Asia-Pacific Butanol Market - Forecast(2023 - 2028)

Asia-Pacific Butanol Market Overview

Asia-Pacific Butanol Market size is forecasted to reach a value of US$9.5 billion by the end of 2027 after growing at a CAGR of 5.4% during the forecast period 2022-2027. Butanol has the formula C4H9OH and is a four-carbon alcohol. Bio-based Butanol is often manufactured using the acetone-butanol-ethanol (ABE) fermentation process. Butanol has several advantages over ethanol and methanol as a biofuel due to its lower vapor pressure, lower hydrophilicity and higher energy density, owing to which its market demand is being spurred. The growth can also be attributed to the increasing demand for paint thinners, coating resins, lubricants, rubbers, glycol ethers, butyl acrylate, plastics and more from the bolstering building & construction and transportation industry across Asia-Pacific countries. Additionally, increased demand for butanol in the application relating to home & industrial cleaning and chemical intermediates in Asia-Pacific is expected to further drive the Asia-Pacific Butanol Market size growth over the forecast period. The novel coronavirus pandemic had negative consequences in a variety of butanol end-use industries in Asia-Pacific. The production halt owing to enforced lockdown in Asia-Pacific countries resulted in decreasing demand and consumption of butanol, which had a direct impact on the Asia-Pacific Butanol Market size in the year 2020.

Report Coverage

The “Asia-Pacific Butanol Market Report – Forecast (2022-2027)” by IndustryARC, covers an in-depth analysis of the following segments in the Asia-Pacific Butanol industry.

By Type: N-butanol, 2-butanol, Iso-butanol and Tert-butanol.
By Feedstock: Conventional and Biobased.
By Packaging: Drums, Bottles, Bags and Others.
By Application: Coating Resins, Butyl Carboxylates (Glycol Ethers, Butyl Acetate and Butyl Acrylate), Direct Solvent Use, Plasticizers, Fuels & Lubricants and Others.
By End-Use Industry: Paints & Coatings, Chemical & Petrochemical, Textile, Agriculture, Building & Construction (Commercial, Residential, Industrial and Infrastructure), Food & Beverages, Transportation [Aerospace, Automotive (Passenger Vehicle, Light Commercial Vehicle and Heavy Commercial Vehicle), Marine and Locomotive], Pharmaceutical, Personal Care (Hair Care, Body Care,\ and Others), Cleaning Industry (Home and, Industrial), Plastics & Rubber Industry and Others.
By Country: China, Japan, India, South Korea, Australia and New Zealand, Indonesia, Taiwan, Malaysia and the Rest of APAC.

Key Takeaways

• China dominates the Asia-Pacific Butanol Market, owing to the growing transportation industry in the country. The increasing per capita income and evolving lifestyle of individuals coupled with the rising population are the major factors expanding the transportation industry in China.
• The reduction of carbon emissions to a large extent and its growing prominence as a building block for chemical manufacturing are two major factors driving the Asia-Pacific butanol industry.
• Biofuel based on butanol is gaining popularity as a green alternative to petroleum-based fuels. Because of its high energy content, it is preferred as a superior automobile fuel over bioethanol and methanol, which is assisting market growth.
• The market for motor fuel is expected to be driven by the growing number of cars on the road and increasing vehicle sales, as a result of which fuel, lubricants and coatings demand are expected to increase, which could boost the Asia-Pacific butanol industry in the coming years.
• In addition, as the demand for coatings resin and plasticizers is growing, various paint manufacturers are expanding their product lines, which is expected to continue to drive the Asia-Pacific butanol growth.

Figure: Asia-Pacific Butanol Market Revenue, 2021-2027 (US$ Billion)

Asia-Pacific Butanol Market Segment Analysis – By Type

The N-Butanol segment holds the largest share of 84% in the Asia-Pacific Butanol Market share in 2021 and is forecasted to grow at a CAGR of 5.3% during the forecast period 2022-2027. N-Butanol, also known as 1 butanol or butyl alcohol, is an alcohol made from corn sugars through petrochemical processes or fermentation. N-butanol is a better fuel alternative than ethanol because it has more energy, is more compatible with the gasoline structure, does not absorb water from the environment and is non-corrosive. Researchers have been looking into n-butanol as a biofuel alternative to bioethanol in recent years. Because it has many advantages over ethanol, such as higher energy content, lower volatility and does not readily absorb moisture, straight-chain alcohol (n-butanol) is considered the next generation biofuel. Another advantage is that butanol has twice as many carbon atoms as ethanol. As a result, n-butanol demand is substantially increasing when compared with other types of butanol, thereby significantly driving the n-butanol market growth.

