|
Forecast Period
|
2024-2028
|
|
Market Size (2028)
|
USD 183.25 billion
|
|
CAGR (2023-2028)
|
4.42%
|
|
Fastest Growing Segment
|
Polyethylene
|
|
Largest Market
|
Asia Pacific
|
Market Overview
Global Ethylene Market stood at USD 183.25 billion in 2022 and is anticipated to project robust growth in the forecast
period with a CAGR of 4.42% through 2028. C2H4, also known as ethylene, is a colorless
and flammable gaseous organic compound containing carbon atoms with a double
bond. It serves as a key raw material in the production of various compounds,
such as polyethylene (P), ethyl oxide, ethylene glycol, high-density
polyethylene, 1-2-dichloroethane, and vinyl acetate. The growing consumption of
these products is primarily driven by the booming plastic industry, which
relies heavily on ethylene as a building block. Not limited to just plastics,
ethylene also finds applications in agriculture, where it is used to enhance
plant health and growth.
The versatile nature of ethylene allows
for the production of different types of plastics, catering to various
industries including automotive, construction, consumer goods, packaging, and
more. Technological advancements have further optimized the use of plastics,
specifically low-density polyethylene (LDPE) and high-density polyethylene
(HDPE), in accordance with industry requirements. As a result, the market for
ethylene continues to be supported by the growing consumer demand for plastic
products.
One of the major driving factors behind
the growth of the Ethylene Market is the discovery of shale gas, which has
significantly reduced gas production costs. Ethylene, being a gas derived from
hydrocarbons, benefits from the lower prices of shale gas, leading to reduced
production costs. The rapid increase in shale gas production in recent years
has resulted in a corresponding increase in the production of ethane, which
serves as a crucial raw material for ethylene production. Consequently, gas
production is anticipated to witness substantial growth in the foreseeable future.
The declining gas production costs, coupled with the expansion plans of market
participants, are poised to support the continuous growth of the Ethylene
Market throughout the forecast period.
However, the growth of the Ethylene
Market faces certain challenges, primarily in the form of stringent government
regulations pertaining to its production and usage. Due to its flammable and
carcinogenic properties, strict regulations have been imposed to ensure safety
and environmental protection. Additionally, several countries are implementing
legislation to curb hydrocarbon-based gas companies, further intensifying the
regulatory pressure. Moreover, the volatility of raw material prices poses a
hindrance to market growth to some extent.
On a positive note, the Ethylene Market
is benefiting from the increasing demand for automobiles and electronic devices
in the Asia-Pacific (APAC) region, particularly in countries like China and
India. Ethylene, being a vital raw material in the automotive and electronics
industries, experiences a surge in demand as these sectors witness growth. In
the coming years, developing countries, with a rising middle-class population,
are expected to witness a further increase in the demand for electronic items
and automobiles. This increased demand for gas from end industries presents new
growth avenues for players operating in the Ethylene Market.
Key Market Drivers
Growing
Demand of Ethylene in Construction Industry
Ethylene, a colorless flammable gas
derived from natural gas and petroleum, plays a crucial role in the
construction industry. It's primarily used in the production of polyvinyl
chloride (PVC) and ethylene vinyl acetate (EVA), which are widely employed in
various construction activities.
PVC, a versatile plastic, finds extensive
applications in the construction industry. It is utilized in the manufacturing
of pipes, window frames, roofing materials, flooring, and wall coverings. This
popularity can be attributed to its exceptional durability, cost-effectiveness,
and resistance to environmental factors. With its versatility and reliability,
PVC has become a preferred choice for architects and builders alike.
On the other hand, EVA, known for its
flexibility and excellent adhesive characteristics, is extensively used in the
production of sealants, adhesives, and coatings. In the construction sector,
EVA's properties make it an ideal material for various applications. Its use
contributes to the growing demand for ethylene in the construction industry.
Several factors are driving the
increasing demand for ethylene in construction. The global
construction industry is experiencing significant growth, fueled by population
expansion, urbanization, and infrastructure development projects worldwide.
This surge in construction activities requires a reliable supply of
ethylene-based materials.
There is a growing need for
sustainable and durable construction materials. PVC and EVA, derived from
ethylene, are renowned for their longevity and resistance to environmental stress.
These properties make them highly desirable choices for construction projects,
aligning with the industry's focus on sustainability and longevity. Advancements in construction
technology, such as 3D printing and modular construction, have opened up new
opportunities for the utilization of ethylene-based products. These innovative
construction techniques require materials that exhibit specific properties and
compatibility, further driving the demand for ethylene-based products. The increasing demand for ethylene in
the construction industry has a positive impact on the global ethylene market.
