In the year 2021, the global market for dimethyl ether is expected to rise at a CAGR of 10% during the forecast period of 2023 to 2030. Dimethyl ether, also known as methoxymethane, wood ether, dimethyl oxide, or methyl ether, is the simplest type of ether. It is abbreviated as DME and can also be written as methyl ether. It is an odourless, somewhat narcotic, nontoxic, and easily combustible gas that can be handled like a liquid if gentle pressure is applied while the temperature is maintained at room temperature. It possesses characteristics that are comparable to those of Liquefied Petroleum Gas (LPG). Dimethyl ether is a clean energy source that may be produced from fossil fuels such as petroleum waste, coal bed methane, natural gas, and coal. Dimethyl ether can also be created from coal. The remains of plants and animals that have died are used to produce fossil fuel-based dimethyl ether, whereas bio-based dimethyl ether is produced using renewable materials such as biomass, waste, and agricultural products. These materials are first transformed into synthetic gas, also known as syngas, before being used to produce DME.
The growing demand for dimethyl ether in a variety of applications, such as LPG blending, transportation fuel, power plant fuel, chemical feedstock, and others, is providing significant revenue benefits to companies operating in the global dimethyl ether market. The expansion of the global market is being driven in large part by the growing awareness among various end-use industries regarding the benefits of dimethyl ether. It is anticipated that the increasing rate of adoption of dimethyl ether, as well as the expanding number of LPG plants, will be beneficial to the market for dimethyl ether. These factors will help satisfy the increasing need for energy brought on by a growing population. In addition, it is anticipated that the market will expand as a consequence of the ongoing expansion of the automobile sector as well as the shift toward clean energy fuels among manufacturers. The market for dimethyl ether is anticipated to gain from a trend toward products that are less harmful and of higher quality, which is indicative of rising customer tastes as well as growing concerns regarding the environment.
One of the Most Notable Trends Involving Alternatives to Conventional Diesel Fuel
Currently, when the world is searching for innovative solutions to the growing problem of global pollution and the health problems it causes, decarbonizing the transportation industry is an absolute must. Therefore, to have a variety of ultra-low-carbon or carbon-negative fuels that are plausible, cost-effective, and long-term alternatives for the fossil fuels that are used today and that can be generated from several different waste streams.
An alternative to petroleum diesel that is low in cost, low in carbon emissions, and produces no soot is dimethyl ether gasoline. DME is not only an efficient hydrogen transporter, but it also has a low cost, which makes it very easy to provide this eco-friendly fuel to the fast-growing market of hydrogen fuel cell vehicles. In addition to this, when the product is coupled with propane, it will considerably reduce the carbon intensity of propane, which is a fuel that burns cleanly and is extensively utilised.
Because of its high cetane number and efficient ignition, DME can be used in diesel engines in place of conventional diesel fuel. This is due to the fact that DME has a strong ignition efficiency. On the other hand, in comparison to diesel fuel, its viscosity and lubricity are both significantly lower. In gasoline-powered vehicles, it is maintained in a liquid form under low pressure, in a manner analogous to that of LPG. This helps to restrict the number of alterations that are necessary to be made to the engine. Despite this, there are a few tweaks that need to be made to the engine, the most significant of which involve the injection pump and the installation of a pressure tank that is analogous to those used for LPG. Elastomers that are appropriate must also be utilised on the gasoline line. The combustion of DME prevents the formation of soot, which enables it to be injected into a diesel engine with just minimal adjustments required.
Due to the high cetane number of 55 to 60 that DME possesses, it is possible to utilise it as a fuel for diesel engines. The production of the DME engine and car is finished, and the reliability of the vehicle has been certified by a road running a test that was at least 100,000 kilometres long. A great number of automobiles of this type are produced in Japan, including the ISUZU ERGAmio, the ISU Elf, the Mitsubishi Fuso Canter, and the NISSAN DIESEL Condor.
