Pyrolysis Oil Market - Forecasts from 2024 to 2029

The pyrolysis oil market is expected to grow at a compound annual growth rate (CAGR) of 8.34% during the forecast period (2024-2029).

The pyrolysis oil market is a renewable bioliquid used as a sustainable alternative to fossil fuels to produce renewable energy and chemicals. Multiple raw material sources like plastic, rubber, wood, biomass, oil sludge, and other materials can produce it. It is the end product of waste tire and plastic pyrolysis. There have been multiple advantages to the pyrolysis oil over furnace oil. Pyrolysis fuel oil has a low density and viscosity compared to furnace oil; therefore, it is not required for preheating. The calorific value for pyrolysis fuel oil is almost equal to or higher than that of furnace oil. The sulfur content is way lower than that of furnace oil, hence lower sox pollution. It doesn't require any type of blending with furnace oil and can be used directly for burning applications, eventually saving 5-10% against furnace oil.

The major driving factors behind the pyrolysis oil market growth are the rising adoption of eco-friendly fuel for the circular economy, high demand from the heat and power generation sectors, and its multifaceted usage in industrial applications. Although the demand for pyrolysis oil is growing, technological manufacturing and application are still difficult, but growing innovation and advancements will make usage much simpler in the future.

With the view of keeping the circular economy, Clariant launched a portfolio for purifying pyrolysis oil in October 2022. Its new HDMax catalysts and Clarit adsorbents are designed to purify pyrolysis oil made from hard-to-recycle mixed plastic waste. It is designed to remove a wide range of contaminants that are continuously changing in the feed. It also offers operational assistance, from startup to process optimization, for the lifetime of the product.

Further, LyondellBasell had been selected to receive a €40 million grant from the European Union (EU) funding in December 2023. This grant was given to 41 projects selected in the EU Innovation Fund 'Third Call for Large Scale Projects', and the company's MoReTec plant was selected. The MoReTec technology by LyondellBasell can recycle polyolefin waste to produce pyrolysis oil and pyrolysis gas. Pyrolysis oil is a substitute for fossil-based materials used in polymer production. The plant would be located at the Wesseling, Germany site. This was one of the projects in which the European Union committed EUR 3.6 billion as part of clean-tech projects to support decarbonization and sustainability.

PYROLYSIS OIL MARKET DRIVERS:

• Rising adoption of eco-friendly fuel

According to several research studies, the calorific value of pyrolysis oil is quite comparable to other forms of fuels like diesel and gasoline. This makes it a viable option for replacing other types of fossil fuels. Therefore, it can be a possible alternative fuel. Application of pyrolysis oil includes combustion in boilers, fuelling in engines and turbines, upgrading to transportation fuels, or other burning fuel replacements.

Industries could move towards a more sustainable and circular economy by substituting conventional oils with renewable oils. There has been a growing depletion of fossil fuels as a resource. Several traditional oil companies are moving towards the renewable oils sector. In July 2023, Aramco, TotalEnergies, and SABIC successfully converted oil from plastic waste into ISCC+ certified circular polymers. The plastic pyrolysis oil was processed at the SATORP refinery in Jubail, which Aramco and TotalEnergies jointly own. The Kingdom of Saudi Arabia is paving the way for a circular economy by capitalizing on creating a domestic value chain for recycling plastics and circular polymers.

• High demand for the heat and power generation sectors

Growing industrialization around the world demands power for various purposes. The use of pyrolysis oil in the power generation is for combustion in boilers or furnaces and co-firing with other fuels. Hydrolysis oil's advantages are renewability, waste management, and carbon neutrality. Pyrolysis oil is derived from renewable waste sources, thus contributing to the sustainability of the production. The production of pyrolysis oil solves the world's largest waste management crisis. It also provides a carbon-neutral option for industries, as the amount of carbon produced is equivalent to what is absorbed during production.

In September 2022, BASF SE and ARCUS Greencycling Technologies GmbH in Germany agreed to purchase pyrolysis oil from mixed plastic waste. The companies agreed to have a value chain for using plastic waste that is not recycled mechanically in the sense of a circular economy and reducing CO2 emissions. ARCUS would supply BASF with pyrolysis oil. On the other hand, BASF would use the oil in its production plants as a raw material to produce Ccycled(TM) products. The agreement foresees having 100,000 tons of pyrolysis oil per year.

• Multiple industrial applications

Pyrolysis oil has multiple industrial uses. Major applications have been fuel for boiler heating and power plants. There has been a growing demand in the marine fuel market. Marine transportation needs huge amounts of low-carbon fuels for a sustainable future. Bio-oil like pyrolysis oil can be used to produce bitumen.