It leads to an increase in production volumes and encourages innovation in
ethylene-based products tailored to meet the specific needs of the construction
sector.
Moreover, this growing demand is
influencing market trends. There is a rising focus on producing ethylene in a
more sustainable manner, driven by increasing environmental concerns and
stringent regulations. This has resulted in the development of bio-based
ethylene, which offers a greener alternative to conventional ethylene
production methods. By expanding its applications in
construction and adapting to emerging market trends, ethylene continues to play
a vital role in shaping the future of the construction industry. Its
versatility, durability, and sustainability make ethylene-based materials an
indispensable component in modern construction projects.
Growing
Demand of Ethylene in Packaging Industry
Ethylene plays a crucial role in the
manufacturing of several materials used in the packaging industry. It is a
versatile hydrocarbon compound that is primarily used to produce polyethylene
(PE), the most commonly used plastic globally, and ethylene vinyl acetate
(EVA), both of which find extensive applications in packaging.
Polyethylene, known for its flexibility,
durability, and resistance to moisture, is widely utilized in various packaging
applications such as plastic bags, films, containers, and bottles. On the other
hand, EVA, with its excellent barrier and sealing properties, is commonly used
in the production of flexible packaging materials.
The growing demand for ethylene in the
packaging industry can be attributed to several factors. The rise in
consumer demand for packaged food and beverages has led to an increased need
for high-quality and durable packaging materials. As people increasingly rely
on packaged goods, the importance of preserving product quality and extending
shelf life becomes paramount.
The surge in e-commerce
activities has significantly impacted the packaging industry. With the rise in
online shopping, there is an increased demand for packaging materials to ensure
safe and secure delivery of products. Ethylene-based products play a vital role
in meeting this demand, as they offer the necessary strength, durability, and
protective properties.
Furthermore, advancements in packaging
technology and the development of innovative packaging solutions have created
new opportunities for the use of ethylene-based materials. Smart packaging and
active packaging, which incorporate features such as freshness indicators and
antimicrobial properties, are gaining traction in the market. These innovative
solutions enhance product safety, extend shelf life, and improve overall consumer
experience.
The increasing demand for ethylene in
the packaging industry is not only driving growth in the global ethylene market
but also influencing market trends. There is a growing focus on producing
ethylene in a more sustainable manner, considering the increasing environmental
concerns and stringent regulations. This has led to the development of
bio-based ethylene, which offers a greener alternative to conventional
production methods. Ethylene plays a vital
role in the packaging industry, enabling the production of versatile and
high-performance materials. Its applications in polyethylene and ethylene vinyl
acetate contribute to the development of durable, flexible, and innovative
packaging solutions. The growing demand for ethylene-based products reflects
the evolving needs of the packaging industry and its commitment to enhancing
product quality, sustainability, and consumer experience.
Download Free Sample Report
Key Market Challenges
Hazardous
Environmental Impact and Strict Government Regulations
Ethylene, a crucial raw material used in
the production of various products such as plastics and antifreeze, is
primarily derived from natural gas and petroleum through a process called steam
cracking. This process, although efficient in meeting the demand for ethylene,
comes at a cost. Not only does it consume a significant amount of energy, but
it also contributes to the emission of greenhouse gases, exacerbating climate
change concerns.
Furthermore, the environmental impact of
ethylene-derived products, particularly single-use plastic packaging, cannot be
ignored. These materials, designed for convenience, often end up in oceans and
landfills, where they take hundreds of years to decompose. This persistent
pollution poses a serious threat to marine life and ecosystems, as well as
contributing to the global plastic waste crisis.
To address these pressing environmental
concerns, governments around the world have implemented strict regulations
aimed at reducing pollution and promoting sustainability. These regulations
often require manufacturers, including ethylene producers, to limit emissions,
adopt cleaner production methods, and invest in effective waste management
practices.
In the European Union, for example, the Industrial
Emissions Directive sets stringent operational conditions and emission limit
values for large industrial plants, including those involved in ethylene
production. Compliance with these regulations not only ensures a cleaner
environment but also promotes the development and adoption of advanced
technologies that minimize the environmental impact of the ethylene
manufacturing process.
Similarly, in the United States, the
Clean Air Act plays a crucial role in regulating the emission of pollutants from
industrial sources, including ethylene plants. By imposing strict emission
standards and requiring the implementation of pollution control measures, this
legislation aims to protect air quality and mitigate the environmental impact
of ethylene production.
