Vapor Recovery Unit Market Size, Share & Trends Analysis Report By Type (Carbon Adsorption, Membrane Separation, Condensation by Refrigeration), By Applications (Processing, Storage, Transportation, Others), By Component (Compressors, Pumps, Piping, Instrumentation and control system), By End-User (Oil and Gas, Petrochemical, Chemical, Food, Pharmaceutical, Others) and By Region(North America, Europe, APAC, Middle East and Africa, LATAM) Forecasts, 2024-2032

Market Overview

The global vapor recovery unit market size was valued at USD 832.17 million in 2023. It is estimated to reach USD 1,296.51 million by 2032, growing at a CAGR of 5.05% during the forecast period (2024–2032). The global vapor recovery unit market is primarily driven by the growing demand for these units from the oil and gas industry. The growing demand for oil and gas has increased its production, which is estimated to drive global market growth. Moreover, VRUs help lower VOCs and other harmful emissions, which is further expected to drive demand as industries need to comply with several stringent regulations set forth by international organizations. Furthermore, technological advancements and innovations in VRUs are expected to create market expansion opportunities.

A vapor recovery unit (VRU) is a specialized technology that captures and recovers vapors generated during diverse industrial operations, specifically within the oil and gas sector. These vapors generally consist of volatile organic compounds (VOCs), which can have detrimental effects on the environment when discharged into the atmosphere. The main purpose of a vapor recovery unit is to gather these vapors and either reintegrate them into the process or properly eliminate them.

VRUs comprise different elements, such as vapor collection devices, compressors, condensers, and storage vessels. These elements collaborate to capture, compress, and recycle or dispose of the reclaimed vapors. By implementing vapor recovery units, enterprises may ensure compliance with environmental standards while minimizing emissions and reducing their carbon footprint.

Highlights

• Transportation dominates the application segment
• Oil and gas dominate the end-user segment
• North America is the highest shareholder in the global market

Market Dynamics

Global vapor recovery unit market drivers

Rising oil and gas demand and production

VRUs, or Vapor Recovery Units, are extensively utilized by the oil and gas sector to extract vapors from storage tanks containing crude oil, natural gas, and refined products. These units are also employed in transportation and processing facilities. The increasing worldwide demand and production of oil and gas, particularly from emerging economies like China, India, and Brazil, is anticipated to enhance the expansion of the VRU market.

According to Research Nester, the worldwide gas demand is projected to increase by 140 billion cubic meters between 2021 and 2025. The International Energy Agency (IEA) predicted that the worldwide oil demand will reach 101.7 million barrels per day (mb/d) in 2023, representing a 2.3 mb/d increase compared to the previous year. Therefore, the substantial demand for oil and gas, as well as increased production, is projected to propel the expansion of the global market.

Stringent environmental regulations for voc emission control

Volatile organic compounds are significant contributors to air pollution. They undergo reactions with other pollutants, resulting in the formation of ozone and smog. These harmful substances can lead to respiratory and cardiovascular ailments and contribute to climate change.

In order to decrease the release of volatile organic compounds (VOCs), numerous governments and organizations have enforced stringent laws and criteria, including the Clean Air Act (CAA) in the United States, the Industrial Emissions Directive (IED) in the European Union, and the National Ambient Air Quality Standards in the United States. These regulations mandate using VRUs or other emission control devices in industries that release VOCs, including oil and gas, petrochemical, chemical, and other sectors. This is anticipated to stimulate the market demand for Virtual Reality Units (VRUs).

Global vapor recovery unit market restraint

High cost of installation and maintenance

A significant obstacle the VRU market encounters is the high expenses associated with installing and maintaining the units. Several aspects, including the device's dimensions, capability, technology, and purpose, determine the price of a VRU. As per research from the US Environmental Protection Agency (EPA), the initial investment required for a VRU varies between USD 50,000 and USD 500,000, while the yearly expenses for operation and maintenance fall within the range of USD 5,000 to USD 50,000.

Moreover, the VRUs necessitate periodic examination, cleansing, and substituting components, such as valves, seals, pumps, and filters, to guarantee their utmost efficiency and avert any leakage and corrosion. These problems contribute to the overall expenses of owning and operating VRUs, impeding their market acceptance.

Global vapor recovery unit market opportunities

Technological advancements and innovation

The VRU market presents abundant opportunities for technological progress and creativity as manufacturers consistently strive to provide novel and enhanced solutions that cater to the evolving demands and preferences of customers and regulatory requirements. Recent advancements in the VRU market encompass the implementation of dry pump technology, eradicating the need for oil or water as a sealant, thereby minimizing contamination and the need for vapor disposal.

Additionally, introducing smart VRUs equipped with sensors, controllers, and software enables the monitoring and optimization of unit performance and efficiency. Lastly, the advent of modular VRUs facilitates effortless installation, transportation, and customization of the unit. These advancements are anticipated to improve the efficiency, dependability, and financial viability of the VRUs while opening up new opportunities for market expansion.

