expected that a rise in the manufacturing of automobiles will contribute to the expansion of the worldwide automotive selective catalytic reduction market.

Global Automotive Selective Catalytic Reduction (SCR) Market Restraint

Surge in the Production of Electric Vehicles

In recent times, there has been a substantial surge in both the demand for and manufacturing of electric vehicles. This can be attributed to the several advantages electric vehicles possess compared to their fuel-powered counterparts. Electric vehicles have greater economic efficiency compared to fuel-powered autos due to the absence of replacement requirements for components such as fan belts, oil, air filters, head gaskets, timing belts, cylinder heads, and spark plugs. This makes electric vehicles a preferred choice, a major restraint of fuel-powered automobile markets. This, in turn, is expected to limit the demand for automotive selective catalytic reduction technology, thereby hampering the market growth.

High Cost of Catalysts

The price of metals such as vanadium and titanium used as catalysts in automotive catalyst converters is rising. For instance, the cost of titanium increased to approximately USD 30.00 per lb. in February 2018, negatively impacting the automotive selective catalytic reduction (SCR) market. Considering such a rise in the price of automotive catalysts, manufacturers of catalytic converters may change the mixture of metals in their products, which results in the quality degradation of automotive catalyst converters. Therefore, the high cost of automotive catalysts restrains the market.

Global Automotive Selective Catalytic Reduction (SCR) Market Opportunities

Innovations in Emission Control Catalysts

Prominent stakeholders within the emission reduction technology sector are actively allocating resources towards the enhancement and advancement of catalysts. An example of a company that is actively engaged in the development of automotive catalysts is Johnson Matthey, Inc. This company is recognized as a prominent producer in the industry. Their primary focus lies in the advancement of a three-way catalyst that is intended for use in future automobiles.

The objective of this catalyst is to enhance fuel efficiency and significantly decrease carbon dioxide (CO2) emissions, particularly at lower operating temperatures. The working temperature of a three-way catalyst, which is significantly higher than 400ºC, enables it to achieve a 100% conversion efficiency in reducing automobile emissions. The introduction of novel advancements in automotive catalysts is expected to present prospective avenues for market expansion in the future.

Regional Analysis

Region-wise, the global automotive selective catalytic reduction (SCR) market is bifurcated into North America, Europe, Asia-Pacific, and LAMEA.

Asia-Pacific Dominates the Global Market

Asia-Pacific is the most significant global automotive selective catalytic reduction (SCR) market shareholder and is predicted to exhibit a CAGR of 14.9% during the projected period. Asia-Pacific includes China, Japan, India, South Korea, and the rest of Asia-Pacific, across which the automotive selective catalytic reduction (SCR) market report has been studied. Various global players, such as Faurecia and Plastic Omnium SA, having operations in Asia-Pacific, have made developments about emission control technologies, which supplement the growth of the market across Asia-Pacific. Moreover, the expansion of the vehicle selective catalytic reduction (SCR) market in Asia-Pacific is aided by government restrictions, such as UN Environment Programs, and investment from top emission control technology manufacturers. Automobile companies are forming joint ventures with manufacturers of emission control technologies for innovations and technological advancements, which significantly contribute toward the market's growth.

Europe is expected to exhibit a CAGR of 8.8% during the projected period. Europe includes Germany, France, the UK, Russia, Spain, and the rest of Europe, across which the report has been studied. Numerous regional government regulations have been implemented for emission reduction, which supplements the market's growth. The expansion of the emission control technologies market is driven by the integration of emission control technologies in vehicles, which aims to mitigate emissions from engines, as well as the implementation of stricter regulatory rules to address the issue of emissions. Moreover, the projected initiation of petitions aimed at decreasing emission control measures throughout the region is expected to enhance market growth.

North America includes the U.S., Canada, and Mexico, where the automotive selective catalytic reduction (SCR) market report has been studied. Numerous players operating across the region have carried out developments for emission reduction through vehicles, which supplement the market growth. Governments of various countries in this region are setting new rules and standards to control the emission of harmful pollutants in the ecosystem. Moreover, numerous developments and upgrades related to using better and more efficient catalysts for emission reduction drive market growth in North America.

Segmental Analysis

The global automotive selective catalytic reduction (SCR) market is segmented into components, vehicle types, and fuel types. 

By components, the global automotive SCR market is categorized into urea tanks, urea pumps, ECUs, and injectors. 

The urea tank segment dominates the global market and is predicted to register a CAGR of 10.12% during the projected period. The urea tank used in the selective reduction system for automobiles includes urea of automotive grade to begin a chemical reaction to convert nitrogen oxide into water, nitrogen, and a minute amount of carbon dioxide (CO2). In addition, leading manufacturers of emission control technologies receive contracts from customers in various regions for engineering solutions for optimized combustion systems. For instance, in March 2019, Fuel Tech, Inc. announced multiple contracts from customers in China, the US, and Europe for selective catalytic reduction (SCR). Such a rise in demand for selective catalytic reduction systems for vehicles supplements the demand for urea tanks.

The urea pump used in the emission reduction system of automobiles is used to pump the urea content to the vehicle's exhaust system to begin the chemical reaction. Automotive selective catalytic reduction system is gaining immense traction in automobiles because it reduces vehicle emissions and the mandatory government regulation implemented across the globe for emission reduction. The market growth has been boosted due to the rising need for urea pumps, which can be attributed to the rapid demand for these services in response to the growing manufacturing of vehicles.

By vehicle type, the global automotive SCR market is bifurcated into passenger vehicles and commercial vehicles.

The passenger vehicle segment owns the highest market share and is predicted to exhibit a CAGR of 11.4% during the forecast period. Passenger vehicles consist of cars that people use for personal use. They have a carrying capacity of 4–10 passengers at a time. As the global population is on the rise, the adoption of passenger cars is also increasing, which is expected to boost the growth of the global market. The passenger vehicle segment is estimated to register the highest rate, owing to its vital role in the automobile industry. Moreover, internal combustion engine-based passenger vehicles are responsible for vehicle emissions, which leads to the surge in the adoption of emission-controlling systems. An increase in the production of vehicles and the integration of better and more efficient selective catalytic reduction systems in vehicles supplement the market's growth.

Based on fuel type, the global automotive SCR market is fragmented into gasoline and diesel. 

The diesel segment dominates the global market and is predicted to grow at a CAGR of 11.4% during the forecast period. The catalytic converters for diesel engines are diesel particulate filters, diesel oxidation catalysts, and selective catalytic reduction. The diesel engine is an internal combustion device where the mechanical compression in the cylinder causes the fuel to ignite owing to the heated air. Diesel engines release dangerous pollutants into the environment. Therefore, emission control technologies like diesel particle filters and selective catalytic reduction are utilized to limit these emissions.

In addition, companies operating in the emission control technology market are focusing on developments in emission control systems for diesel engine vehicles to reduce the emission of life-threatening gases. For instance, Bosch, a German auto parts supplier, developed a new emission treatment technology for diesel engines, which is expected to reduce the emission of nitrogen oxide (NOx) to 13 milligrams per kilometer, below the legal limit of 168 milligrams per kilometer. Such innovations in the automotive catalysts for diesel engines remarkably decrease the emission of harmful gases such as nitrogen oxide (NOx), fueling the market growth for diesel engines.

Recent Developments

• November 2022- Walker® replacement selective catalytic reduction (SCR) systems announced the availability of over 1400,000 passenger cars operating in Europe, according to Tenneco's DRiVTM Motorparts division. Tenneco is a top provider of clean air technology, including SCR systems, to international producers of light- and commercial vehicles as well as machinery for rail, marine, and industrial uses.