Ethyl Tertiary Butyl Ether Market

Market Overview

Ethyl tertiary butyl ether is manufactured by the chemical acidic etherification of isobutylene with ethanol at a temperature of 30–110 degrees Celsius and a pressure of 0.8–1.3 MPa. Ethyl tertiary butyl ether also known as ETBE or ethyl tert-butyl ether, ranges from pale yellow to colorless liquid based on various concentration levels. Ethyl tertiary butyl ether is primarily used as an additive in fuels. It is used as an oxidative additive during the manufacturing of crude oil to produce gasoline.

Ethyl tertiary butyl ether is used to replace toxic and harmful compounds that are used in fuels such as lead. Furthermore, it exhibits a high octane number, low boiling point, and low vapor pressure. ETBE also finds application in various industries such as petrochemical, chemical, pharmaceutical among others. The primary demand for this market is from the petroleum industry. An increase in the demand for fuels is anticipated to create upswings for the market growth for ethyl tertiary butyl ether.

Market Dynamics

Growing Consciousness About Climate Change to Facilitate Market Growth

In the year 2015, countries from all over the globe came together to sign the historic Paris Climate treaty under the United Nations Framework Convention on Climate Change(UNFCC). It was a global agreement signed by 196 countries to mitigate the impact of climate change on the environment and to keep the increase in the global temperatures below 1.5 degrees Celsius to the pre-industrial era. To achieve the objective of this agreement, governments globally devised specific plans that are in line with the objectives of the treaty.

Countries were involved in building their commitments called the Intended Nationally Determined Contributions (INDC). Through this, each country chalked out its contribution to greenhouse gas emission reduction considering its social and environmental impact on the society at large.

The growth of the environmental pollution predicament and the various environmental laws that have set in have facilitated the demand for cleaner fuel that reduces the carbon footprint if not eliminate it. Ethyl tertiary butyl ether is an oxygenating additive that improves the overall octane rating and helps incomplete fuel combustion and reduces the pollution that is caused due to complete combustion. Countries are adopting pollution controlling measures on a war footing bypassing various regulations to reducing the carbon footprint which is expected to improve the demand for the ethyl tertiary butyl ether market in the coming years.

Automobile Industry Anticipated to Drive the Market Growth during the Assessment Period

The automobile sector is growing at an exponential rate and is one of the fastest-growing industries globally. This industry holds a substantial share in the GDP of various countries around the world. The growing consciousness among governments to decrease vehicular exhaust pollution and reduce the growth of carbon dioxide emission will further increase demand for vehicles that adhere to the emission norms and also use unleaded fuels.

Since the use of lead as a blend in fuels increases vehicular pollution thus making the environmental concerns more pronounced, there has been a demand for unleaded fuels that have ETBE as a blend in fuels. The automobile industry is one of the biggest employers globally. As per the data released by the European Commission (EU), the automobile industry employs around 14.53 million Europeans alone and contributes to around 6.8% of the European Union’s GDP.

There has been an increase in the easy availability of low-interest loans which is propelling the market growth for various new vehicles. The increase in the Purchasing Power Parity in the country’s such as China and India that are ranked second and third in the world is further snowballing the market growth for automobiles. Additionally, according to the International Organization of Motor Vehicle Manufacturers, the total number of vehicles sold in the year 2018 was around 95.3 million.

This highlights the growth potential of the automobile industry during the forecast period. The growth in the automobile industry will further propel the growth of ethyl tertiary butyl ether that is used as a fuel additive to reduce vehicular pollution and improve the combustion in vehicle engines. However, there has been a shift in the reference from fuel-based vehicles towards the electric vehicle which is anticipated to hamper the growth of the market in the longer run.

Regional Analysis

Asia-Pacific to Grow the Fastest during the Assessment Period

Asia-Pacific is undergoing a high growth rate and is the largest in terms of area and population. It has copious natural resources coupled with easy availability of labor that is low cost and this factor makes the region a propitious destination for foreign investments (FDI).

Various governments in the region are legislating various laws that make foreign investments attractive to their countries and are also increasing the share of the FDI by automatic route in various sectors. This means that companies do not need special permission to invest in a particular sector in the said country and has to only intimate the financial institution while bringing in the finance for the particular sector. Moreover, governments are setting various Special Economic Zones that have various tax breaks which are attracting foreign key players to set a foot in the various economies in the region.

The automobile sector is one of the fastest-growing sectors in Asia-Pacific with China and India leading the regional growth for this sector. China is the world leader in car manufacturing. As per Trading Economics, car sales in China increased around 12.55% on yearly basis to reach a value of 2.5 million in October 2020. There has been a spike in the sale of vans, trucks among other types of vehicles primarily because of government investments and tax breaks. Furthermore, most of the buyers opted for new vehicles that are compliant with the stricter emission norms.

Countries such as India have already kicked in the BS-6 emission norms by skipping the BS5 norms to make its emission regulation at par with developed countries. A stricter emission norm required the blend used in the fuels to be of high quality. ETBE makes it easy to reduce vehicular pollution as compared to other blends. An increase in the sale of new vehicles that are compliant with new emission norms will indirectly increase the demand for ethyl tertiary butyl ether market.