Consumption of Diesel Exhaust Fluid (DEF) across North America has been rising in recent years and is set to hit an industry milestone of one billion gallons by 2019, according to the newly published DEF Market Dynamics Report by Integer Research.
The rise of Selective Catalytic Reduction (SCR), an aftertreatment technology that requires the use of Diesel Exhaust Fluid to reduce harmful NOx emissions, is driving DEF demand in a rapidly expanding North American market that is now almost unrecognisable from just four years ago when DEF was in its infancy.
As demand races ever-higher there has been a shift in supply of the fluid from jugs and drums to larger bulk deliveries, and a tremendous increase in DEF truck stop locations. In fact, the number of DEF pump locations across North America has tripled in two years from 550 in mid-2012 to over 1,700 by June 2014.
In 2010, the US Environment Protection Agency (EPA) unveiled stringent emission standards, which prompted the entire medium- and heavy-duty truck market to deploy SCR. Most manufacturers wasted no time and immediately implemented the technology into their products. As of November 2014, almost all new trucks and buses in North America are SCR-equipped, and therefore require DEF.
"Our research shows that heavier trucks are by far the main drivers of DEF consumption in the region,” says Fabricio Cardoso, editor of The DEF Market Dynamics Report. “However, the light-duty and passenger car sector, as well as the off-highway sector, are adding to demand and we estimate overall consumption of DEF across North America to hit one billion gallons in 2019. Pickup trucks, sport utility vehicles (SUV) models and other diesel passenger cars and light-duty commercial vehicles are increasingly taking up SCR, meaning that the requirement for DEF across these sectors is also rising. The diesel market for passenger cars in North America is still marginal compared to gasoline engines, but rapidly expanding, as diesel cars allow better fuel savings and as public opinion towards diesel turns more positive.”
Another important sector consuming more and more DEF is off-highway equipment used in the agricultural, construction, forestry and mining industries. Strict emission requirements for these machines have led to OEMs taking a similar approach to the truck market and making SCR the aftertreatment technology of choice. The findings of Integer's DEF Market Dynamics Report reveal that DEF consumption from off-highway equipment is also likely to increase at a faster pace from 2017 onwards, particularly if the US government's flexibility scheme runs out and total equipment production will have to meet Tier 4 Final standards.
The report details how certain supply modes have been following diverse pricing patterns since the start of the market. For example DEF prices from truck stops have remained largely stable over the last two years, whereas bulk sales are much more volatile and dependent on urea prices and on the level of competition in a specific area. The unique DEF Market Dynamics Report from Integer Research brings industry players fully up-to-speed with DEF market developments that have occurred over the last four years.