Increase in Diesel cars drives market says Frost & Sullivan

The efficiency of the diesel engine, the vehicles' lower prices compared to

their gasoline equivalents and evolving fuel taxation policies have

resulted in a higher penetration of diesel vehicles in some European

countries.  This increase in the number of cars has compensated for their

improved fuel economy and so, consumption of diesel fuel in Europe is

forecast to increase by over 2% per year to 2008.  According to new

research by international market analysts Frost & Sullivan, this will have

a positive effect on the diesel fuel additive market, which is valued today

at $260 million and is forecast to grow with a compound annual growth rate

of 5% to reach $367 million by 2008.


The other main driver for this market is European Legislation.  EC

directive 98/70/EC states that from 2005 sulphur content should not exceed

50 parts per million (ppm) in diesel fuels sold around Europe.  This has

been introduced owing to the harmful effects of Sulphur compounds on human

health and their negative impact on some catalytic convertors.  However,

when sulphur is removed from fuel some of the fuel's natural lubricating

properties are also removed.  Lubricity improver additives are used to

counteract this effect and the legislation will thus herald a growth period

for lubricity improver additives.



Owing to increased pressure across Europe concerning emissions reduction

and fuel economy improvements, cetane improvers which aid ignition, improve

combustion and reduce emissions will also enjoy a period of growth

forecasts the report.  However, in the longer term refineries may choose to

meet these requirements by modification of the production process.



All in all this spells good news for the diesel fuel additive companies who

will enjoy a period of growth.  However, with continued consolidation of

the oil industry there will be fewer customers with increased buying power.

Moreover, the harmonisation of specifications within the EU will lead to an

easier pan European purchasing strategy, which in the longer term could

push prices down and make it more difficult to increase market share



The report gives a comprehensive view of the Diesel and Gasoline fuel

additives market in Europe.  Key forecasts for each additive, competitive

analysis, pricing and volume trends are all discussed.