Further, bio-oil can be used to produce zinc oxide as a thermal source. The bio-oil is used in kiln burners for heating. Because it has a higher water and oxygen content, it can be used for bitumen production, for chemicals from its lignin derivative fraction, and as chemicals from its cellulose/hemicellulose derivative fraction.

Pyrolysis Oil Market Geographical Outlook

• The Asia Pacific region will dominate the pyrolysis oil market during the forecast period.

The major economies like China, Japan, India, and South Korea dominate the Asia-Pacific region. Some of the fastest-growing emerging economies, such as ASEAN countries, are from this region. In February 2024, APChemi launched the PUREMAX(TM) Pyrolysis Oil Purification Plant in Mumbai, India. The company has a vision of upcycling single-use plastic waste. This plant would have the TRL9 pyrolysis oil purification technology. It can produce 1.5 to 6 Kilo Tonnes per Annum (KTA) of high-quality purified pyrolysis oil, PUROIL. It enables the conversion of contaminated or mixed plastic waste into PUROIL. The company planned to upgrade the production capacity by 3 to 5 times by the end of 2025.

Further, China has shown rapid economic transformation in the last few years and has made the country evolve into a dynamic transformation of its power and manufacturing sector, with a substantial focus on energy generation. This led to Chinese companies using biofuels in their industrial growth among the fastest-growing markets worldwide. This growth would lead to its supply of biofuels all over the world.

Pyrolysis oil market restraints:

• The pyrolysis oil manufacturing, storage, and transportation technology is difficult to recreate and build. The advanced sophistication of the technology needed is a barrier for new entrants and difficult to recreate by small players. Big players in the market have the advantage of market control as they can easily source the manufacturing process and market it.
• Certain technical difficulties like incompatibility with different plastic types, low oil yield, and contamination issues led to the pyrolysis oil having to be heavily diluted with petroleum-based mixtures. It may be up to a ratio of over 40:1.

Pyrolysis oil market key developments:

• In April 2024, For the application of advanced chemical recycling, Neste conducted the first run of manufacturing of the pyrolysis oil derived from discarded tires, which was processed into high-quality raw material for chemicals and plastics at Neste's refinery in Porvoo, Finland. Swedish supplier Scandinavian Enviro Systems would supply it. The facilities will come into effect in 2025 and could process 150,000 tons of liquefied plastic waste per year. The process is applied for hard-to-recycle plastic waste. The aim of Nestle's pilot project would be the potential to recycle beyond plastic waste to potentially broaden the pool of waste streams that could be processed into high-quality products.
• In January 2024, Shell planned to upgrade and process pyrolysis oil made from plastic waste in its new plant at Moerdijk, Netherlands. Shell Chemicals and Braskem collaborated to increase the amount of circular content used in Braskem's production of polypropylene. This upgrader could process up to 50,000 tonnes of pyrolysis oil a year. It would remove the impurities from pyrolysis oil to produce higher-quality feedstock for chemical production. This agreement would provide Shell's technology and infrastructure with Braskem's polymer expertise to more sustainable and scalable solutions. Both companies are working for plastic waste recovery, and mechanical and chemical recycling for a more circular and sustainable future.
• In October 2023, With the growing importance of pyrolysis oil in the global economy, the ICIS, a global source of commodity intelligence, launched Pyrolysis Oil Pricing Indexes for the consumer demand for the pricing of chemical recycling outputs. ICIS would be the first market player to provide this pricing index. This service currently includes key feedstocks for pyrolysis oil mixed polyolefin bales and high plastic content refuse-derived fuel bales. Introducing a pricing index for pyrolysis oil would give visibility across key chemical recycling chains. Consumer and investor pressures, in addition to increasing regulations, are driving the chemical industry's transition to a circular economy.

The Pyrolysis oil market is segmented and analyzed as follows:

By Application

• Fuels
• Chemicals
• Others

By Raw Material

• Plastic
• Rubber
• Wood
• Biomass
• Oil Sludge
• Others Materials

By Process

• Fast Pyrolysis
• Flash Pyrolysis
• Slow Pyrolysis

By Geography

• North America
• USA
• Canada
• Mexico
• South America
• Brazil
• Argentina
• Rest of South America
• Europe
• United Kingdom
• Germany
• France
• Italy
• Spain
• Rest of Europe
• Middle East and Africa
• Saudi Arabia
• UAE
• Rest of the Middle East and Africa
• Asia Pacific
• China
• India
• Japan
• South Korea
• Taiwan
• Thailand
• Indonesia
• Rest of Asia-Pacific