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Valued at $26.3 million in 2018, the global levulinic acid market is expected to generate revenue of $34.5 million by 2024, demonstrating a CAGR of 4.9% during the forecast period (2019–2024).
Geographically, North America generated the highest demand for levulinic acid in 2018 and is expected to continue leading the levulinic acid market in the coming years, on account of the increasing demand for the chemical for use in application areas, such as fuel additives, cosmetics, and agricultural products. With the rise in environmental concerns in the North American region, stringent regulations for herbicides and pesticides are expected to be implemented. Since levulinic acid is a bio-based additive and can be used in these agricultural products owing to its ability to prevent pest infestation and enhance crop production, its demand is expected to rise with increased focus on bio-based products in agricultural applications.
Dynamics of Levulinic Acid Market
The large-scale commercialization of the chemical is expected to drive the growth of the levulinic acid market during the forecast period. The market is currently at a nascent stage, with few players manufacturing the product and operating at significantly high costs. With the expected commercialization of levulinic acid on a large scale, production costs are likely to get lowered. This, in turn, would result in economies of scale, thereby attracting more manufacturers to the market. Moreover, the manufacturing of levulinic acid from biomass substrates leads to the formation of commercially viable end-products, such as lignin waste, furfural, and formic acid. Such factors are expected to provide a financial incentive to manufacturers and help stimulate the development of large-scale biorefineries, thereby boosting the production of levulinic acid and its derivatives in the near future.
Levulinic Acid Market Segmentation Analysis
On the basis of technology, Biofine held the larger share in the levulinic acid market in 2018. This can be attributed to the higher adoption of the technology, as levulinic acid production through the Biofine process does not involve the use of microorganisms for the fermentation of monomers. In addition, the adoption of the Biofine technology allows for the use of a wider range of heterogeneous lignocellulosic resources, which, in turn, leads to the production of several levulinic acid derivatives.
Based on application, the fuel additives category held the largest share in the levulinic acid market in 2018. Moreover, the category is expected to dominate the market during the forecast period as well, on account of the growing adoption of levulinic acid derivatives as fuel additives. For instance, ethyl levulinate, an ester of levulinic acid, holds a high potential to be used as a blend component in diesel formulations. The blending of ethyl levulinate in diesel results in lower sulfur emissions. Moreover, with the expected shift toward organic and bio-based fuel additives in view of the growing environmental concerns, the demand for levulinic acid is expected to rise in the coming years.
Geographical Analysis of Levulinic Acid Market
Globally, the North American region generated the highest demand for levulinic acid in 2018. The levulinic acid market in the region is majorly driven by the high-volume adoption of the bio-based product for applications, including fuel additives, personal care products, and food additives, in the U.S. and Canada. Besides, its derivative ethyl levulinate is gaining traction as an additive in the agriculture industry.
Competitive Landscape of Levulinic Acid Market
The global levulinic acid market is highly consolidated in nature, with few players operating on a commercial scale. Some of the key players in the market are GFBiochemicals Ltd., Hefei TNJ Chemical Industry Co. Ltd., Heroy Chemical Industry Co. Ltd., and Haihang Industry Co. Ltd. Chinese levulinic acid manufacturers have a significant impact on the global market, as they have a strong export network in the North American, European, and APAC regions. Moreover, the market, in view of the increasing demand for bio-based products in developed nations, is expected to generate ample growth opportunities for both existing players and new entrants in the coming years.
Recent Strategic Developments of Major Levulinic Acid Market Players
Key players in the global levulinic acid market are working toward increasing their production capacity. For instance, in March 2017, GFBiochemicals Ltd. entered into a joint venture with American Process Inc. (API) for the establishment of an integrated biorefinery in the U.S., with a production capacity of 50–200 thousand tons per annum. The strategic move was taken by the company to scale up its production of levulinic acid.
Key Questions Answered in the Report