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Dimethyl Ether (DME) Market - Asia Pacific is a major market for DME | Mitsubishi Corporation, Oberon Fuels, Inc., Shenhua Ningxia Coal Industry Group Co., Ltd., Fuel DME Production Co., Ltd., and Grillo-Werke AG

12-06-2018 12:39 PM CET | Business, Economy, Finances, Banking & Insurance

Press release from: TMR Research

Dimethyl Ether (DME) Market - Asia Pacific is a major market

Majority of the DME manufactured these days is an end-product of two-step process where the first step involves methanol generation with the help of natural gas or coal being used a feedstock. And the second step involves dehydration of methanol for the production of DME. Dimethyl Ether has the potential of replacing diesel in the conventional engines with small modifications that need to be made in the fuel injecting systems. The market potential of DME as a fuel for transport is huge as consumption of diesel in growing at a great pace because of the boom in the transportation sector.

Among the variety of applications of DME, blending of LPG is considered to be the biggest market for dimethyl ether. Scarcity of LPG is a great cause of concern in the nations that have small gas reserves and thus have a very limited options of using natural gas instead of LPG. DME has proven to be a trustworthy source in such nations to cut down their imports of LPG by combining a prescribed amount of dimethyl ether in LPG without altering the current infrastructure. DME can also be used as a propellant of aerosol under the category of liquefied gas propellants. The numerous other applications of DME includes its utilization in the form of solvent, refrigerant, chemical feedstock, and for brazing and welding operations. Some of the prominent companies in the global DME market include names such as Azko Nobel N.V., Mitsubishi Corporation, Jiutai Energy Group, and Zagros Petrochemical Company among others.

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Global Dimethyl Ether (DME) Market: Overview

Dimethyl ether (DME), also known as methoxymethane, is the simplest ether which has widespread applications in chemicals industry and is extensively used as aerosol propellant. DME can be produced using a variety of feedstock such as biomass, methanol, and fossil fuels. The most prominent feedstock are natural gas, particularly in North America, or coal, especially in various Asian countries. The compound has several properties similar to LPG and is therefore extensively used as an excellent substitute for traditional fuels. In addition, various characteristic fuel properties of DME, particularly high cetane number and energy efficiency, make it attractive to be used in several diesel engines. Other popular applications of DME are as transportation fuel, power generation fuel, and domestic gas, thus it forms a crucial element stimulating the growth of transportation, agriculture, and construction industries.

The largest producer and consumer of DME is China, where it is produced commercially. In countries such as in Japan, Korea, Egypt, and Brazil, DME has been a key energy source for decades.

Global Dimethyl Ether (DME) Market: Trends

The widespread use of dimethyl ether as a non-petroleum based alternative fuel is propelling the market. Since it is considered as a clean and high-performance compression ignition fuel, it can be extensively used in diesel engines; its use eliminates particulate exhaust emissions of automobiles and can significantly save the high cost of diesel particulate filters. This has spurred the demand for DME across transportation sector, especially in the North America.

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Most frequently, DME is blended with LPG, usually in equal proportion, to be used in domestic cooking and heating applications. Currently, more than 65% DME produced globally is blended with LPG. Blending offers many benefits in terms of its use as ultra-clean fuel for several domestic applications. China has upped the production of DME blended with LPG by using methanol as feedstock; commercial production of DME has helped China reduce the reliance on LPG-based fuel. Dehydrating methanol enhances the combustion efficiency of DME and hence is used as cost-effective fuel alternatives in heavy-duty trucks and ships. These trends are offering lucrative avenues for the market players to capitalize on.

Global Dimethyl Ether (DME) Market: Market Potential

Concurrent applications of DME as transportation fuel in several regions such as in Europe, Japan, and North America, portend well for the market. The use of DME, either standalone or blended with LPG, is proliferating in large number of automobiles in industrialized nations as they are considered as cleaner energy. This has in turn increasingly reduced the dependency on LPG to fuel their economies. Various performance evaluation plans are underway, especially in North America, to assess the viability of DME as alternative fuel in large commercial vehicles and urban fleets. Producers of DME source the raw materials from natural organic waste found in urban landfills, which is expected to considerably reduce the carbon footprint in the coming years. Led by these promising developments, Oberon Fuels, a producer of the Dimethyl Ether (DME) fuel, has recently announced the start of a customer demonstration of a Pinnacle-series heavy duty trucks from Mack Trucks. Oberon has partnered with the American truck manufacturing company and they are working with the NYC Department of Sanitation (DSNY) to test the vehicle operation at the Fresh Kills Landfill to evaluate fuel performance and viability. If this drives become successful, DME will expectedly reduce GHC emissions by as much as 80% by 2050. Initiatives such as these expand the potential of the market in developed and emerging nations.

Global Dimethyl Ether (DME) Market: Regional Outlook

Currently, Asia Pacific is a major market for DME where it is primarily used for blending with LPG and as aerosol propellant. Advancement in infrastructure for providing domestic fuel supply to several Asian countries coupled with the surge in demand for cost-effective, clean, and alternative fuels in transportation sector have stimulated the use of DME fuels. Increasing R&D activities related to DME production in advanced nations of Asia Pacific along with increasing production capacity in Japan and China are anticipated to boost the regional market.

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North America market is poised to show impressive growth over the forecast period. The increasing adoption of bio-based fuel in automobiles and continued improvements in vehicular emission technology have led to the wide demand for DME as a viable alternative. Increasing R&D investment by several automobile manufacturers have contributed to the growth momentum.

Global Dimethyl Ether (DME) Market: Competitive Analysis

Key automakers and fuel producers are making substantial investments in various programs meant for evaluating the viability of DME as a cost-effective and environmental-friendly fuel. Out of large number of companies exploring lucrative avenues in the DME market, major players include Akzo Nobel NV, Korea Gas Corporation, China Energy Ltd., Royal Dutch Shell plc, Mitsubishi Corporation, Oberon Fuels, Inc., Shenhua Ningxia Coal Industry Group Co., Ltd., Fuel DME Production Co., Ltd., and Grillo-Werke AG.

About Us:
TMR Research is a premier provider of customized market research and consulting services to business entities keen on succeeding in today’s supercharged economic climate. Armed with an experienced, dedicated, and dynamic team of analysts, we are redefining the way our clients’ conduct business by providing them with authoritative and trusted research studies in tune with the latest methodologies and market trends.

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