In any business sector, regions characterized by high demand potential and limited production capacities present optimal opportunities for market players. Currently, the primary application of Dimethyl ether (DME) in countries facing Liquefied Petroleum Gas (LPG) deficits is in LPG blending. However, with the exception of China, none of these nations possess sufficient capacities to meet their DME demand. While several projects have been announced in countries like Iran, Indonesia, and India, none of them have become operational to date. Even if these projects come to fruition in the near future, the capacity deficit is likely to persist.
China stands out as the only nation with ample DME capacity to offset its LPG imports. Although the commencement of the planned plant in Indonesia could significantly reduce imports, it may not completely nullify them due to the demand cap on DME. All other countries are still far from meeting their current and future DME demand.
This scenario creates a substantial opportunity for market players to invest in these countries and establish DME production facilities. By doing so, companies can establish a robust DME presence in these nations, capitalizing on the vast demand potential and limited supply, leading to substantial profit margins.
Beyond its application in LPG blending, DME demonstrates significant potential as a substitute for diesel in conventional engines with a modified fuel injection system. The market potential for DME as a transport fuel is considerable, given the rapid growth in diesel consumption, particularly in the automotive segment. DME boasts a high cetane number and exhibits clean-burning properties with minimal emissions. Burning DME releases 44.0% fewer carbon emissions, achieves a 100.0% reduction in sulfur oxides (SOx), and complies with EURO IV standards without any modifications.
Furthermore, DME serves as an excellent fuel for gas turbines, demonstrating efficiency comparable to gas-fired power generation units with an efficiency range of 39.0% to 40.0% in turbines. Notably, the use of DME in power generation units results in lower CO2 emissions compared to both coal and oil.
The market dynamics for DME are shaped by the significant demand potential in countries facing LPG deficits, coupled with limited production capacities. While LPG blending is the current primary application, the versatility of DME extends to serving as a potential diesel substitute in engines and as a highly efficient gas turbine fuel. Investing in DME production facilities in these high-demand, low-supply regions presents a substantial opportunity for market players to capitalize on the burgeoning demand and realize significant profit margins.
Report Attribute/Metric | Details |
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Segment Outlook | Raw Materials, Application, and Region |
The Dimethyl Ether Market Size was valued at USD 6.02 Billion in 2023. The Dimethyl Ether industry is projected to grow from USD 6.37 Billion in 2024 to USD 16.18 Billion by 2032, exhibiting a compound annual growth rate (CAGR) of 12.35% during the forecast period (2024 - 2032). Methoxymethane is another term for dimethyl ether, sometimes referred to as DME. This gas has no flavor or color. The gas has a low boiling point and is produced from a variety of basic sources, including coal, biomass, methanol, and natural gas. Researchers from the Indian Oil Corporation (IOC R&D), Indian Institute of Technology (IIT) Delhi, and Ashok Leyland Ltd. have created a system that enables a diesel-powered automobile vehicle to function in flex-fuel mode, that is, either 100% diesel or Dimethyl Ether (DME) + Diesel mode. The initiative was funded by the Department of Science and Technology (DST), Government of India.
Source: Secondary Research, Primary Research, MRFR Database, and Analyst Review
The majority of industrialized and emerging nations have enacted stringent laws prohibiting high-emission fuels in the car industry. The creation of fuels other than standard fuels is a result of the ever-growing environmental concern. Dimethyl ether demand is anticipated to rise in the automotive sector due to its possible usage as a propane substitute in liquid petroleum gas (LPG), a fuel used in both the automotive and home sectors. Throughout the projection period, dimethyl ether will also be used more often in gas turbines and as a fuel for diesel engines.
The market segmentation, based on Raw Materials, includes Natural Gas, Coal, Biomass, and Others. The Natural Gas segment may dominate the market. Natural gas is an abundant and relatively low-cost feedstock for DME production, making it an attractive option for many producers. In addition, the use of natural gas as a feedstock for DME production can help to reduce greenhouse gas emissions, as DME is a cleaner-burning fuel compared to traditional fossil fuels.
Based on Application, the global market segmentation includes Transportation Fuel, Aerosol Propellant, LPG Blending, and Others. The LPG Blending segment may dominate the market. LPG is a mixture of propane and butane, and it can be easily blended with DME to create a higher-quality, cleaner-burning fuel. LPG blending can also help to increase the overall energy density of the fuel, making it more efficient. In addition, blending DME with LPG can provide economic benefits for producers, as it can help to increase the overall value of the LPG and improve the profitability of the blending process.