Asia-Pacific Butanol Market Segment Analysis – By Packaging

The drum segment holds the largest share in the Asia-Pacific Butanol Market share in 2021 and is forecasted to grow at a CAGR of 5.1% during the forecast period 2022-2027. Drums, such as plastic, steel and fiber drums, are ideal for storing and transporting butanol. As bottles and bags are less capable of holding or transferring chemical materials, steel and plastic drums are frequently used for butanol packaging. In addition, their versatility, steel and fiber drums are an excellent choice for storing and transporting large or bulk quantities of butanol. They're also simple to palletize and wrap, making them an excellent choice for butanol bulk shipping. All of these advantages of using plastic, steel and fiber drums as packaging are gaining segment traction.

Asia-Pacific Butanol Market Segment Analysis – By End-Use Industry

The transportation segment held a significant share in the Asia-Pacific Butanol Market share in 2021 and is forecasted to grow at a CAGR of 5.8% during the forecast period 2022-2027. Butanol is often used as an intermediate to manufacture bio-fuels and paints, which are then widely utilized in the transportation sector in automobiles, aircraft, ships and trains. Biofuel is biodegradable, non-toxic and produces fewer pollutants when burnt completely, owing to which consumers are shifting towards butanol-based biofuels instead of ethanol and methanol based. The transportation industry is flourishing in various Asia-Pacific countries, for instance, according to India Brand Equity Foundation (IBEF), the Indian automotive industry is expected to reach Rs. 16.16-18.18 trillion (US$ 251.4-282.8 billion) by 2026. The Chinese ship industry completed the construction of ships totaling over 20.92 million deadweight tons (dwt) from January to June 2021, up 19 percent year-on-year, according to data from the Ministry of Industry and Information Technology. This is directly supporting the Asia-Pacific Butanol Market growth in the transportation industry.

Asia-Pacific Butanol Market Segment Analysis – By Country

China held the largest share in the Asia-Pacific Butanol Market in 2021 and is forecasted to grow at a CAGR of 5.8% during the forecast period 2022-2027, owing to the bolstering growth of the transportation sector in China. The Chinese transportation industry is growing, for instance, in November 2020, Boeing forecasted that China's airlines would spend US$1.4 trillion on 8,600 new planes and US$1.7 trillion on commercial aircraft services over the next 20 years. According to the International Trade Administration (ITA), China continues to be the world’s largest vehicle market by both annual sales and manufacturing output, with domestic production expected to reach 35 million vehicles by 2025. China's shipbuilding industry registered strong growth during the first half of 2021. The industry completed the construction of ships totaling over 20.92 million deadweight tons (dwt) from January to June, up 19 percent year-on-year, according to data from the Ministry of Industry and Information Technology. New orders received by the country's shipbuilders surged 206.8 percent from a year earlier, totaling 38.24 million dwt. By the end of June 2021, China's shipbuilding sector had received orders amounting to 86.6 million dwt, up 13.1 percent year-on-year. And with the increasing production of vehicles, the demand for biofuels and paints is significantly increasing in China, which is accelerating the demand for the Asia-Pacific butanol industry in China over the forecast period.

Asia-Pacific Butanol Market Drivers

Government Initiatives Bolstering the Growth of the Building & Construction Sector:

Butanol-based paints, coatings, rubbers and polymers are often employed in buildings in applications such as windows, walls, doors, floors and more. The governments are taking initiatives to increase the building & construction activities in the Asia-Pacific region. For instance, Kansai International Airport in Japan will spend about 100 billion yen (US$911 million) by 2025 to upgrade the larger terminal, to increase space for international flights at the country's No. 2 hub. As part of the Centre's Udan scheme to assist with growing air traffic, the Indian Union Budget of February 2020 seeks to build 100 new airports by 2024. The Indian government has launched a project called the “Pradhan Mantri Awas Yojana (PMAY) program”, which aims to provide affordable housing to all urban poor people by 2022 through financial assistance. Such government initiatives are set to increase the demand for paints, coatings, rubbers and polymers in the APAC building & construction sector and further drive the Asia-Pacific Butanol Market growth during the forecast period.

