Catalysts for Energy Market Trends

Growth Drivers

• EU chemicals strategy driving safe-by-design innovation: The EU Green Deal, along with ECHA’s Chemicals Strategy for Sustainability, highlights the necessity of transitioning to safer and more sustainable chemicals within industrial processes. Since the implementation of REACH regulations in 2010, there has been a significant reduction of 46% in substances identified as very high concern (SVHCs). This regulatory change compels manufacturers to substitute hazardous substances, thereby encouraging investments in alternative, environmentally friendly catalyst technologies. Consequently, there is an increasing demand for catalytic systems that comply with environmental standards across both the energy and chemical sectors. The strategy fosters a long-term structural transformation, ensuring that chemical production aligns with the objectives of a circular economy and zero-pollution initiatives.

• Technological innovation in greener chemical production: Innovations in catalytic technologies, including electrolysis-enabled feedstock conversion and chemical recycling, have greatly improved process efficiencies.  Research indicates that these advancements have increased reaction yields by as much as 21%, thereby minimizing raw material waste and decreasing operational expenses.  Consequently, this has resulted in more regular catalyst renewal cycles, fostering a steady demand in petrochemical and refining sectors.  Furthermore, greener catalysts contribute to emission reduction goals, assisting companies in achieving both economic and regulatory standards.  These advancements highlight the expanding significance of advanced materials in facilitating energy transition and chemical sustainability goals.

Challenges

• Market access barriers due to tariffs and trade policies: Import duties and non-tariff obstacles considerably impede the international trade of catalysts, with the WTO indicating average tariffs ranging from 8% to 10% on chemical imports between Asia and Europe. These obstacles postpone product introductions and elevate costs by as much as 12%, limiting market access for emerging suppliers. For instance, BASF faced a 6-month postponement in the introduction of new catalysts in China in 2022 as a result of extended customs approval processes, leading to a nearly 5% decrease in annual revenues.

• Infrastructure limitations affecting distribution and logistics: In developing markets, inadequate transportation infrastructure leads to delays in shipments, resulting in an increase in lead times by 30-40%. The World Bank emphasizes that ineffective logistics contribute an additional 15-20% to operational expenses in Southeast Asia, thereby disrupting supply chains within the refining and petrochemical industries. This situation disproportionately affects small and medium-sized suppliers, hindering their capacity to compete on a global scale and fulfill timely demand.