However, it is important to acknowledge
that while these regulations are necessary for environmental protection, they
also come with challenges for ethylene producers. Compliance with the stringent
requirements often entails increased operational costs and the need for
significant investments in pollution control technologies. Therefore, finding a
balance between sustainability goals and economic viability remains a key
challenge for the ethylene industry.
Key Market Trends
Growing
Investment in Shale Gas
Shale gas, a natural gas trapped within
shale formations, has emerged as an important and abundant energy source
worldwide. Its discovery and utilization have sparked a significant shift in
the global energy landscape. Several factors have contributed to the
growing investment in shale gas. Advancements in drilling
technologies, such as hydraulic fracturing and horizontal drilling, have
revolutionized the extraction process. These techniques have made it
economically viable to access and extract shale gas from deep underground
formations, unlocking vast reserves that were previously inaccessible.
Shale gas is widely recognized
as a bridge fuel towards a cleaner and more sustainable energy future. Compared
to coal, shale gas has lower carbon emissions, making it a more environmentally
friendly option. This characteristic has garnered increased support from
governments and policymakers, who are looking to reduce their reliance on
fossil fuels and transition to cleaner energy sources. This support has further
accelerated investment in shale gas projects.
The surge in global energy
demand and the need for energy security have prompted countries to invest in
their domestic shale gas resources. For instance, Algeria has developed a
comprehensive 20-year investment plan to harness and produce shale gas
commercially. This strategic move not only helps meet the country's energy
needs but also boosts its economic growth and reduces dependence on foreign
energy sources.
The growing investment in shale gas is
having far-reaching implications on the global energy market. It has led to
increased production volumes, influencing global gas prices, and reshaping
energy trade dynamics. Countries with abundant shale gas resources, like the United
States, have transitioned from energy importers to energy exporters,
transforming their energy profiles and enhancing their geopolitical influence.
However, it is important to acknowledge
the challenges associated with shale gas extraction. Environmental concerns,
such as groundwater contamination and seismic activity, have been linked to the
extraction process. Additionally, there is growing awareness about methane
emissions, a potent greenhouse gas, during shale gas production. Addressing
these challenges through rigorous regulations and advanced technologies is
crucial to ensure sustainable and responsible development of shale gas
resources.
Shale gas has emerged as
a game-changer in the global energy landscape. Its abundance, coupled with
advancements in extraction technologies and recognition as a cleaner energy
source, has fueled significant investment worldwide. While the growing
investment presents opportunities for energy security and economic growth, it
also calls for responsible and sustainable practices to mitigate its
environmental impacts.
Segmental Insights
Feedstock
Insights
Based on the category of feedstock, the naphtha
segment emerged as the dominant player in the global market for Ethylene in
2022. Naphtha, a versatile feedstock in the petroleum industry, can be further
categorized into three distinct types: light naphtha, heavy naphtha, and
full-range naphtha, which is a combination of light and heavy naphtha. Known
for its widespread application, naphtha serves as a key raw material in various
sectors, including the production of fertilizers. Notably, it is utilized in
the synthesis of ammonia and the subsequent creation of fertilizers or public
gas. Moreover, naphtha steam cracking, a prevalent method, is predominantly
employed to produce ethylene, alongside other valuable petroleum feedstocks
such as Pyrolysis Gasoline (PG), mixed-C4, ethylene, and propylene. This
technique harnesses the potential of naphtha, unlocking a range of
possibilities for the industry.
Application
Insights
The Polyethylene segment is projected to
experience rapid growth during the forecast period. The high demand for
polyethylene is primarily influenced by its increasing application in the
manufacturing of plastics. The versatility and wide range of uses of
high-density polyethylene (HDPE) and low-density polyethylene (LDPE) across
various industries have contributed significantly to the market's growth.
Specifically, the demand for HDPE in food packaging has been on the rise due to
its exceptional tensile strength, durability, and non-toxic properties.
In fact, according to the Indian
Institute of Packaging (IIP), the consumption of packaging materials has
witnessed a substantial increase from 4.3 kilograms per person per annum to
approximately 8.5 kilograms per person per annum in 2019-2020. This surge in
packaging consumption further highlights the significance of polyethylene in the
plastic manufacturing industry, particularly in applications such as food
packaging, bottles, films, and more.
With the ever-increasing demand for
polyethylene plastics in various packaging applications, it is expected that
the global ethylene industry will experience significant growth during the
forecast period. The continuous advancements in the field of plastics and the
expanding scope of polyethylene's applications further contribute to the
positive outlook for the industry.