Regional Analysis

North america dominates the global market

Based on region, the global vapor recovery unit market is bifurcated into North America, Europe, Asia-Pacific, Latin America, and the Middle East and Africa.

North America is the most significant global vapor recovery unit market shareholder and is expected to expand substantially during the forecast period. The North American region is projected to dominate the market for VRUs due to the well-developed and advanced oil and gas industry, particularly in the United States and Canada. These countries contribute significantly to global oil and gas production and consumption. The region also exhibits a notable propensity for embracing cutting-edge and inventive technologies, such as the dry pump and the smart VRU, that augment the effectiveness and productivity of the VRUs.

Furthermore, prominent manufacturers such as AEREON, John Zink, and ZEECO are stimulating the manufacturing and distribution of vapor recovery system units (VRUs). Furthermore, the 2011 EPA regulation has mandated increased volatile organic compound (VOC) emissions recovery. As a result, this has created a new market opportunity for VRU makers. Consequently, several influential international businesses with headquarters outside the United States are expanding their operations within the country. It is anticipated that a rise in oil prices by 2019 will additionally stimulate VRU sales in the region, given that the United States holds a dominant position in the market for vapor recovery services. Several influential firms in the vapor recovery services industry are strategizing to broaden their operations in the U.S. market. Therefore, it is projected that O&M service operations will experience significant expansion in the North American vapor recovery service market.

Asia-Pacific is projected to experience the most rapid market growth for VRUs, primarily because of the fast expansion of the oil and gas industry, particularly in China, India, and Southeast Asia. These countries are experiencing a significant increase in both the demand for and production of oil and gas. According to the IEA, India's projected total oil demand is expected to reach 6.64 million barrels per day (bpd) by 2030, compared to 5.48 million bpd in 2023. According to government figures, the demand predictions appear to encompass internal demand and fuel exports, considering that the country's current domestic oil consumption is less than 5 million bpd. Similarly. as per a report by the IEA, India is projected to become the primary contributor to the worldwide increase in oil demand between 2023 and 2030, slightly surpassing China.

Moreover, the Supreme Court of India has mandated that retail petroleum stores in cities with a population above 10 lakh and monthly sales beyond 300 KL must implement the Vapour Recovery System (VRS) mechanism. This task must be completed within the specified timeframe outlined in the circular issued by the Central Pollution Control Board on June 4, 2021. Therefore, implementing favorable regulatory rules will stimulate the regional market's growth.

Segmental Analysis

The global vapor recovery unit market is bifurcated into type, application, and end-user.

Based on type, the global vapor recovery unit market is segmented into condensation by refrigeration, carbon adsorption, and membrane separation.  

The Membrane Separation section utilizes a thin, porous, and selective membrane to separate vapors from a gas stream based on their molecular size, shape, or affinity. This method is appropriate for vapors with high permeability and low pressure, such as methane, ethane, and nitrogen. This technology has several benefits, including its cost-effectiveness, energy efficiency, and adaptable design. The drawbacks include the substantial initial investment, limited efficiency in reclaiming resources, and the possibility of membrane fouling and degradation.

Based on application, the global vapor recovery unit market is segmented into processing, storage, transportation, and others. 

The transportation segment owns the highest market share. The transportation segment is projected to have significant expansion due to its involvement in retrieving vapors emitted during the loading and unloading of trucks, ships, and pipelines. This sector is subject to stringent emission laws. The transportation sector is projected to experience substantial expansion due to its involvement in retrieving vapors with low volume and low pressure.

Based on end-users, the global vapor recovery unit market is bifurcated into oil and gas, petrochemical, chemical, food, pharmaceutical, and others. 

The oil and gas segment dominate the global market. A Vapor Recovery Unit (VRU) is essential in the oil and gas industry since it captures and processes vapors generated during different operations, particularly in producing, storing, and transporting hydrocarbons. The oil and gas market is dominant due to this industry's high demand for VRUs. This is driven by the increasing demand and production of oil and gas and the strict environmental laws for controlling VOC emissions.

Moreover, VRUs can offer economic advantages to oil and gas firms while ensuring regulatory compliance and conserving resources. Companies can enhance their profitability by reclaiming and capitalizing on vapors that would otherwise be discarded, creating supplementary income sources.

Recent Developments

• July 2023- SCS Technologies (SCS), a prominent supplier of CO2 compression and measurement systems, methane vapor recovery units, and petroleum LACT units, unveiled its new Strategy & Innovation Office at the Ion, situated in Houston's innovation center.
• October 2023- Flogistix, a prominent company specializing in vapor recovery and methane reduction solutions, confirmed its participation in the Abu Dhabi International Petroleum and Exhibition Conference (ADIPEC).