Dimethyl Ether (DME) Market Size, Share & Industry Analysis, By Raw Material (Natural Gas, Coal, and Others), By Application (LPG Blending, Aerosol Propellant, Transportation Fuel, and Others), and Regional Forecast, 2024-2032

The global dimethyl ether market size was valued at USD 9.41 billion in 2023 and is projected to grow from USD 10.22 billion in 2024 to USD 20.32 billion by 2032, exhibiting a CAGR of 9.0% during the forecast period. Asia Pacific dominated the dimethyl ether market with a market share of 64.4% in 2023.

Dimethyl Ether (DME), also known as methoxymethane, wood ether, dimethyl oxide, or methyl ether, is the simplest ether. It is a colorless, mildly narcotic, nontoxic, easily flammable gas that can be treated as a liquid when gently pressurized at room temperature. It has properties that are similar to Liquefied Petroleum Gas (LPG).

China is the leading producer of DME globally, with additional manufacturing plants in Japan. Production plants are also located in Trinidad and Tobago, North America, Indonesia, and Uzbekistan, with significant new capacity expansions expected or under development. Sweden is home to the world's first bio DME factory.

The COVID-19 pandemic had a substantial impact on the market, as restrictions on transportation and industrial activity lowered demand. Supply chain disruptions and logistical issues exacerbated the situation, resulting in price fluctuation. However, as economies gradually reopened and demand for LPG, aerosol propellant, and transportation fuel rebounded, the market witnessed growth in consumption.

Dimethyl Ether Market Trends

Substitute for Conventional Diesel Fuel is a Prominent Trend

Decarbonizing the transportation industry is paramount in addressing the rising challenges posed by global pollution and its associated health issues. Thus, a range of ultra-low-carbon or carbon-negative fuels that are realistic, cost-effective, and long-term substitutes for today's fossil fuels can be made from several waste streams.

Dimethyl ether gasoline is a low-cost, low-carbon, and zero-soot option for petroleum diesel. Its role as an efficient hydrogen transporter facilitates its integration into the expanding hydrogen fuel cell vehicle industry. In addition, when combined with propane, the product will significantly minimize the carbon intensity of this widely used, clean-burning fuel.

DME can be used in diesel engines as a replacement for traditional diesel fuel due to its good ignition efficiency and high cetane number. On the other hand, it has a lower viscosity and lubricity than diesel fuel, its storage in a liquid state under low pressure, similar to LPG for gasoline engines limits the need for extensive engine modifications. Despite requiring minor modifications such as the installation of an injection pump and the installation of a pressure tank similar to that used for LPG. Relevant elastomers must also be used on the fuel line. DME can be pumped into a diesel engine with only minor modifications, and its combustion avoids the accumulation of soot.

DME can be used as a diesel engine fuel due to its high cetane number of 55 to 60. DME engine and vehicle production are complete, and the vehicle's reliability has been validated by a 100,000 km or longer road running test. Many such vehicles are manufactured in Japan, such as ISUZU ERGAmio, ISUZU Elf, Mitsubishi Fuso Canter, and NISSAN DIESEL Condor.

Regulatory Compliance and Emissions Reduction and Infrastructure Compatibility and Versatility

The energy and transportation sectors are key drivers for the market due to the product’s potential as cleaner and more sustainable fuel alternatives. In the energy industry, DME is gaining traction as an alternative to traditional fossil fuels in power generation and heating applications. Its clean burning properties help to lower emissions of pollutants such as Sulphur and particulate matter, which aligns with worldwide efforts to battle air pollution and mitigate climate change.

In the transportation industry, DME is a promising substitute for diesel fuel in buses, trucks, and ships. Its compatibility with current diesel engines and infrastructure, along with lower greenhouse gas emissions, makes dimethyl ether an appealing alternative for transportation companies looking to decrease their carbon footprint and meet rigorous emissions rules.

Thus, the energy and transportation industries are boosting market prospects for DME by prioritizing environmental sustainability and seeking cleaner fuel choices. DME’s versatility and environmentally friendly attributes make it an appealing choice for businesses and governments toward more sustainable energy and transportation solutions.

