RAE Environmentally Rubber Process Oil Market Size, Share, Growth, and Industry Analysis, By Type (High Content Polycyclic Aromatic Hydrocarbon (PAH) & Low Content Polycyclic Aromatic Hydrocarbon (PAH)), By Application (Tyre Products & Non-Tyre Products), and Regional Forecast to 2033

Last Updated: 08 January 2025

RAE ENVIRONMENTALLY RUBBER PROCESS OIL MARKET OVERVIEW

RAE Environmentally Rubber Process Oil Market size is anticipated to be worth USD 1.30 billion in 2024 and is expected to reach USD 2.5 billion by 2032 at a CAGR of 8.5%.

RAE (Residual Aromatic Extract) environmentally friendly rubber process oil is an aromatic, highly viscous oil obtained from the residue of the oil fractions. The product is specifically designed to meet the environment and performance expectations of the rubber market. Contains less than 10 ppm of Polycyclic Aromatic Hydrocarbon (PAH) and Benzo(a)pyrene of less than 1 ppm; it meets health and safety requirements and EU directives. This unique oil serves the purposes of an extender, a softener, and a diluent in rubber compounds, which greatly improves the efficiency and durability of the final product. Its superior solvency properties make it well suited for use with elastomers such as SBR and natural rubber; the compatibility and quality of the compounds remain very stable across its range of uses, most notably in tires, delivering good wet grip and reasonable rolling resistance.

GLOBAL CRISES IMPACTING RAE ENVIRONMENTALLY RUBBER PROCESS OIL MARKETCOVID-19 IMPACT

 RAE Environmentally Rubber Process Oil Industry Had a Negative Effect due to Lockdowns and Disruptions

The global COVID-19 pandemic has been unprecedented and staggering, with the market experiencing lower-than-anticipated demand across all regions compared to pre-pandemic levels. The sudden market growth reflected by the rise in CAGR is attributable to the market’s growth and demand returning to pre-pandemic levels.

The COVID-19 outbreak had a negative impact on this market because the market faced a variety of challenges attributable to the lockdowns and disruptions. The most significant effect was a drastic dampening of demand from restoring end-use industries, including automotive manufacturers, who encountered production and reduced car sales. This translated to lower demand for tires and other rubber parts that use process oils, among other applications. In addition, long-established and new COVID-19 control measures included travel limitations and lockdowns, which disturbed supply chains of raw materials and the finished products of rubber industries. This brought forth supply chain problems and dramatically augmented risk in the market. 

LATEST TREND

"Going Green to Propel the Market Growth"

The market for rubber process oil at present is enforcing a trend of going green and turning towards sustainable products. This has been led by higher standards of legislation on the utilisation of traditional AO with high percentages of PAHs that are considered carcinogenic to humans and affect the environment. Thus, the need for low-PAH and hexPAH or PAH-free materials, including naphthenic, paraffinic, and TDAE oils. Bio-based process oils originating from renewable material are also on the rise due to their relative sustainability. In addition, innovation in tire products with an eye on fuel saving and wet performance has led to the need and search for process oil that can enable the tires to achieve the above characteristics.

RAE ENVIRONMENTALLY RUBBER PROCESS OIL MARKET SEGMENTATION

BY TYPE

Based on Type, the global market can be categorized into High Content Polycyclic Aromatic Hydrocarbon (PAH) & Low Content Polycyclic Aromatic Hydrocarbon (PAH)

• High Content Polycyclic Aromatic Hydrocarbon (PAH): This category mainly consists of traditional materials obtained through crude oil processing, isolates, or resulting from the distillation of aromatic hydrocarbons. These oils are defined by their high aromatic components, which have good miscibility with some types of rubber, especially in the fabrication of tires. High PAH oils have excellent solvency capability, with enhanced filler dispersion and rubber compound processing. They could improve such tire characteristics as traction and wear resistance.
• Low Content Polycyclic Aromatic Hydrocarbon (PAH): These are aromatic oils that have been refined to have very low levels of polycyclic aromatic hydrocarbons, or PAHs. TDAE oils are resistant and have moderate acceptance of the environment, and therefore they are preferred for use in tire manufacturing. Like TDAE, the MES oils are a range of solvent extraction products with low levels of PAHs. These compounds offer acceptable degrees of miscibility with a wide variety of elastomers and have a wide rubber application.

