GCC DEF (AdBlue) Market - Forecast(2023 - 2028)

GCC DEF (AdBlue) Market Overview

GCC Diesel Exhaust Fluid (DEF) (AdBlue) market size is forecast to reach US$845.9 million by 2026, after growing at a CAGR of 5.4% during 2021-2026. Diesel exhaust fluid is an anti-polluting agent used to reduce harmful Nitrogen Oxide (NOx) emissions from a diesel-powered Internal Combustion Engine. Exhaust gas recirculation (EGR) controls NOx emissions from diesel engines. Selective catalytic reduction (SCR) technology is one of the most cost-effective and fuel-efficient technologies used to reduce diesel engine emissions. The DEF fluids are manufactured by combining two chemicals in fixed volumetric proportions namely, 67.5 % of de-mineralized water and 32.5% of high-quality urea. Rapid industrialization along with infrastructure development in Gulf countries are driving the market for diesel exhaust fluid during the forecast period. An increasing number of DEF pumps along with stringent emission regulations are driving the demand for diesel SCR vehicles. The growing construction activities along with increasing usage of heavy construction equipment are supporting the market growth for the AdBlue market. However, increasing usage of electric vehicles along with low penetration of diesel vehicles are hampering the market growth during the forecast period. 

COVID-19 Impact

The COVID-19 pandemic is impacting different industries; one of the few industries that were largely hit to some extent was the diesel exhaust engine industry. Due to the Covid-19, the construction and automotive industry are impacted very badly which further impacted the GCC DEF market. Decrease in transportation activities along with low production of automobile vehicles during the covid-19 pandemic has negatively impacted the market. Delay in construction activities across the Gulf nations and economic crises are also challenging the market growth.

GCC DEF (AdBlue) Market Report Coverage

The report: “GCC DEF (AdBlue) Market – Forecast (2021-2026)”, by IndustryARC, covers an in-depth analysis of the following segments of the GCC DEF (AdBlue) industry.

By Technology: Selective Catalytic Reduction (SCR), Selective Non-Catalytic Reduction Technology (SNCR), and Others
By Storage Type: Storage Tanks [Mini-Bulk Storage Tanks, Indoor/Outdoor Storage Tanks, Bulk Shipment Truckload and Rail Cars], Portable Containers [Mini Containers, Drums/Totes, Others]
By Application: Vehicular [Heavy Vehicles {Trucks, Railways, Others}, Light Vehicles {Passenger Cars, and Others}, and Marine], and Non-Vehicular [Diesel Generators, Industrial Equipment, and others]
By Geography: Saudi Arabia, Kuwait, United Arab Emirates, Qatar, Bahrain, and Oman

Key Takeaways

• The increase in demand for commercial vehicles is driving the demand for the GCC DEF AdBlue market during the forecast period.
• The manufacturers are involved in developing advanced DEF fluids for the automotive industry. Investments in research and developments to enhance the capabilities of DEF (Adblue) are supporting the market growth

Figure: GCC DEF (AdBlue) Market Revenue Share, By Country 2020

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GCC DEF (AdBlue) Market Segment Analysis - By Technology

The Selective Catalytic Reduction (SCR) segment is accounted for 93.6% of the market share in 2020 and is estimated to grow significantly during the forecast period. Selective Catalytic Reduction (SCR) is one of the advanced active emissions control technology used among diesel engines. The technology helps to inject a liquid-reductant agent through a special catalyst into the exhaust stream of a diesel engine. SCR technology is the most cost-effective and fuel-efficient technology that helps to reduce diesel engine emissions. Marine systems such as cargo vessels, ferries, and tugboats are equipped with SCR technologies. The growing demand for off-road vehicles and heavy-duty vehicles is driving the market for the SCR technology segment.

GCC DEF (AdBlue) Market Segment Analysis – By Storage type

The storage tanks segment is accounted for 65.7% of the market share in 2020 and is estimated to grow significantly during the forecast period. Bulk supply mode storage solution is widely used for the distribution of diesel exhaust fluid to fleet owners. Bulk supply mode is cheaper than all the other supply modes of diesel exhaust fluid. The bulk mode will improve inventory management, and also it is economical savings compared to other storage solutions.