Bolstering Growth of Personal Care and Food & Beverage Sector:

Butanol is often used in the personal care & cosmetics and food & beverage industry as a solvent in pharmaceuticals and a flavoring agent in foods. Due to rising consumer demand and increasing per-capita income of individuals, the personal care & cosmetics and food & beverage industry is booming in Asia-Pacific countries. For instance, according to the India Brand Equity Foundation (IBEF), the beauty, cosmetics and grooming market in India in 2025 will have grown from US$6.5 billion to US$20 billion. According to the International Trade Administration, Thailand's beauty and personal care goods market was valued at around US$6.2 billion in 2018 and is projected to grow to US$8.0 billion by 2022. Thailand's beauty and personal care sector is projected to grow at a rate of 7.3 percent per year from 2019 to 2022. According to the China Chain Store & Franchise Association, the food and beverage (F&B) sector in China reached $595 billion in 2019, up 7.8% from 2018. According to the United States Department of Agriculture (USDA), in 2020, the total value of all retail food and beverage (F&B) sales in Japan was US$474.13 billion, a 1.5 percent increase over 2019 sales of US$466.97 billion. Since the personal care & cosmetics and food & beverage sector industries are booming in the Asia-Pacific countries, the demand for butanol is also significantly increasing in APAC. Thus, the increasing personal care & cosmetics and food & beverage sector act as a driver for the butanol market during the forecast period.

Asia-Pacific Butanol Market Challenges

Production and Utilization of Bio-butanol:

Bio-Butanol has many production and utilization barriers associated with it, for illustration, bio-butanol is produced in small quantities. The yield of bio-butanol produced by acetone-butanol-ethanol (ABE) fermentation is lower than that of bio-ethanol produced by yeast ethanol fermentation. Although bio-butanol produced by acetone-butanol-ethanol (ABE) fermentation has a higher energy density than other low-carbon alcoholic biofuels, its heating value is still lower than that of real gasoline or diesel fuel, so when used as a fossil fuel substitute, the fuel flow must be increased. In addition, because bio-butanol is an alcohol-based fuel, it may be incompatible with some fuel system components and cause inaccurate gas gauge readings in vehicles equipped with capacitance fuel level gauging. Due to its lower octane number, bio-butanol produced by acetone-butanol-ethanol (ABE) fermentation may produce more greenhouse gas emissions per unit of motive energy extracted than bio-ethanol. A higher-octane number indicates a higher compression ratio and efficiency and a higher engine efficiency results in fewer greenhouse gas emissions. When used in Spark-ignition engines, the higher viscosity of bio-butanol could cause corrosive or aggravation problems. During the forecast period, all of these production and utilization barriers of biobutanol are expected to be one of the major factors limiting the Asia-Pacific Butanol Market growth.

Asia-Pacific Butanol Industry Outlook

Technology launches, acquisitions and R&D activities are key strategies adopted by players in the Asia-Pacific Butanol Market. The top 10 companies in the Asia-Pacific Butanol Market are:

1. Eastman Chemical Company
2. Mitsubishi Chemical Corporation
3. Dow
4. SABIC
5. Galaxy Chemicals
6. KH Chemicals
7. Solventis
8. KH Neochem Co., Ltd.
9. OQ Chemicals GmbH
10. China National Petroleum Corporation (CNPC)

Recent Developments

• In July 2021, a group of researchers from South Korea's Gwangju Institute of Science and Technology developed a method for directly generating 1-Butanol from CO2 using the electrochemical reduction reaction (CO2RR) and copper phosphide (CuP2) without the need for CO dimerization.
• In June 2021, the government of Gujarat and IOC entered into a memorandum of understanding (MoU) for investment promotion for executing the LuPech project, the N-Butanol project and other infrastructure projects at the Gujarat refinery.
• In February 2020, Dow and Johnson Matthey (JM) announced that China-based company, Guangxi Huayi New Material Company Ltd. (Huayi), has selected LP OxoSM SELECTORTM 10 Technology to produce butanol at a new manufacturing facility. Under this license, the plant will be built at Huayi’s integrated petrochemical complex in Qinzhou Port, P.R. China with an annual butanol capacity of 300,000 metric tonnes per annum. 

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