Increasing Demand in the Automotive Industry Is a Key Driver of the Dimethyl Ether Market
The rising demand for automobiles is one of the primary drivers of the dimethyl ether market. As a direct consequence of this, a significant number of companies and manufacturers are moving in the direction of using fuel of a higher grade in their vehicles. As a result of this, new opportunities for expansion will become available. The automotive industry is progressively utilising dimethyl ether in hybrid automobiles. It is anticipated that this will stimulate demand for dimethyl ether all around the world. As a result of the search for substitutes for crossover cars being conducted by a select number of automobile manufacturers all over the world, there has been a precipitous rise in the demand for diesel as well as bio-diesel. The demand for dimethyl ether, which is used in the production of biofuels, is expected to increase as more national governments lend their support to initiatives that aim to fulfil energy requirements using renewable sources. As a consequence of this, major players who operate in the global market for dimethyl ether are anticipated to gain a large amount of profit from the biofuel business.
The Establishment of Regulations and Standards Could Stifle Market Growth
It is anticipated that the International Organization for Standardization will publish international rules for the application of DME. In China, businesses that are involved in the production, mixing, and marketing of the product are doing scientific studies in partnership with producers of valves, seals, and cylinders in order to get closer to establishing a unified standard for LPG and blends. The next required step toward market expansion and the development of globally recognised safety and handling procedures is the passage of formal legislation that regulates the cylinder, storage, and percentages of this product that can be used in those blends. This is an essential step in the process.
The Ever-Increasing Demand from Automotive Industry Generates New Revenue Streams
In diesel engines that use compression ignition, an alternative fuel known as dimethyl ether (DME), which is also known as methoxy methane, is utilised. It is a fuel that does not produce toxic by-products and has a high cetane value. The most important factor propelling growth in the market for dimethyl ether is the rising demand for automobiles. As a direct consequence of this, a significant number of companies and manufacturers are moving in the direction of using fuel of a higher grade in their vehicles. This, in turn, will create new opportunities for growth and expansion.
Dimethyl ether is being utilised in hybrid automobiles by the automotive industry at an ever-increasing rate. It is anticipated that this will contribute to the expansion of the global market for dimethyl ether. As a result of the search for substitutes for crossover cars being conducted by a select number of automobile manufacturers all over the world, there has been a precipitous rise in the demand for diesel as well as bio-diesel. The demand for dimethyl ether, which is used in the production of biofuels, is expected to increase as the government continues to lend its support to initiatives that aim to fulfil energy requirements using renewable sources. As a consequence of this, major players who operate in the global market for dimethyl ether are anticipated to gain a large amount of profit from the biofuel business.
Opportunities for Asia-Pacific Manufacturers to Generate Potentially Profitable Sales
Because raw materials are readily available in Asia and the Pacific at prices that are competitive, this region holds a dominant position in the global market for dimethyl ether. On the global market for dimethyl ether, the most lucrative country to do business in is China. It is anticipated that this region will be able to generate significant revenues over the course of the next few years as a result of the growing use of dimethyl ether in a wide variety of applications, including the blending of LPG, the propellant for aerosols, and transportation fuel, amongst others. Dimethyl ether is a good option that can be used as an energy fuel, and it is anticipated that in the coming years it will provide profitable growth prospects for the market. Because of the stringent environmental regulations that have been placed on the transportation and power industries, the market for dimethyl ether is expected to have significant development potential in the near future. China is the first country in the world to provide dimethyl ether mixed LPG to the commercial market. The majority of the demand for dimethyl ether in China comes from residential consumption.
Methanol Is Expected to Continue to Be the Primary Raw Material
Methonal contributed the largest revenue share among the raw material segment in 2021. During the forecast period, it is anticipated that the methanol sector will account for a significant portion of the market for dimethyl ether. This high demand is a reflection of how straightforward it is to produce DME by making use of methanol as the primary component in the production process. In addition, the production of DME from methanol is a technology that is both simple and economical. Because of the pollution that is caused by the production of DME using coal as raw material, the expansion of the market is being negatively impacted. A significant amount of capital is required for the manufacturing of DME from natural gas.