September 2023
Rinnai, a global manufacturer and distributor of gas appliances, and Dimeta, a global joint venture whose mission is to accelerate the production and use of renewable and recycled carbon Dimethyl Ether (DME), have signed a Memorandum of Understanding (MoU) to investigate the possibility of decarbonizing the LPG market in Europe via the use of DME.
According to the organizations, renewable and recycled carbon DME is a sustainable fuel that burns cleanly and is produced from a variety of feedstocks, including waste, biomass, and biogas. Compared to gasoline and diesel, it can reduce emissions by up to 85 percent.
DME, which shares chemical similarities with bioLPG and Liquified Petroleum Gas (LPG), can be seamlessly integrated into existing LPG supply chains and incorporated with it up to 20%. This offers a viable solution to the annual emission reduction of more than 13 million tonnes of LPG used for energy in Europe.
Dimeta and Rinnai will investigate the potential applications of DME blended with LPG and utilized in pre-existing appliances, in addition to 100% DME dedicated appliances such as dryers, furnaces, and hot water production systems.
Source: Secondary Research, Primary Research, MRFR Database, and Analyst Review
By region, the study provides market insights into North America, Europe, Asia-Pacific, and the Rest of the World. The Asia-Pacific region dominates the DME market due to the high availability of raw materials used in manufacturing, which is primarily due to the increased use of DME in various applications such as LPG blending, aerosol propellant, transportation fuel, and other applications within the region. North America, on the other hand, will continue to demonstrate profitable development over the projected period due to its uses in LPG blending, which results in reduced soot and NOx emissions in the environment.
Figure 3: DIMETHYL ETHER MARKET SHARE BY REGION 2022 (%)
Source: Secondary Research, Primary Research, MRFR Database, and Analyst Review
The major market players are investing a lot of money in R&D to expand their product lines, which will spur further market growth. With significant market development like new product releases, contractual agreements, mergers and acquisitions, increased investments, and collaboration with other organizations, market participants are also undertaking various strategic activities to expand their global presence. To grow and thrive in a market climate that is becoming more competitive and growing, competitors in the Dimethyl Ether industry must offer affordable products.
Manufacturing locally to cut operating costs is one of the main business tactics manufacturers use in the global Dimethyl Ether industry to benefit customers and expand the market sector. Major market players, including Jiutai Energy Group, Mitsubishi Corporation, Royal Dutch Shell, Nouryon, Air Products, and Chemicals Inc, and others, are attempting to increase market demand by funding R&D initiatives.
Mitsubishi Corporation is a Japanese multinational corporation that operates across a wide range of industries, including energy, metals, machinery, chemicals, and living essentials. The company was founded in 1950 and is headquartered in Tokyo, Japan. Mitsubishi Corporation has a global network of over 200 offices and subsidiaries in more than 90 countries. The company's business operations are organized into three main groups: Global Environmental & Infrastructure Business Group, Industrial Finance, Logistics & Development Group, and Energy Business Group.
Royal Dutch Shell, commonly known as Shell, is a British-Dutch multinational oil and gas company. The company is organized into four main business segments: Upstream, Downstream, Integrated Gas, and New Energies. The Upstream segment is involved in exploration and production activities, including conventional and unconventional oil and gas resources. The Downstream segment includes activities such as refining, marketing, and trading of oil and gas products, as well as the manufacture and marketing of chemicals. The Integrated Gas segment is involved in the production and marketing of liquefied natural gas (LNG) and other gas-related activities. The New Energies segment is focused on developing and investing in low-carbon energy sources, such as wind and solar power.
January 2022: Air Products and Chemicals Inc with Indonesian coal miner Bukit Asam and energy company Pertamina, started constructing a new plant that converts coal into dimethyl ether (DME) with an investment of USD 2.3 billion.
January 2021: Mitsubishi Corporation announced that Caribbean Gas Chemical Limited (CGCL), a joint venture between Mitsubishi group companies including Mitsubishi Gas Chemical Company (MGC), Mitsubishi Corporation (MC), and Mitsubishi Heavy Industries Engineering (MHIENG), and the National Gas Company of Trinidad, started commercial production of dimethyl ether (DME) from December 2020 with an annual production capacity of 20 kilotons of DME.
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