New Alternative Energy Opportunities to Accelerate the Global Butanol Market

IndexBox has just published a new report: 'World - Butanol - Market Analysis, Forecast, Size, Trends And Insights'. Here is a summary of the report's key findings.

The global butanol market is forecast to see a pronounced recovery in 2021. The increased demand for butyl acetate and butyl acrylate, which together comprise over half of the butanol consumption, emerges as a key butanol market driver amid the current construction boom in Asia, the U.S., Russia and Europe. The use of butanol as an alternative fuel may also accelerate the market expansion. The possibility to derive biobutanol from food waste and the emerging technology to obtain butanol from CO2 shape promising investment prospects, following the shift to a circular economy.

Key Trends and Insights

The global butanol market, including n'‘butanol and its isomers, declined by 6% y-o-y to 3.7M tonnes in 2020 (IndexBox estimates) due to the stagnation seen in the paint and varnish sector, the manufacture of plasticizing and stabilizing agents, perfume products and some other chemical industry segments during the pandemic.

Butanol demand from the chemical industry is starting to recover in 2021, as Covid restrictions ease and global economic performance improves. Butanol consumption is projected to regain pre-crisis figures in 2021, due to the current robust demand from the manufacture of butyl acetate and butyl acrylate, spurred by the construction boom in the U.S., Asian countries, the EU and Russia.

Increasing demand for green fuels could rapidly accelerate the expansion of the butanol market, as butanol is a highly efficient sustainable form of fuel. Compared with ethanol, butanol releases more energy during the combustion process, is less volatile and hygroscopic, and is also more convenient in terms of storage and transportation. Butanol is a non-corrosive substance and thus can be supplied via existing pipelines; it can also be used in vehicle transportation in its pure form or mixed with other forms of fuel, such as biodiesel.

Recently, the focus has shifted to the up-and-coming technology used to obtain biobutanol from food waste. According to the UN report, the world annually generates approx. 931M tonnes of food waste. As biobutanol production from agricultural resources, such as grain, remains unprofitable commercially, the processing of food waste to derive biobutanol may yet present a profit-promising area of alternative energy investments.

Obtaining butanol from CO2 via syngas synthesis is now emerging as even a more promising technology. Butanol production from CO2 and water is currently at the R&D stage, but several major chemical corporations and governments, e.g. Germany, are investing heavily into this process. The global shift to improved carbon capture, utilization and storage should make this technology particularly promising in case it reaches commercial viability.

Global Butanol Production

In 2020, after four years of growth, there was a significant decline in the production of butanols, when its volume decreased by -6.2% to 3.7M tonnes. Over the period under review, production, however, showed a relatively flat trend pattern. The most prominent rate of growth was recorded in 2014 with an increase of 3.5% year-to-year. Over the period under review, global production attained the peak volume at 3.9M tonnes in 2019 and then declined in the following year.

In value terms, butanol production dropped to $3.6B in 2020 estimated in export prices. Overall, production, however, recorded a pronounced shrinkage. The most prominent rate of growth was recorded in 2017 with an increase of 16% year-to-year. Over the period under review, global production hit record highs at $4.6B in 2014; however, from 2015 to 2020, production failed to regain momentum.

The countries with the highest volumes of butanol production in 2020 were the U.S. (678K tonnes), China (513K tonnes) and Russia (239K tonnes), with a combined 39% share of global production (IndexBox estimates).

From 2012 to 2020, the most notable rate of growth in terms of butanol production, amongst the key producing countries, was attained by China (+59.0% per year), while butanol production for the other global leaders experienced more modest paces of growth.

Global Butanol Imports

In 2020, global butanol imports fell sharply to 1.1M tonnes, with a decrease of -18.1% on 2019 figures. In value terms, butanol imports fell notably to $847M in 2020.

China was the key importer of butanols in the world, with the volume of imports reaching 351K tonnes, which was near 33% of total imports in 2020. It was distantly followed by Germany (148K tonnes), South Korea (117K tonnes) and India (109K tonnes), together committing a 35% share of total imports. Belgium (45K tonnes), Indonesia (31K tonnes), the U.S. (25K tonnes), the UK (24K tonnes) and Italy (24K tonnes) took a minor share of total imports.

From 2012 to 2020, average annual rates of growth with regard to butanol imports into China stood at -8.4%. At the same time, South Korea (+17.7%), India (+4.5%) and Germany (+1.5%) displayed positive paces of growth. By contrast, the UK (-2.3%), Indonesia (-4.0%), the U.S. (-9.4%) and Belgium (-16.8%) illustrated a downward trend over the same period.

In value terms, China ($226M) constitutes the largest market for imported butanols worldwide, comprising 27% of global imports. The second position in the ranking was occupied by Germany ($111M), with a 13% share of global imports. It was followed by India, with an 11% share.

Source: IndexBox Platform