Download Free Sample Report
Regional Insights
Asia Pacific emerged as the
dominant player in the Global Ethylene Market in 2022, holding the largest
market share in terms of value. The global ethylene market is experiencing
significant growth in the APAC region due to its increasing demand in various
industries such as packaging, agriculture, construction, and more. One of the
key drivers of this growth is the flourishing agriculture sector in the region,
which is creating favorable conditions for the ethylene market. Ethylene, being
a natural plant hormone, is widely used as a ripening agent for fruits like
bananas, citrus fruits, and others. The increasing agricultural harvest and
production trends in countries such as India, China, and others are further
fueling the demand for ethylene in the market. Notably, according to the World
Bank and OECD national data, the agriculture sector's contribution to China's
GDP accounted for 7.6% in 2020, highlighting its significance.
Furthermore, ethylene holds a
major share of demand in plastic packaging applications in the food sector,
driven by the rising popularity of packaged foods in the APAC region. This, in
turn, has contributed to the growing demand and production of ethylene in APAC
for various applications in plastics, construction, agriculture, automotive,
and more. As a result, the global ethylene market is poised to witness rapid
growth during the forecast period, driven by the increasing demand and
production of ethylene in the APAC region.
Recent Developments
- In October 2021, Clariant, a leading
specialty chemicals company, announced its plans to utilize oxidative
dehydrogenation of ethane (ODG-E) for ethylene production in new plants by the
year 2024-25. This innovative technology aims to enhance the efficiency and
sustainability of ethylene production, contributing to a reduced carbon
footprint. The collaboration between Clariant and Linde Engineering, a global
engineering company, is set to revolutionize the ethylene-production process
and pave the way for a more environmentally friendly future.
- In July 2021, Clariant joined forces
with India Glycols Limited (IGL), a leading manufacturer of green
technology-based chemicals, to establish a joint venture focused on producing
ethylene oxide (EO) derivatives. This strategic partnership aims to provide
sustainable and renewable options in the market, addressing the growing demand
for eco-friendly chemical solutions. By leveraging their expertise and
resources, Clariant and IGL are poised to make significant contributions to the
sustainable development of the chemical industry.
- In October 2019, Sinopec, one of the
largest petroleum and petrochemical companies in China, and SABIC, a global
leader in diversified chemicals, embarked on a joint venture to boost the
expansion and production at the Tianjin ethylene plant. This milestone
collaboration is expected to significantly uplift the production capacity of
the plant to around 1.3 million tons yearly. By combining their strengths and
expertise, Sinopec and SABIC are set to meet the growing demand for ethylene
and contribute to the development of the petrochemical industry in the region
and beyond.
Key Market Players
- BASF SE
- Chevron Phillips Chemical Company, LLC
- Exxon Mobil Corporation
- Ineos Group Ltd
- LyondellBasell Industries N.V.
- Royal Dutch Shell plc
- Saudi Basic Industries Corporation
- China Petroleum & Chemical
Corporation (Sinopec)
- The Dow Chemical Company
- Lonza Group
|
By Feedstock
|
By Application
|
By Region
|
- Naphtha
- Ethane
- Propane
- Butane
|
· Polyethylene
· Ethylene Oxide
· Ethyl Benzene
· Ethylene Dichloride
|
- North America
- Europe
- Asia Pacific
- South America
- Middle East & Africa
|
Report Scope:
In this report, the Global Ethylene Market has been
segmented into the following categories, in addition to the industry trends
which have also been detailed below:
- Ethylene Market, By Feedstock:
o Naphtha
o Ethane
o Propane
o Butane
- Ethylene Market, By Application:
o Polyethylene
o Ethylene Oxide
o Ethyl Benzene
o Ethylene Dichloride
- Ethylene Market, By Region:
o North America
§ United States
§ Canada
§ Mexico
o Europe
§ France
§ United Kingdom
§ Italy
§ Germany
§ Spain
o Asia-Pacific
§ China
§ India
§ Japan
§ Australia
§ South Korea
o South America
§ Brazil
§ Argentina
§ Colombia
o Middle East & Africa
§ South Africa
§ Saudi Arabia
§ UAE
§ Kuwait
§ Turkey
§ Egypt
Competitive Landscape
Company Profiles: Detailed analysis of the major companies
present in the Global Ethylene Market.
Available Customizations:
Global Ethylene Market report with the given market
data, TechSci Research offers customizations according to a company's specific
needs. The following customization options are available for the report:
Company Information
- Detailed analysis and
profiling of additional market players (up to five).
Global Ethylene Market is an upcoming report to be
released soon. If you wish an early delivery of this report or want to confirm
the date of release, please contact us at [email protected]