by Crude tall oil (CTO) is a by-product of the kraft pulping process used by the pulp industry to produce wood pulp from pine trees. It is obtained from the black liquor phase of the kraft pulping process after generating tall oil soap. Crude tall oil finds numerous application in the production of various chemical compounds. For instance, it is used as an additive in the production of resins and adhesives to impart adhesive and bonding properties. Furthermore, CTO derivatives such as tall oil fatty acid and tall oil rosin find use in coatings, inks, drilling fluids, and metal working fluids owing to their water repellent and lubricating properties.
The Global crude tall oil market is estimated to be valued at US$ 1.93 BN in 2024 and is expected to exhibit a CAGR of 4.5% over the forecast period 2024 To 2031.
Key Takeaways
Key players operating in the crude tall oil market are Citec Group Oy Ab, Ingevity Corporation, Georgia-Pacific Chemicals, Forchem Oyj, Kraton Corporation. The growing applications of tall oil derivatives in industries such as construction, automotive, coatings, and chemicals are expected to present lucrative growth opportunities for players in the Global Crude Tall Oil Market Demand.
Moreover, ongoing R&D for developing tall oil derivatives with enhanced functionalities is anticipated to bolster the market growth over the forecast period.
Market drivers
The crude tall oil market is expected to be driven by the increasing demand from the construction industry. Tall oil rosin finds application as an additive in construction materials such as sealants, flooring, and tiles owing to its water-resistant and adhesive properties. Additionally, growing use of crude tall oil as an environment-friendly and renewable substitute for petroleum-based products from industries such as automotive, lubricants, coatings is anticipated to boost the market growth during the forecast period.
Challenges in the Crude Tall Oil Market
The crude tall oil market is currently facing challenges due to fluctuating prices of raw materials and increasing environmental regulations regarding the usage of derivatives obtained from crude tall oil. The prices of pine wood used for obtaining crude tall oil through kraft pulping process are rising continuously making production of crude tall oil costly. Furthermore, regulations mandating reduction in usage of materials releasing volatile organic compounds in atmosphere are negatively impacting the demand for crude tall oil derivatives like tall oil fatty acids and distilled tall oils from various end-use industries.
SWOT Analysis
Strength: Principal use of by-product from kraft pulping process, thereby supporting sustainability in pulp industry.
Weakness: Fluctuating raw material prices and unstable supply of pine wood affect costs. Strict environmental regulations on VOC emitting derivatives hamper growth.
Opportunity: Emerging applications in rubber, coating, oilfield chemicals boost prospects. Focus on green tall oil derivatives with lower emissions opens new avenues.
Threats: Substitution risk from alternative green materials may impact demand over long-term. Intense competition from substitutes like vegetable and animal fats increases pricing pressure.
Geographical Regions
In terms of value, North America accounts for the major share in crude tall oil market owing to presence of key manufacturers and major end-use industries in the region. Europe is the second largest regional market supported by developed pulp industry and growing tire industry driving tall oil fatty acid demand in the bloc.
The Asia Pacific region is anticipated to witness fastest growth during the forecast period. Factors such as increasing crude tall oil derivatives consumption from tire manufacturing, construction, rubber, and coating industries coupled with speedy industrialization are expected to drive the market in Asia Pacific.
*Note:
1. Source: Coherent Market Insights, Public sources, Desk research
2. We have leveraged AI tools to mine information and compile it
