Crude Tall Oil Market

Crude Tall Oil Market Outlook (2022-2032)

The primary concern of the environment and fostered demand for alternative renewable fuel options are likely to gain attention in the upcoming period. Crude tall oil is the third most abundant chemical by-product in a Kraft mill after lignin and hemicellulose. Crude tall oil is a co-product of the paper pulping procedure used by many Kraft mills. Tall oil soap (raw rosin soap or resonate) is collected from the Kraft industries and then acidified to make crude tall oil.

Crude tall oil is a blend of various elements, such as fatty acids, resin, and other neutral materials, and forms water-in-oil mixtures and stabilizes mud systems at high temperatures. Crude tall oil can be further refined using a separation process to segregate it further into TOFA (tall oil fatty acid), tall oil rosin, and distilled tall oil. Crude tall oil finds many usages in chemical and fuel industries due to its cost-effectiveness and the fact that it is less harmful to the environment.

The global crude tall oil market is valued at USD 1.93 Billion at present in 2022. The market is further anticipated to grow and surpass a valuation of USD 3 Billion by end of 2032. The industry is expected to grow with a CAGR of 4.5% in the forecast period. The period of assessment under this research is 2022- 2032.

Report Attributes	Details
Market size (2022 A)	USD 1.93 Billion
Base Year for Estimation	2022
Forecast duration for this research	2022-2032
Forecasted Market value (2032 F)	USD 3 Billion
Global Market Growth rate (2022-2032 E)	CAGR of 4.5%
Key Companies Profiled	Citec Group Oy Ab Ingevity Corporation Georgia-Pacific Chemicals Forchem Oyj Kraton Corporation

What drives the demand in the crude tall oil market?

The demand for crude tall oil is increasing due to growing demand for low-cost and environment-friendly crude oil to be used in various value-added products. Fluctuating prices of fuels and limited resources are diverting chemical companies’ attention towards crude tall oil, which is eco-friendly and is produced as a by-product during the pulping process in the paper and pulp industry. Most Kraft pulping mills sell their waste streams to chemical companies, which further process this waste into value-added products.

The growth of this market depends on the growth of the global wood pulping sector. Different applications of crude tall oil in various industries are expected to boost the demand for crude tall oil during the forecast period. Consumers feel attracted to crude tall oil due to the low prices offered by crude tall oil processing chemical companies. It is extensively used in biofuels and energy. The industry is expected to witness new applications and growing demand for biofuels during the forecast period.

Turpentine crude tall oil is a key product required for paper-making procedures which are not directly from Kraft pulp but it’s made from crude sulfate soap. As a result, the product is likely to drive demand in the forecast period.

What are the restraints faced by manufacturers?

Manufacturers in biofuel production encounter challenges in the production of first-generation biofuels. The production, harvesting, and transportation of crude tall oil is a challenge ahead of manufacturers. Moreover, apart from the logistics challenge, there is also complexity associated with microbial fermentation and pre-treatment.

There is also a lack of encouragement for the usage of biofuels may hit the market demand. There is a need for rising government support in the innovation of alternative fuel options to reduce the interdependence on other nations for energy and security.

There is a need for manufacturers to improvise and invent new technologies which are sufficient for the conversion of biomass into liquid forms of fuels. Regulatory measures such as Renewable Energy Directive have an effect on the market as they put a cap on raw materials. The ambiguities in policies may affect crude tall oil production.

Regional Outlook

North America is anticipated to dominate the crude tall oil market by the end of 2028. Europe is the second largest crude tall oil market and is expected to grow more due to the renewable energy directive of the European Union. EU’s ‘Renewable Energy Directive’ wants all EU members to confirm that at least 10% of their transport fuel comes from renewable sources by 2020. This directive can work as a key driver for the growth of the crude tall oil market in Europe during the forecast period.

The Asia Pacific is also anticipated to witness remarkable growth in the crude tall oil market during the forecast period. China and ASEAN countries are expected to witness significant growth in the crude tall oil market due to their well-established paper and pulp industry. By considering the countries which have high production of crude tall oil, Scandinavia is on the fast rank followed by USA and Russia.

Segment wise insights

On the basis of distillation, TOFA (Tall oil fatty acids) segment are dominant on the basis of the distillation procedure. The key region in the manufacturing of TOFA is the EU and USA. There is little trade of international scale which has resulted in zero dependence on imports.

On the basis of application, crude tall oil is aggregately used in the painting and adhesive sectors. There is the extensive usage of metalworking fluids and metallic stabilizers which is likely to propel market growth in the crude tall oil industry. The products are used after refining for the sizing of paper and as a varnish.

Competitive landscape

The crude oil industry is partially competitive where the top 5 players in the industry are accounting for about 50% of the market share. The market is experiencing the presence of small players which is anticipated to open lucrative opportunities in the forecast period.

The market changes influence the crude oil prices which are likely to affect the profit margins of the firms. The distinction in the market is also done using the price criteria as the price is an essential criterion in the retail and wholesale sectors. The key companies working on the innovation and integration of technology are likely to gain positive growth traction in the forecast period.

Crude tall oil market: Segmentation

• By Distillation Process :

  • Tall Oil Fatty Acids (TOFA)
  • Tall Oil Heads
  • Distilled Tall Oil
  • Tall Oil Rosin
  • Tall Oil Pitch

• By Application :

  • Painting and coatings
  • Inks & Toners
  • Adhesives
  • Vehicle Tires
  • Hygiene commodities
  • Substitutes for antibiotics
  • Mining
  • Chewing Gums
  • Electronics
  • Papermaking

• By End-Use :

  • Metalworking
  • Building & Construction
  • Chemical
  • Electronics & Electricals
  • Mining Industry
  • Personal Care & Cosmetics
  • Automobile

• By Region :

  • North America (U.S., Canada)
  • Latin America (Mexico. Brazil)
  • Western Europe (Germany, Italy, France, U.K, Spain)
  • Eastern Europe (Poland, Russia)
  • Asia Pacific (China, India, ASEAN, Australia & New Zealand)
  • Japan
  • Middle East and Africa (GCC, S. Africa, N. Africa)