GCC DEF (AdBlue) Market Segment Analysis – By Application

The vehiculer segment is accounted for 80.0% of the market share in 2020 and is estimated to grow significantly during the forecast period. Stringent rules and regulations have been implemented by governments throughout the Gulf countries to reduce emissions from passenger vehicles. This leads to the growth of the diesel exhaust fluid in passenger cars. The growing usage of passenger cars in the Gulf countries is also boosting the market for diesel exhaust fluid. Based on the figures published by CEIC the United Arab Emirates passenger cars sales reached 129,901 Units in 2020. The non-vehcular sector is expected to grow at a high CAGR during the forecast period. The rapid growth in construction activities along with the growing usage of heavy equipment are supporting the market growth for GCC DEF (Adblue).

GCC DEF (AdBlue) Market Segment Analysis - By Geography

Saudi Arabia country held the largest share in the GCC DEF (AdBlue) market in 2020 up to 74.9%, due to increased consumer spending, rising per capita income, and varying consumer. The presence of automotive companies such as Al Jabr Group, Universal Motors Agencies (UMA), and Daimler Middle East & Levant FZE are driving the market growth in Saudi Arabia. According to the data published by Construction global, Saudi Arabia occupies approximately 35% market share in the GCC construction industry. According to the industry sources, approximately 5,200 construction projects are under construction in Saudi Arabia. The UAE is expected to register a high growth rate during the forecast period. Rapid growth in usage of advanced and luxury passenger cars is one of the major factors driving the market for GCC DEF (Adblue).

GCC DEF (AdBlue) Market Drivers:

Growing construction industry

The usage of AdBlue in the construction sector is increasing gradually due to the rise in demand for engine coolants used in construction equipment. Construction equipment includes excavators, dragline excavators, bulldozers, graders, and loaders among others. Over the past few years’ construction industry is growing significantly. The economic growth, investments in infrastructure projects, and technology advancements are boosting the industry. The construction sector plays an important role in the GCC country's economy. The UAE construction sector recorded growth of 3.3 percent in 2019 and it is expected to register 4.3% by 2021. According to the Khaleej Times, approximately US$198.8 billion worth of projects were completed in the GCC in 2019. Qatar is investing heavily in developing infrastructure and construction projects. Some of the ongoing construction projects in Qatar include FIFA World Cup 2022 stadiums, Extension of the New Doha Port pro, Extension of Hamad International Airport, and Expressways, which are supporting the market growth during the forecast period. 

Growth in the automotive industry

The diesel exhaust fluid is used in all types of vehicles such as heavy, light, and passenger vehicles. Diesel Exhaust Fluid (DEF) is designed to reduce NOx emissions in diesel vehicles.

The Saudi Arabian government (SAG) is focusing to develop a domestic automotive industry and has encouraged global vehicle manufacturers to establish local operations in the country. According to the data published by OICA, Saudi Arabia's new vehicles sales reached 452,544 in 2020 and UAE new vehicles sales reached 158,711 in 2020.

GCC DEF (AdBlue) Market Challenges:

Fluctuation in prices of Urea

Diesel Exhaust fluid is composed of both urea and de-ionized water, and hence, the prices of DEF are based on urea prices. The fluctuation in urea prices may fluctuate the market for DEF to some extent. The major industry that impacts the prices of urea is the agriculture industry. Urea prices are majorly influenced by the agriculture sector. So the prices of urea are highly unpredictable, as it is based on the supply and demand from the agriculture market. This is one of the major challenges faced by the GCC DEF market.

GCC DEF (AdBlue) Market Landscape

Technology launches, acquisitions, and R&D activities are key strategies adopted by players in the GCC DEF (AdBlue) market. Major players in the GCC DEF (AdBlue) market are:

1. BASF SE
2. CF Industries Holdings
3. Cummins Filtration
4. Nissan Chemical Industries
5. The McPherson Companies
6. Royal Dutch Shell Plc
7. Total
8. China Petrochemical Corporation (SINOPEC)
9. AIR Liquide (AIRGAS)
10. Yara International, Brenntag Ag
11. ADINLUBE
12. Gilbarco Veeder-Root
13. DUBI CHEM MARINE International
14. Blue Middle East (BME) company, and others.

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