Dimethyl Ether Market Growth Factors

Growing Demand for Blended DME and Suitability as LPG Replacement Globally to Aid Market Growth

DME has various uses, including aerosol, propellant, chemical feedstock, transportation gasoline, and refrigerant. The blending of Liquefied Petroleum Gas (LPG) has emerged as a significant application in recent years due to its low toxicity, high cetane number, and good flammability. DME can also be made from various raw materials, including methanol, wood, and syngas, facilitating increased production and demand. In China, DME is combined with LPG and used for cooking and other domestic and industrial applications.

Companies such as Topsoe, Mitsubishi, and Total are focusing their attention on promoting DME as a modern and renewable synthetic fuel due to its excellent combustion properties, which can be used to replace LPG or blended into a fuel mixture. It is a gas at average temperatures and pressures, it can be liquefied at moderate pressure.

Similar to LPG, DME can be used for cooking and heating. Dimethyl ether’s resemblance to LPG and ease of processing from various feedstocks create several prospects for the ultra-clean fuel's arrival in new markets around the world as an LPG alternative.

DME can be mixed with LPG and used for cooking and heating in the home. As blending becomes more common within the vast and growing LPG industry, especially in developing countries where portable (bottled) fuel is sought for its cooler, healthier, and environmentally attributes in cooking and heating. This surge in demand for blended LPG is driving rapid growth in domestic applications across these regions.

DME's use as an alternative energy source has widespread interest in various countries, with initiatives in China, Egypt, India, Indonesia, Japan, Korea, Uzbekistan, and Vietnam either ongoing or expected. The market for "greener" energy sources in developing economies has sparked interest in blends containing products made from renewable feedstock.

RESTRAINING FACTORS

Regulations and Standards May Hamper Market Growth

The International Organization for Standardization is expected to issue international guidelines on the use of dimethyl ether. Scientific research is being undertaken by companies engaged in the manufacturing, mixing, and distribution of the product in China, in collaboration with manufacturers of valves, seals, and cylinders is advancing toward establishing a unified standard for LPG and its blends.

Lack of formal legislation regarding cylinder storage and DME blending percentages may impede market expansion and hinder the establishment of standardized safety protocols.

Dimethyl Ether Market Segmentation Analysis

By Raw-Material Analysis

Natural Gas Segment Dominates the Market Due to High Purity and Straightforward Conversion Process

By raw material, the market is segmented into natural gas, coal, and others. Natural gas is the major segment and holds the largest market share as it serves as the primary feedstock for DME production, offering high purity and relatively straightforward conversion processes. Industries utilizing natural gas for DME production benefit from its abundant availability, efficient conversion technologies, and favorable environmental profile, making it a preferred choice for many manufacturers. Additionally, regions with ample natural gas resources often witness robust DME production activities, driving dimethyl ether market growth.

Coal-derived DME is another substantial segment, particularly in areas with abundant coal reserves and developed Coal-to-Liquids (CTL) conversion technology. Coal remains a viable raw material source for DME in areas with significant coal deposits and a focus on energy security. Furthermore, DME is also derived from biomass, municipal solid waste, and industrial waste gases. These unconventional raw materials offer opportunities for diversification and sustainability within the DME market, catering to the growing demand for renewable and low-carbon fuel alternatives.

By Application Analysis

LPG Blending Segment Held the Largest Share Due to Wide Usage in Household Industry

By application, the market is segmented into LPG blending, aerosol propellant, transportation fuel, and others. LPG blending accounted for the largest dimethyl ether market share in 2023. DME provides various paths to renewable and zero-emission fuels for a variety of uses, due to its quiet, sootless combustion, ultra-low emissions, high cetane, low-cost LPG-compatible equipment and logistics, and high energy density. DME is an organic compound commonly used as an aerosol propellant and as a reagent in manufacturing compounds such as dimethyl sulfate, acetic acid, ammonium nitrate, ammonium phosphate, and ammonia, which is used as nitrogen fertilizer in the fertilizer industry.

DME can be sourced from natural gas, biomass, waste from pulp and paper plants, forest products, agricultural by-products, construction waste, and fuel crops such as switchgrass. It may also be derived directly from synthesis gas produced by coal or biomass gasification, or natural gas reforming. Among the various processes for chemical conversion of natural gas, direct synthesis is the most efficient.

As a green refrigerant, dimethyl ether can be used. Indeed, it has a significantly smaller global warming risk than chlorofluorocarbons and has no ozone depletion potential.