BY APPLICATION

Based on application, the global market can be categorized into Tyre Products & Non-Tyre Products

• Tyre Products: This industry is the biggest consumer of rubber process oils all across the world. These oils find great application in the process of tire production and affect a number of parameters. They lend themselves to raising the volume of rubber compound, thus lowering general costs of manufacture. They enhance the flow of rubber and make it more manageable, better suited for blending and shaping.
• Non-Tyre Products: There are a wide range of applications for rubber process oils in tire industries other than automobiles. The major non-tire applications of rubber are automobiles, such as process oils that are used in other automobile rubber products, including hoses, seals, gaskets, and mountings. This includes conveyor belts, industrial hoses, rubber flooring, moulded rubber parts, other industrial products, and spare parts. Uses of process oils include shoe sole production and other parts of the shoe.

MARKET DYNAMICS

Market dynamics include driving and restraining factors, opportunities and challenges stating the market conditions.                  

DRIVING FACTORS

"Growth of the Automotive and Tire Industries to Expand the Market"

A factor in the RAE Environmentally Rubber Process Oil market growth is the Growth of the Automotive and Tire Industries. The rubber process oil market is, by its nature, highly dependent on the automotive and tire markets. Tires are one of the critical parts of automobiles, and rubber process oil has significant application in the tire industry. Hence, the growth of these industries is in a positive correlation with the demand for process oils. World car manufacturing is escalating courtesy of trends like higher human per capita income, an increase in lieu of urbanisation, and the need for personal transport, especially in the emerging markets. This means more consumption of tires and, in turn, more consumption of rubber process oils.

"Increasing Demand for Environmentally Friendly Products to Advance the Market"

Because of the awareness of environmental and health risks that the conventional aromatic oils with high PAH have, regulations have tightened globally. These regulations limit the utilisation of high-PAH oils and encourage the employment of other less harmful iconic oils. Coupled with customer awareness of low-PAH products and the regulation imposed by legislation restricting the use and application of high-PAH products, the trend toward low-PAH base oils such as TDAE, MES, naphthenic, and paraffinic is increasing. Other green materials include the bio-based oils, which are currently on the rise as a long-term green solution.

RESTRAINING FACTOR

"Strong Volatility of the Prices of Crude Oil to Pose Potential Impediments on this Market"

A strong determinant in the Advanced Packaging Market share is the strong volatility of the prices of crude oil. Petroleum sources of rubber process oils are dependent mainly on crude oil since most of them originate from it. Hence it is clear that large changes in the price of crude oil affect the costs of production for these oils. The manufacturers of process oils are compelled to follow the same because when the crude oil prices go up, it affects the price of the process oil as well. These increased costs are in turn reflected by the downstream industries across tire manufacturing and other rubber product industries. This further results in high price volatility, which is not only unsuitable for planning for the future and controlling expenses among businesses. 

OPPORTUNITY

"Bio-Based Process Oils to Create Opportunity in this Market"

One of the more notable major opportunity factors that can be expected in the rubber process oil market is the ongoing advances in bio-based process oils. Process oils derived from renewable resources, including vegetable oils (soybean, rapeseed, sunflower, etc.) and other plant-based materials, are particularly advantageous for reducing the current rising environmental issues caused by the conventional petroleum-based process oils. As market restrictions surrounding PAH content continue to tighten and as environmentally friendly products remain more and more in demand, bio-based oils are a viable solution. They have some inherent benefits, like they are biodegradable, less toxic in nature, and have relatively lower carbon footprints than the ordinary oils. 

CHALLENGE

"Tougher Ecological Standards to Pose Potential Challenge for this Market"

One of the prime issues, which is critical to the rubber process oil market, is the problem of increased emphasis being placed on performance characteristics on one hand and the tougher ecological standards that are being imposed on the other. Prior generation, aromatic process oils proved to have good compatibility with talc and other elastomers and provide good performance characteristics in finished rubber products such as tires, but these oils contain huge amounts of PAHs, which are hazardous to human health and the environment. This has developed stricter standards, namely in Europe and other developed areas, which has restricted the application of high-PAH oils and hence a push in the need for better solutions. 