Fossil Fuel-Based Segment to Dominate the Market In terms of Revenues and Growth
It is anticipated that the fossil fuel-based segment will grow at a CAGR of 11% during the forecast period of 2023 to 2030 due to the significant availability of recoverable coal and natural gas reserves, both of which can be utilised in the production of DME. This segment held a revenue share of approximately 90% in 2021. In addition, dimethyl ether is utilised in a wide variety of applications, such as aerosol propellants, LPG blending, transportation fuel, and other industrial applications, such as blowing agents utilised in insulation panels and refrigerants, fuel utilised in welding and cutting, and as an extracting agent for solvents. Additionally, the easy availability of natural gas as a consequence of technological improvements, which are related to large R&D spending in the oil and gas industry, would support the market for fossil fuel-based dimethyl ether in achieving promising increases by the year 2030.
The Blending of LPG was the Market Segment That Brought in The Most Revenue In 2020
In 2021, the LPG blending segment was responsible for more than 50% of the revenue share. One of the primary forces that is driving the market sales of dimethyl ether in LPG blending, particularly in China, is the growing awareness of the need to cut down on hazardous emissions. The use of liquid petroleum gas (LPG) for domestic heating and cooking has been a significant contributor to the presence of harmful pollutants in the environment. Blending LPG with DME, which is added to a volume concentration of 15% to 20% and is a feasible option to add value to LPG that is used for home purposes, is one way to lower this since it can reduce the amount of carbon monoxide produced.
Transportation to be the Fastest Growing Market During the Forecast Period
Through 2030, it is anticipated that the transportation fuel segment will increase at a CAGR of approximately 13.5% during the forecast period. This segment held the largest revenue share of about 35% in 2021. Due to the fact that its cetane number and ignition point are comparable to those of traditional transportation fuels, DME is not only more favourable to the environment but also more cost-effective. As a result of the presence of soot, particulate materials, and other pollutants in the environment, which are mostly caused by diesel vehicles, greenhouse gas emissions are increasing; consequently, regional regulatory agencies are pushing the use of DME as an alternative transportation fuel. At the moment, increasing dependence on LPG imports in a variety of countries is primarily responsible for driving the demand for DME. The market for DME is additionally propelled by the fact that it has a diverse range of uses and a number of different avenues of production. Due to the abundance of coal throughout Asia and the Pacific, the majority of DME produced there is derived from coal. Additionally, this drives the market, which results in China becoming the most important market for DME.
Asia-Pacific is a Clear Global Leader with More than 90% of Revenue Share
The Asia-Pacific region is the most important market for DME, accounting for a significant revenue share of 92% in 2021. The market patterns of dimethyl ether (DME) and the various raw materials used for its manufacturing are continuously witnessing an upward trend. This is primarily due to the increase in the usage of DME in various applications such as LPG blending, aerosol propellant, transportation fuel, and other applications. In terms of both volume and value, China is the most dominant nation both in the Asia-Pacific region and the rest of the world whereas Japan is home to numerous manufacturing plants.
China is the first country in the world to provide dimethyl ether mixed LPG to the commercial market. The majority of the demand for dimethyl ether in China comes from residential consumption. In October 2020, the Minister of Science and Technology and Earth Sciences of India introduced a specialised burner unit for the use of dimethyl ether blended LPG as a home cooking fuel as part of the "Aditi UrjaSanch" initiative. LPG that has been combined with 30% dimethyl ether is going to be the fuel source for the new burners. The Government of India has stated that another 10 million LPG recipients will be added to the Pradhan Mantri Ujjwala Yojana scheme during the fiscal year 2021-22. This scheme provides free LPG cooking gas connections to women from below-poverty-line families, which will result in higher demand for LPG within the nation. The nation is attempting to significantly expand the use of dimethyl ether in order to minimise its reliance on LPG. It is anticipated that this will boost the dimethyl ether sector during the forecast period.