REGIONAL INSIGHTS

Regionally, the market is studied across North America, Europe, Asia pacific, Latin America, and the Middle East & Africa.

The market size in Asia Pacific stood at USD 6.06 billion in 2023. The region dominated the global market due to exponential growth in China and India. Dimethyl ether is a non-toxic, green fuel that burns cleanly. Its high cetane value, low combustion, and low-cost fueling system make it an impressive, low-cost diesel option that complies with stringent emissions regulations. Rising demand from major economies such as China and India, driven by various industrial applications and the pursuit of cleaner fuel alternatives, is fueling the high growth rate for the DME market in the region.

North America represents a major market for DME, driven primarily by robust demand from the transportation fuel and aerosol propellant segments. The U.S. stands out as a largest customer and producer in the region. A notable trend observed is the increasing adoption of DME as a cleaner and more environmentally friendly fuel alternatives, contributing to the market growth.

Europe is another significant market due to the robust growth in the automotive industry across European countries. Additionally, the usage of dimethyl ether in households contributes to market development. The Middle East & Africa and Latin America are expected to showcase steady growth during the forecast period driven by government initiatives to increase the usage of clean household fuel and its increasing use in the chemical industry.

In Latin America, the market is witnessing steady growth, with Brazil and Mexico emerging as key contributors. The demand in this region is fueled by applications in the aerosol and refrigerant industries. Whereas, the Middle East observes potential in using DME as a substitute for LPG in various applications with the petrochemical industry. In Africa, the market remains relatively small compared to other regions, constrained by limited production. South Africa emerges as the major consumer, however investment in these areas could unlock further opportunities for market expansion across the continent.

List of Key Companies in Dimethyl Ether Market

Key Companies to Conduct Research and Development Activities to Strengthen Their Market Presence

With a few players capturing a significant share, the global dimethyl ether market is fragmented in nature. Jiutai Energy Group (China), Haldor Topsoe, Oberon fuels (U.S.), CF Industries Holdings, Royal Dutch Shell Plc. (Netherlands), The Chemours Company (U.S.), Mitsubishi Corporation (Japan), and Toyo Engineering Corporation are some of the market's key players. Major industry players have combined their raw material manufacturing and delivery operations in order to maintain product consistency and expand regional reach, resulting in financial benefits through cost savings and increased profit margin.

LIST OF KEY COMPANIES PROFILED:

• Jiutai Energy Group (China)


• Haldor Topsoe (Denmark)


• Oberon fuels (U.S.)


• GRILLO-Werke AG (Germany)


• The Chemours Company (U.S.)


• MITSUBISHI GAS CHEMICAL COMPANY, INC. (Japan)    


• Toyo Engineering Corporation (Japan)


• Shell Global (U.K.)


• Nouryon (Netherlands)


• PCC Group (Poland)

KEY INDUSTRY DEVELOPMENTS:

• March 2023 – DCC plc collaborated with Oberon Fuels to enhance the design, building, and operation of various renewable DME manufacturing plants across Europe. The companies conducted an initial feasibility assessment, which revealed strong market demand for a sustainable alternative to Liquid Petroleum Gas (LPG).


• February 2020 – Oberon Fuels and SHV Energy teamed up to accelerate the usage of green DME in transportation fuels, lowering their carbon footprint.


• January 2021 – Mitsubishi Gas Chemical Company (MGC), Mitsubishi Corporation (MC), and Mitsubishi Heavy Industries Engineering (MHIENG) teamed up with the National Gas Company of Trinidad and Tobago (NGC) and Massy Holdings (Massy) to establish Caribbean Gas Chemical Limited (CGCL) in the Republic of Trinidad and Tobago. This joint venture marked the commencement of commercial operations for a methanol and dimethyl ether plant, contributing to industrial development.

REPORT COVERAGE

The report provides a detailed analysis of the market and focuses on crucial aspects such as leading companies, and products. Additionally, it offers insights into market trends and highlights vital industry developments. In addition to the factors mentioned above, the report encompasses various factors that have contributed to the market's growth in recent years. This report includes historical data and forecasts revenue growth at global, regional, and country levels, and analyzes the industry's latest market dynamics and opportunities.

Report Scope & Segmentation