RAE ENVIRONMENTALLY RUBBER PROCESS OIL MARKET REGIONAL INSIGHTS

• NORTH AMERICA 

In the localised and most developed North American market, which is dominated by the U.S., there is more emphasis on performance and fuel-efficient automobiles and tire industries. One of the primary markets for these RPOs is the United States Advanced Packaging Market, which has not only a big internal automotive industry but also a firmly developed market for tire replacement. However, similarly to performance and cost-effectiveness as opposed to Europe, these regulations already exist, so the current focus has been more towards it. Nevertheless, there is a tendency towards ensuring sustainability and using low-PAH oils primarily due to higher public awareness and increased state regulation (in particular, in California). 

• EUROPE

Current environmental standards for chemicals and rubber products have been trodden in Europe. Over the years, particularly due to increased use of polycyclic aromatic hydrocarbons (PAHs), regulation such as the one recently adopted by the European Union through REACH. This has prompted a quick transition from high-PAH oils to low-PAH ones such as TDAE and MES and a developing interest in bio-based oils. Consumers in Europe are also very conversant with environmental issues; this will also help to fuel the call for eco-friendly products. The detailed and comprehensive topics in this area include tire labelling and performance, which determine the formulation of certain process oil. 

• ASIA

Indeed, Asia is the largest and fastest-growing market for rubber process oils globally due to growth in industrialisation, rising automobile production, and consumer growth. Tire production, coupled with other rubber products, makes China a leading consumer of process oils due to its status as the largest manufacturer. The automotive and tire industries in the region are also growing very fast, pulling the demand for process oils higher in India. Thus, although some Asian countries are putting into place stringent environmental controls, the emphasis has been comparatively more on economies and rising needs for challenging articles of rubber. 

KEY INDUSTRY PLAYERS

"Key Industry Players Shaping the Market through Employment of ""Product Innovation"

Almost all the activity in the rubber process oil market is influenced one way or another by key industrial participants. In the first place, major oil refineries and petrochemical companies, who are process oils’ main producers, depend on their production capabilities, pricing policies, and product innovation. These choices of process oils in which they should focus, including high-PAH and low-PAH, naphthenic, and paraffinic, affect market availability and pricing. Secondly, the large tire manufacturers who consume most of the process oils are themselves major buyers and thus have large bargaining power. Their needs and preferences for the performance and environmental compliance of various oils affect the strategies and shape of product development and the evolution of the global process oil market. These tire manufacturers often buy process oils from suppliers with whom they negotiate for a formulation that fits the manufacturer’s needs. Thirdly, specialised chemical companies and additive suppliers, who are responsible for the creation of additives and modifiers used to improve the self-variables of process oils. This kind of additive can enhance those properties such as viscosity, compatibility of crosslinked elastomers, and low-temperature performance.

LIST OF TOP RAE ENVIRONMENTALLY RUBBER PROCESS OIL COMPANIES

• Shell (U.K.)
• H&R Group (Germany)
• Eni S.p.A. (Italy)
• Repsol (Spain)
• Orgkhim Biochemical Holdings (Russia)

KEY INDUSTRY DEVELOPMENTS

September of 2023: In September of 2023, Nynas introduced a new naphthenic oil that is perfect for tire making known as NYTEX BIO 6200. Coating adjuvants are important for this reason: this specific product is a bio-based extender oil, which is made from renewable resources. NYTEX® BIO 6200 responds to the new industry direction towards bio-based and environmentally responsible agents. Thereby it minimises its dependency on fossil fuels, besides adopting environmental means of production, hence cutting down on the emissions of carbon monoxide typical of tire production.

REPORT COVERAGE

The study encompasses a comprehensive SWOT analysis and provides insights into future developments within the market. It examines various factors that contribute to the growth of the market, exploring a wide range of market categories and potential applications that may impact its trajectory in the coming years. The analysis takes into account both current trends and historical turning points, providing a holistic understanding of the market's components and identifying potential areas for growth.

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