A greener option petrochemicals

A greener option to petrochemicals

8:01 AM, 22nd December 2016
A greener option to petrochemicals
Oleochemicals are chemicals derived from naturally occurring feedstock material such as plant, vegetable oil and animal fats that are similar to petrochemicals derived from petroleum.

The natural resources for fuel generation are fast depleting giving rise to an urgent need to share the burden of global petrochemical demands with renewable energy sources. Amidst various researches happening globally, oleochemicals are rising as a potential fuel alternative in the industry.

By Debarati Das

With growing urbanisation, the demand for petrochemicals is on the rise. On the other hand, oil fields will eventually reach a point where they will dry up. Moreover, concerns regarding energy security and environment degradation continue to bother us. Amidst the rising concerns, there are several attempts to find an energy source, which is not just imperishable but also environment friendly. Among various researches, oleochemical has come up as a potential alternative.

Oleochemicals are chemicals derived from naturally occurring feedstock material such as plant, vegetable oil and animal fats that are similar to petrochemicals derived from petroleum. They are basically fatty acids and glycerol derived from the splitting of the triglyceride structures of oils and fats. Fatty acids, fatty alcohols and glycerin are some of the major types of oleochemicals. According to researches, fatty acid was the largest product segment in 2014 and it accounted for over 54 percent share of the total market.

Oleochemicals have found a wide range of applications and can be effectively used in a number of industries like pharmaceutical, personal care products, food & beverages, soaps & detergents and polymers.

They can also be used in lubricants and greases, textile, rubber, drying oil, paints & coating, surface coatings, biodiesel, plastics, among many others. Today, polyamide and polyols are also being manufactured using oleochemical advanced routes which are used in producing polyurethane, a major raw material for fabric industry.

Personal care, and soap & detergents segment dominate the global oleochemicals market. And while food and beverages application is also a fast-growing segment, pharmaceutical too is among the largest application segment for oleochemicals market.

The current price volatility of petrochemicals has shifted the industry’s focus towards developing bio-based products. An overall demand for environment friendly products too has accelerated the demand for green and sustainable chemicals hence enhancing the acceptance of oleochemicals. The industry is also witnessing a dramatic upsurge in bio-based products in particular industries such as soaps & detergents, pharmaceuticals, food and beverage and personal care.

All this has led to the growth of the oleochemicals market. Rapidly increasing demand for glycerin in food & beverage industry is also expected to drive the demand for oleochemicals market. The rise in the global awareness of the toxic emissions from petrochemicals is expected to further help oleochemicals penetrate the market on account of its biodegradable and renewable raw materials.

However, feedstock cost and variable prices of raw materials in the industry are the major roadblocks in the growth of oleochemicals market.

Market Dynamics

According to Zion Research’s analysis, the global demand for oleochemicals market was valued at $21.25 billion in 2014. This industry is expected to reach $29.50 billion by 2020, growing at a CAGR of slightly above 5.5 percent between 2015 and 2020.

Geographically, Asia-Pacific is the largest consumer and producer of oleochemicals and accounted for over 65 percent share of the oleochemicals market in 2014. Asia Pacific is also the fastest growing market in the global oleochemicals such as glycerin, fatty acids and fatty alcohols.

Emerging economies such as India, China and Brazil is also expected to drive the demand for oleochemicals due to the rapidly expanding end-use industries such as food & beverages, personal care and pharmaceuticals in these regions.

Availability of key raw material in abundance in Malaysia, China, Indonesia and Thailand will have a positive influence on the market growth. Europe holds the second largest market share in global oleochemicals market followed by North America. According to Grand View Research, European oleochemicals demand is expected to grow at an estimated CAGR of 4.1 percent from 2014 to 2020.

Indian avenues

According to reports, the Indian growth story of oleochemicals is equally promising with the oleochemicals market projected to witness growth at a CAGR of over 5 percent between 2015 and 2020. India has a huge dependency on petrochemical imports, which is adversely affecting the economy. However, given the massive growth charted by end-user industries such as plastics, polymers, pharmaceuticals etc, the need for petrochemicals has to be met.

Hence, an alternative is a much-needed requirement. Oleochemicals have seen a consistent growth in India over the last five years as it not just complies with the growing stringent government policies and regulations regarding environment protection, but also its wide range of end-use applications.

The polymers industry too has picked up momentum in the country and with this, the usage of polyurethane is also rising further making way for oleochemicals. Easy access and availability of raw materials, cost effectiveness and growing inclination towards greener chemicals are also the major factors fueling the market growth of oleochemicals in India.

Exhausting our natural resources will be the biggest mistake of mankind. However, tapping ways to a better and greener future is the way to go.

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