Market Overview
Isobutanol is expected to perceive significant demand as an alternative to conventional fuel. The high demand of the product is attributed to its increasing adoption as an alternative for ethanol in gasoline. It is widely used in the production of isobutyl acetate. The isobutanol market is driven by wide acceptance in the various consumer product industries, such as food processing industry and lacquer.
On the basis of type, the isobutanol market is classified as synthetic and bio-based. Synthetic was the largest segment in the market in 2017. This is owing to the growing environmental and toxicity concerns coupled with high rate of commercialization of bio-isobutanol at cheaper prices. Additionally, synthetic type is also extensively being used in renewable jet fuels that provide low carbon footprints and cleaner burning.
Based on application, the isobutanol market is categorized into oil and gas, paint and coating, cosmetics, food processing, de-icing fluids, textile and others. Oil and gas is expected to witness the highest growth owing growing demand for high performance as well as clean fuel is expected to drive this segment over the forecast period. Apart from this, ongoing surge in strengthening infrastructural development projects in tier2 and tier3 cities in developing countries such as India and China are expected to boost the demand of paints and coatings, which in-turn are expected to boost the market growth during the forecast period.
Market Dynamics
Drivers
Isobutanol is widely used in the production of isobutyl acetate. The demand for isobutyl acetate is growing, owing to its acceptance in the various consumer product industries, such as food processing industry and lacquer. In the recent years, the demand of isobutyl acetate has also increased from paint and coating industries, owing to the stringent regulation towards the production of environment friendly paint and coating, mainly in western countries. The rising demand of isobutyl acetate is expected to boost the isobutanol market during the forecast period.
Emergence of the product as a platform chemical for producing isobutyl esters has also helped in market penetration. Intrinsic properties associated with these such as medium volatility and limited miscibility is expected to positively impact isobutanol market growth in coming years.
Restraints
The stringent government regulation towards the use of isobutyl acetate in food processing and cosmetics, owing to the toxic properties, is the most dominant restrain for the growth the isobutanol market. For instance, in 2009, Government of Canada has restricted the use of this product in cosmetics, due to the toxicity of lethal dose at 50%.
Opportunities
The development of bio-isobutanol is expected to provide lucrative growth opportunities to the isobutanol market during the forecast period. Bio-isobutanol is a cost-effective alternative to the product and serves as an excellent bio-based fuels which helps to lower carbon alternative. Additionally, new product development in the market is the key competitive advantage among the major players. Developed markets of North America and Europe are characterized by shifting consumer preference towards environmental friendly products and stringent regulatory framework for manufacturing various petrochemicals. This is forming another opportunistic factor to the market growth.
Insights by geography
Regionally, Asia-Pacific is the largest region in the isobutanol market, attributed to the demand of the product from food processing and paints and coating industry in this region. The surging urbanization and strengthening infrastructural project in tier II and tier III cities of India and China has boosted the market growth in this region. Additionally, Asia-Pacific is still the fastest growing market, attributed to the high demand for automotive paints and coating from China, India, and South-East Asian countries.
North America followed Asia-Pacific, with thriving demand for a variety of chemicals, bio-fuels, and paints and coatings from countries such the U.S and Canada.
Competitive Landscape
Some of the major companies operating in the global isobutanol market include the Dow Chemical Company, BASF SE, Eastman Chemical Company, Saudi Butanol Company, Andra Petrochemicals Limited, Oxea GmbH, Fitesa Simpsonville Inc., Grupa Azoty S.A., Mitsubishi Chemical Corporation, and Toray Industries Inc.
