Market Trends of Dimethyl Ether Industry
LPG Blending Segment to Dominate the Market
- Liquefied petroleum gas (LPG) is one of the significant applications of dimethyl ether (DME), which can be blended with traditional LPG at a pre-specified ratio for many applications.
- DME is blended with LPG as an alternative fuel additive for enhancing combustion, reducing hazardous emissions, and reducing dependency on LPG. Currently, around 15-25% of DME is utilized in DME-LPG blends, with higher ratio blends being researched, as a better blend may require equipment changes for usage.
- DME is used for LPG blending that is in Propane autogas in vehicles. According to the Propane Education and Research Council, there are nearly 260,000 on-road LPG vehicles with certified fuel systems in the United States. Many are used in fleet applications, such as school buses, shuttles, and police vehicles.
- Similarly, according to the European Alternative Fuels Observatory (EAFO), the number of liquefied petroleum gas (LPG) vehicles in Hungary will be 23,194 in 2022. However, the number is lowest when compared to 24,141 in 2021.
- Countries like China, India, and Indonesia are aggressively pushing for the use of DME as an alternate fuel, as these countries are highly dependent on imports to meet their local LPG demand.
- According to the National Bureau of Statistics of China, the liquefied petroleum gas (LPG) production output in China was 4.43 million metric tons in December 2023 and registered growth when compared to 4.15 million metric tons in November 2023.
- Therefore, the factors above are expected to impact the market significantly in the coming years.
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Asia-Pacific to Dominate the Market
- Asia-Pacific holds the largest consumption share of dimethyl ether (DME) from various end-use applications such as LPG blending, propellants, fuels, and others. In Asia-Pacific, China has a significant share of demand, followed by Japan, South Korea, and India, among others.
- China is the first country to start using DME-blended LPG on a commercial scale. The majority of China's DME demand is from households (for LPG blended cooking gas supply). In China, 20% of DME blended LPG products are used for this purpose.
- According to the Petroleum Planning and Analysis Cell, as of October 2023, PSU OMCs (IOCL, BPCL, and HPCL) together have 31.54 crore active LPG customers in the domestic category whom 25,425 LPG distributors are serving.
- According to the METI (Japan), the production volume of liquified petroleum gas (LPG) in Japan accounted for 3.07 million metric tons in 2022.
- Indonesia is another Asian country aggressively pushing for DME blended LPG for its energy needs. Companies, such as Air Products and Chemicals and PT Bukit Asam, are moving forward with significant projects in the country to produce DME from coal for LPG blending applications.
- Thus, the demand for DME in the region is expected to increase during the forecast period due to the factors mentioned above.
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