Increasingly stringent Chinese emissions regulations in emerging markets will be a boon for additives producers.
A researcher works at a Sinopec laboratory Image: Sinopec
As smog continues to stifle many of China's larger cities, the government responded by toughening vehicle and emissions regulations, which in turn is creating a demand for higher quality fuels and lubricants.
According to a report from Asia Market Info & Dev Co, China is now the largest market for additives globally, and is set to continue growing as regulations become tougher and automotive technology becomes increasingly sophisticated.
Brazil and India are also tightening regulations for diesel sulphur levels in order to combat rising pollution - with India now fast-tracking its standards to 2020. Rules pressure from government and environmental bodies is set to boost the speciality additives market and drive biodiesel and ultra low sulphur diesel sales. Cold flow improvers, cetane improvers and lubricity improvers will also see an uplift in sales in emerging markets.
Despite an economic slowdown in China and other BRICs countries that rely heavily on commodities, which are enduring a prolonged period of depressed prices, additives sales are likely to remain buoyant as demand for better performing fuels and lubes increases.