Introduction
What do your toothpaste, the pages in your notebook, biocides, and concrete additives have in common? They're all products of an oleochemical plant.
The term oleochemicals refers to the category of chemicals derived from plant and animal fats. It is an umbrella term for all the valuable products and by-products obtained from certain value chains in the oils and fats processing industry. Think fatty acids, fatty acid methyl esters (FAME, or biodiesel), fatty alcohols, fatty amines, and glycerol, produced using different enzymatic and chemical reactions. Each of these chemical varieties has applications across industries, like pharmaceuticals, agrochemicals, cosmetics, soap, detergent, paint, and personal care.
Essentially, what petrochemicals are to petroleum, oleochemicals are to plant- and animal-based oils and fats.
The global oleochemical market
According to the IMARC Group, the global oleochemical market size touched USD 25.8 billion in 2023. With a projected compound annual growth rate (CAGR) of 5.9% between 2024 and 2032, the market is expected to attain a value of USD 44 billion by 2032. Meanwhile, Mordor Intelligence predicts that the Asia-Pacific region will dominate the oleochemical market.
To what might we attribute this promising oleochemical market growth? The increasing focus on sustainable products, driven by limited fossil fuel reserves, high crude oil prices, and harmful greenhouse gas emissions (GHG) from fossil fuel combustion. Oleochemical plant operators rely on renewable feedstocks for oleochemical production. These raw materials are relatively inexpensive, have minimal toxicity and low environmental impact, and are highly biodegradable. As we'll soon discuss, oleochemical production companies use non-edible oils and waste or by-products from animal fat or vegetable oil production. This means that rather than competing with food industries for limited edible oilseed yields, oleochemical plants are supplementing the value generated by them.
We have also witnessed demand growth for specific oleochemical categories. Take biolubricants, for instance. Historically, lubricants have been produced using mineral oil, contributing to a market demand of 41.7 million tonnes globally in 2015. But environmental concerns led to policy interventions like the EU's European Ecolabel for Lubricants and the Waste Framework Directive 2008/98/EC, incentivising green products and the protection of human health. Such measures have contributed, in no small degree, to the growth of the biolubricant industry. With the promise of lower environmental impact and better lubrication properties, the biolubricants market grew 10% annually on average in the decade leading up to 2019.
The oleochemical industry in India
The Indian oleochemical market touched USD 1.76 billion in 2023, according to a market report by TechSci Research. For the forecast period 2024-2029, the report projects a CAGR of 3.76%. Growth for oleochemical companies in India is driven by the same factors that govern global growth. Additionally, easy availability of raw materials, increasing disposable incomes, population growth, and government support are fuelling the oleochemical industry not only in India but in the entire Asia-Pacific region. The Solvent Extractors Association (SEA) of India also highlights that there have been significant investments and capacity expansion for oleochemical production in India in the past decade. Key oleochemical companies in India include VVF (India), Godrej Industries, 3F Industries, Indo Amines, and Universal Biofuels.
Despite the contribution of the oleochemical industry to economic growth and reducing GHG emissions, there are certain obstacles to sustainable oleochemical production. For starters, the industry depends on agriculture for its raw materials. This means that there are often fluctuations in raw material availability and pricing. Additionally, dependence on agricultural cultivation translates to concerns about deforestation and its consequent impacts on society and biodiversity. For long-term success, it is crucial for oleochemical plant operators to maximise the value generated by the oleochemical production process while minimising its adverse impacts.
Industrial applications of oleochemicals
Most people don't know what oleochemicals are because these products are never sold directly to consumers. Instead, the oleochemical production process is designed to provide important inputs to industrial activities. Cosmetics, home and personal care, oil exploration, concrete additives, paper, perfumery, agrochemicals, animal feed, biocides, pharmaceuticals, textile, and lubricant and grease industries all rely on oleochemicals.
For instance, the oleochemical linoleic acid is perfect for applications that require both wetting and drying; it is used to make paints, printing ink, caulk, and other sealants. Dimer acid, which lends properties of improved bonding, is used in paints, inks, epoxy hardeners, to increase the longevity of nylon products, and in lubricants. Monomer acids find applications in resins, while distilled fatty acids are extremely useful in producing detergents, soaps, lubricants, and surfactants, with applications also in the textile industry.
The oleochemical production process
Oleochemical production is a complex process which involves demanding separation and purification techniques. This is because, down the value chain, manufacturers usually want to produce multiple intermediate and end products of specific purities.
Accordingly, oleochemical manufacturing involves a range of processes. You can obtain fatty acids by splitting triglyceride molecules into fatty acids and crude glycerine. Transesterification of glycerine with methanol (or another alcohol) yields biodiesel. Both these processes also yield glyceric aqueous solutions, which are processed to obtain glycerine of varying grades or purities. It is also possible to produce glycerin by the process of saponification. Essentially, regardless of what the final product is, fatty acids are always produced in the intermediate steps, either as a pure fraction or a distilled mixture.
In general, an oleochemical plant will have sections for pretreatment, splitting, straight distillation, heating systems, fractional distillation, sweetwater treatment and concentration, wet fractionation, hydrogenation, flaking, glycerin distillation and refining, and glycerin recovery.
Raw materials, or feedstocks, required in the oleochemical production process
Feedstocks for oleochemical plants generally vary based on geography, local availability, pricing, and desired carbon chain length. Oleochemical manufacturers could theoretically use soybean oil, sunflower oil, cotton oil, rapeseed oil, lard, tallow, butter, fish oil, or poultry fat as raw material. But in industrial scale production, the most widely used feedstocks are usually high FFA and non-edible grade tallow, lard, palm oil, palm kernel oil, acid oil, and fatty acid distillate from oil refining facilities.
Trends in feedstock choices
Currently, oleochemicals are largely manufactured from plant oils. But as the demand for personal care, cosmetics, cleaning, and other oleochemical-based products increases, so will the demand for oleochemicals themselves. Oilseed production is already under stress because of the high demand from edible oil industries. Therefore, the demand for oleochemicals may not be met by traditional feedstocks.
Oleochemical plant owners and operators are already switching to using byproducts or waste products from the edible oil processing industry. Additionally, research shows that even microbial lipids - produced from oleaginous yeasts - may serve as appropriate industrial feedstocks to manufacture wax esters, biolubricants, and other fatty acid-based oleochemicals. Such feedstocks could be obtained from different agricultural residues and industrial side streams. This approach completely sidesteps the competition of oleochemical production with food production.
Setting up an oleochemical plant
As you embark on a journey to set up a new oleochemical production plant, you must understand the above market forces and technological trends deeply. Like the biofuels industry, the oleochemicals industry is also on the cusp of transformation. This evolution is being driven by capacity expansion and R&D investments, which, in turn, are being driven by the changing climate, environmental concerns, and the demand for cleaner, healthier, and safer consumer products. So, as you take your next steps in this industry, be sure to understand not only your customers but also your customers' customers. That is, at the end of the day, the secret to success in the oleochemicals industry.
