The auto catalyst market is facing a profound transformation

The autocatalyst market is slowly recovering. However, market participants recently stated that although demand is no longer as sharply reduced as in the past few years, the autocatalyst industry is facing a profound transformation under the challenges of the rapid development of new energy vehicles and the adjustment of global regulatory policies.

The auto catalyst market is slowly recovering

Market participants said that the auto catalyst market is slowly recovering with the auto market.

"Demand for autocatalysts has fallen sharply over the past two years due to semiconductor shortages," said Christian Juz, senior vice president of BASF's Automotive Emissions Catalysts business. "Other factors have also caused more supply chain disruptions, such as the Russian-Ukrainian conflict and Fukushima. Earthquake. Demand for autocatalysts remains challenging this year, but year-on-year growth in global autocatalyst demand is expected to be possible this year as long as there are no additional, unforeseen negative factors.”

Johnson Matthey is a supplier of catalysts for new vehicles. John Goodwin, the company's marketing manager, said: "Over the past two years, demand for autocatalysts has fallen significantly. In the second half of the financial year ending March 31, 2022, Johnson Matthey produces 100% of automotive emissions catalysts. The clean air business has been hit the hardest. However, now we have seen a partial recovery in demand. From the signals from corporate customers, things have improved this year, but there may still be some unexpected headwinds.”

Sebastian Merrick, Solvay's vice president of technology solutions, said that despite clearly unmet demand, the automotive industry is likely to be the only industrial/consumer market that has not fully recovered to pre-COVID-19 levels. "Easing chip shortages, easing logistical challenges, coupled with China's efforts to stimulate gasoline-powered vehicles, may provide a glimmer of hope for the autocatalyst market in the second half of 2022 and into 2023," Merrick noted.

Another challenge that has emerged recently is the rise in fuel prices triggered by higher oil prices. Given the current high volatility, uncertainty, complexity and ambiguity in fuel prices, it is difficult to predict how the situation will play out, but the threat of inflation and other macroeconomic pressures to disrupt autocatalyst demand is increasing, according to BASF's Jouzes. big. Solvay said it has yet to find a clear link between soaring fuel prices and demand for autocatalysts.

The rise of new energy vehicles brings fundamental changes

Goodwin believes that many global challenges are currently affecting the demand for auto catalysts, such as environmental protection. "The global ambition of net-zero emissions is not going to change, it's a priority for many countries," Goodwin noted. This could fundamentally change the autocatalyst market.

Alternate fuels are slowly replacing traditional fuels, and they may eventually replace gasoline, says Jouz. This development will fundamentally change the need for autocatalysts. There are a lot of scenarios going forward, and market forces will drive changes in the autocatalyst portfolio, according to Jouzes. Synthetic fuels from sustainable energy sources will require autocatalysts, a solution that can leverage existing infrastructure. Fuel cells, on the other hand, will not require existing autocatalysts, but rather electrocatalysts. The anode and cathode in a fuel cell are catalysts containing precious metals. "We will leverage our deep expertise in precious metal catalysis to participate in this growing market. No matter how the market evolves, we will be ready to meet the innovative needs of our customers," said Juuz.

Merrick said Solvay would be ready for a market where emissions from a hydrogen-fueled or electronic-fueled combustion engine would require an exhaust aftertreatment system as usual. Goodwin said the environmental push from alternative fuels is clear, and as long as there are internal combustion engines that use these fuels, there will be a need for auto catalysts.

Andy Walker, technical marketing director of Johnson Matthey, said that the penetration rate of pure electric vehicles is increasing, and it will continue to increase in the passenger car market in the future, and it will also start to increase in the truck market. Walker pointed out: “We see that fuel cell electric vehicles have many of the same components as BEVs in terms of electric motors. We think BEVs and FCEVs will continue to be popular over the next 10 years. Over time, we will Eventually we will see a decline in autocatalyst demand, but the rate of decline will vary by region. In general, we are seeing electrification trends in the commercial vehicle industry later than in the passenger vehicle industry, which has seen Significant popularity of pure electric vehicles.”

Tighter regulatory policies drive industry innovation

Regulation is another factor driving innovation in the autocatalyst industry, market players said, with stricter fuel and emissions rules reshaping the future of the industry. BASF said it intends to work with customers to meet these stricter regulations. "Regulation continues to be a key driver of our market, and our strategy reflects corresponding developments. We develop and execute advanced technology roadmaps that enable our customers to meet stricter regulatory requirements. Our advanced Technology can be tailored to meet stricter emissions regulations for alternative fuels, including biofuels."

Merrick said: "Future exhaust emission regulations will require longer lasting performance under real driving conditions. These advances require stable, efficient catalyst systems for which we have state-of-the-art materials. Our R&D activities are revolving around automotive catalysts. efficiency, durability and cost-effectiveness. We are also ready to move to hydrogen fuels, e-fuels, fuel cells and batteries with a dedicated R&D team and platform.”

Goodwin said the clean air business remains Johnson Matthey's largest business and the company will continue to invest in innovation to meet stricter regulatory requirements to be introduced in the EU, the US and China and India.