Activated Carbon Market Trends

Growth Drivers

• Increase in demand for water purification solutions: The lack of clean water globally has driven the demand for activated carbon in water purification and treatment of wastewater to a significant level. Hence, these applications are expected to grow at a high rate in urban areas because the population and industries are increasing at a higher rate in these areas. In March 2023, Evoqua Water Technologies LLC acquired Kemco Systems' industrial water treatment business, positioning itself strongly in the competitive activated carbon market. These strategic steps highlight the growing reliance on activated carbon towards solving worldwide water challenges commensurate with strict standards set for the environment.
• Growth in air filtration applications: The overall increasing levels of air pollution on the planet hastened the increased usage of activated carbon in air filtration systems. Its ability to trap pollutants, harmful gases, and odors makes it an indispensable component in improving air quality. This demand is particularly acute in regions with dense urban populations and industrial activity. In October 2022, Cabot Corporation announced a global price increase for its specialty carbon black products, reflecting the growing pressure on supply chains to meet surging demand. This trend underlines the material's importance in furthering environmental and public health initiatives.
• Development of energy storage technologies: Activated carbon is also witnessing rapid adoption in energy storage applications, especially lithium-ion batteries. Large surface area and conductivity, provided by activated carbon, are needed to improve the performance and efficiency of batteries. This demand is further enhanced by the sudden growth of the renewable energy sector, which has sparked a need for more advanced energy storage solutions using activated carbon. In August 2022, Ingevity announced a USD 60 million investment to develop lithium-ion anode materials and simultaneously firmed up a supply agreement with Nexeon. This strategic investment underlines the increasingly important synergy between the production of activated carbon and sustainable energy innovation. 

Challenges

• Environmental concerns about raw material sourcing: Raw materials used in the production of activated carbon, including coal, coconut shells, and wood, have been increasingly scrutinized for environmental reasons. Processes are commonly linked to deforestation, loss of biodiversity, and a significant contribution to carbon emissions. These issues have sparked the demand for greener sourcing and production methods, however, balancing environmental responsibility against growing global demand is one of the most important challenges that manufacturers of activated carbon face.
• Regulatory barriers and compliance costs: Strict environmental regulations concerning the production and disposal of activated carbon also present considerable problems for manufacturers. Compliance generally implies cleaner technologies, lower emissions, and safe handling of waste products. While these are essential, they increase operational costs and may present a barrier to survival for small players in the activated carbon market. Differences in regional regulations further complicate production and export issues for global manufacturers. Surmounting these challenges will require ongoing innovation and investment, straining resources in an already competitive market.