Trinidad and Tobago, production units can also be found in North America, Indonesia, and Uzbekistan; considerable additional capacity expansions are either anticipated or already being developed at these locations. The transportation, agricultural, and construction industries in North America are ideal candidates for the deployment of this technology. DME can be produced by a variety of processes, any one of which can result in a product that is not only highly competitive but also much more cost-effective than conventional diesel.
When the product is created from biogas utilising the Oberon method, it is certified as a green fuel in accordance with the Renewable Fuels Standard established by the United States Environmental Protection Agency. As a result, it is eligible for RINs credits. Both the American Society for Testing and Materials International (ASTM International) and the International Organization for Standardization (ISO) have contributed specifications. Sweden hosts the very first bio DME manufacturing in the world.
The European market is quite mature in terms of volume, and it is anticipated that it will see the lowest CAGR of 8% during the forecast period of 2023 to 2030. The imposition of rigorous limits on high-emission fuels in Europe is the primary factor driving the requirement to find alternatives to conventional fuels such as diesel. For instance, the European Commission has enacted emission limits as a component of the EU framework for the approval of light- and heavy-duty vehicles. These regulations are part of the EU framework for the approval of cars. In Europe, regulatory agencies are actively supporting the use of cleaner transportation fuels in an effort to realise the goal of sustainable mobility. During the forecast period, it is anticipated that both Latin America and the Middle East and Africa would demonstrate consistent development. The expansion can be attributed to a number of government efforts aimed at boosting the utilisation of environmentally friendly fuel in residential settings as well as expanding its application in the chemical sector.
Major Players Dominating the Market
The worldwide market is consolidated due to the fact that only a few companies control a substantial portion of it. Jiutai Energy Group (China), HaldorTopsoe, Oberon fuels (United States), CF Industries Holdings, Royal Dutch Shell Plc. (The Netherlands), The Chemours Company (United States), Mitsubishi Corporation (Japan), and Toyo Engineering Corporation. Grillo-Werke AG, Korea Gas Corporation, Shenhua Ningxia Coal Industry Group Co., Oberon Fuels, Inc., Fuel DME Production Co., Ltd., Mitsubishi Corporation, China Energy Ltd., Guangdong JOVO Group Co., Akzo Nobel NV, Ltd., and The Chemours Company are just a few of the major companies that are active in the dimethyl ether industry currently. The primary market participants are focusing on the expansion of product lines and increasing their production capabilities. For example, Oberon Fuels began commercial production of renewable DME in the United States in June 2021. In order to preserve product consistency and broaden their regional reach, major industry players have consolidated their raw material manufacturing and delivery operations. This affords them a financial advantage in the form of cost savings, which subsequently enables them to raise their margin of profit.
Historical & Forecast Period
This study report represents analysis of each segment from 2022 to 2032 considering 2023 as the base year. Compounded Annual Growth Rate (CAGR) for each of the respective segments estimated for the forecast period of 2024 to 2032.
The current report comprises of quantitative market estimations for each micro market for every geographical region and qualitative market analysis such as micro and macro environment analysis, market trends, competitive intelligence, segment analysis, porters five force model, top winning strategies, top investment markets, emerging trends and technological analysis, case studies, strategic conclusions and recommendations and other key market insights.
Research Methodology
The complete research study was conducted in three phases, namely: secondary research, primary research, and expert panel review. key data point that enables the estimation of Dimethyl Ether market are as follows:
Market forecast was performed through proprietary software that analyzes various qualitative and quantitative factors. Growth rate and CAGR were estimated through intensive secondary and primary research. Data triangulation across various data points provides accuracy across various analyzed market segments in the report. Application of both top down and bottom-up approach for validation of market estimation assures logical, methodical and mathematical consistency of the quantitative data.
| ATTRIBUTE | DETAILS |
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| Research Period | 2022-2032 |
| Base Year | 2023 |
| Forecast Period | 2024-2032 |
| Historical Year | 2022 |
| Unit | USD Million |
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Region Segment (2022-2032; US$ Million)
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Key questions answered in this report
