Global Diesel Exhaust Fluid (DEF) Market Outlook to 2030

Global Diesel Exhaust Fluid (DEF) Market Overview

• The Global Diesel Exhaust Fluid (DEF) Market was valued at USD 33.9 billion in 2023. This market is primarily driven by stringent emission regulations, increasing vehicle production, and the rising adoption of DEF in commercial and passenger vehicles. The shift towards reducing harmful emissions and the growth in the automotive sector are further boosting market growth.
• The major players in the global DEF market include Yara International ASA, CF Industries Holdings, Inc., Brenntag AG, Royal Dutch Shell plc, and BASF SE. These companies are at the forefront of developing high-quality DEF solutions, focusing on enhancing efficiency, sustainability, and compliance with environmental standards across various sectors, including transportation, agriculture, and construction.
• Yara International ASA's full-year 2023 EBITDA, excluding special items, was $1.712 billion, reflecting a 65% decline from $4.889 billion in 2022, primarily due to lower margins. Deliveries decreased by 5%, yet the DEF segment showed resilience, with European deliveries up 3%, despite a 92% drop in EBITDA for the region.
• In 2023, North America dominated the global DEF market due to stringent emission regulations, high vehicle production, and the presence of major automotive and DEF manufacturing companies.

Global Diesel Exhaust Fluid (DEF) Market Segmentation

The global DEF market is segmented by vehicle type, application, supply mode, and region.

• By Vehicle Type: The market is segmented into passenger cars, LCVs (Light Commercial Vehicles), and HCVs (Heavy Commercial Vehicles). In 2023, the HCV segment held the largest market share, driven by the high usage of DEF in heavy-duty trucks and buses.

• By Supply Mode: The market is segmented into bulk, portable containers, and pumps. In 2023, the bulk segment held the largest market share, supported by the growing need for large-scale DEF storage and supply in commercial fleets.
• By Region: The global DEF market is segmented into North America, Europe, Asia-Pacific (APAC), Middle East & Africa (MEA), and Latin America. In 2023, North America held the largest market share, supported by stringent emission regulations and the high demand for DEF in the region.

Global Diesel Exhaust Fluid (DEF) Market Competitive Landscape

• CF Industries Holdings, Inc.: In April 2024, CF Industries and JERA announced a joint development agreement to explore a low-carbon ammonia production project at CF's Blue Point Complex in Louisiana. The project aims for a capacity of 1.4 million metric tons annually, with production expected to commence in 2028.
• Royal Dutch Shell plc: In April 2024, Shell announced a joint development agreement with JERA to explore a low-carbon ammonia production project at its Blue Point Complex in Louisiana. The project aims for a capacity of 1.4 million metric tons annually, with production expected to commence in 2028.

Global Diesel Exhaust Fluid (DEF) Market Analysis

Global Diesel Exhaust Fluid (DEF) Market Growth Drivers:

• Stringent Emission Regulations: Governments globally are enforcing stringent emission regulations to combat air pollution, boosting the demand for Diesel Exhaust Fluid (DEF). In 2023, regulations such as Euro 6 in Europe and EPA Tier 4 in the U.S. have led to increased DEF adoption in vehicles, promoting cleaner emissions.
• Increasing Vehicle Production: The global automotive industry produced over 92 million vehicles in 2023, contributing to a heightened demand for Diesel Exhaust Fluid (DEF). This surge in vehicle production is driven by consumer demand and regulatory requirements, necessitating the use of DEF to ensure compliance with strict emission standards across various markets.
• Rising Adoption of DEF in Commercial Vehicles: The adoption of Diesel Exhaust Fluid (DEF) is rapidly increasing in commercial vehicles, with over 75% of heavy-duty trucks in the U.S. utilizing DEF in 2023. This trend underscores the fluid's critical role in reducing nitrogen oxide emissions, aligning with environmental regulations and enhancing vehicle performance.

Global Diesel Exhaust Fluid (DEF) Market Challenges:

• High Cost of DEF Production: Rising urea prices, a key raw material, are projected to reach $310/tonne in 2024, impacting DEF manufacturers' profitability. CF Industries reported a 33% revenue decline in granular urea sales due to lower prices and increased costs, potentially limiting market growth.
• Supply Chain Disruptions: Supply chain issues, exacerbated by geopolitical tensions and natural disasters, pose challenges for DEF manufacturers. In 2023, Brazil's urea imports were limited to 7-8 million tonnes due to reduced domestic production, while China's exports plummeted 86%, disrupting global supply.

Global Diesel Exhaust Fluid (DEF) Market Government Initiatives:

• U.S. Environmental Protection Agency (EPA) Regulations: The EPA mandated Diesel Exhaust Fluid (DEF) use in diesel engines starting in 2010, with full compliance required by 2015. By 2023, around 90% of diesel vehicles were using DEF to meet stringent emission standards, reducing nitrogen oxide (NOx) emissions by up to 90% compared to previous regulations.
• European Union Emission Standards: The EU's emission standards, including Euro 6, impose strict NOx limits on vehicles to combat air pollution. As of 2023, compliance is mandatory, with fines for non-compliance. Euro 6 standards require a 50% reduction in NOx emissions from previous regulations, improving air quality across member states.

Global Diesel Exhaust Fluid (DEF) Market Future Market Outlook

The Global Diesel Exhaust Fluid (DEF) Market is expected to grow robustly over the coming years, driven by increasing vehicle production, advancements in DEF technology, and supportive government regulations.

Future Market Trends:

• Integration of IoT and Connected Solutions: By 2028, IoT and connected solutions are expected to enhance DEF management by optimizing supply chains and monitoring DEF quality. Nearly 70% of DEF suppliers plan to integrate IoT for improved efficiency and reduced costs.
• Expansion of Electric Vehicles (EVs) and Hybrid Vehicles: The growth of EVs and hybrid vehicles could impact the DEF market. However, the demand for DEF in heavy-duty trucks and agricultural equipment is expected to remain strong, driving market growth.