Crude Tall Oil Market – Global Industry Size, Share, Trends, Opportunity, and Forecast, Segmented By Product (Tall Oil Rosin, Tall Oil Fatty Acids, Distilled Tall Oil, all Oil Pitch, Others), By Application (Adhesive, Inks & Toners, Partings & Coatings, Hygiene Products, Others), By End User (Automotive, Chemicals, Metalworking, Electronics & Electricals, Others), By Region, By Competition, 2021-2031F

Forecast Period	2027-2031
Market Size (2025)	USD 2.41 Billion
CAGR (2026-2031)	4.12%
Fastest Growing Segment	Automotive
Largest Market	North America
Market Size (2031)	USD 3.07 Billion

Market Overview

The Global Crude Tall Oil Market will grow from USD 2.41 Billion in 2025 to USD 3.07 Billion by 2031 at a 4.12% CAGR. Crude Tall Oil, often abbreviated as CTO, is a viscous by-product of the Kraft pulping process in paper manufacturing, composed primarily of fatty acids, rosins, and neutral compounds. The market is principally driven by the escalating global demand for renewable biofuels, particularly renewable diesel and sustainable aviation fuel, alongside the enduring requirement for bio-based chemicals in applications such as adhesives, inks, and coatings. These drivers structurally support the market's upward trajectory as industries increasingly pivot toward sustainable, non-fossil feedstocks to comply with stringent environmental mandates and carbon reduction goals.

However, the market faces a significant impediment regarding feedstock availability since CTO production is inelastic and entirely dependent on the operational output of the softwood pulp industry. This supply constraint effectively limits production volumes regardless of rising downstream demand. According to the Finnish Forest Industries Federation, in 2024, Europe remained the dominant market area for forest industry exports, accounting for 59 percent of the total export value. This statistic underscores the market's heavy reliance on established European pulping infrastructures and the regional concentration that dictates global supply chain dynamics.

Key Market Drivers

The rising global demand for sustainable biofuels and renewable diesel acts as the primary catalyst for the Crude Tall Oil market, as the energy sector aggressively shifts toward low-carbon feedstocks. Refineries utilize this biomass residue to produce Hydrotreated Vegetable Oil and Sustainable Aviation Fuel, essential for meeting carbon reduction targets in transportation. This escalating requirement has compelled major industry players to maintain high processing capabilities to ensure consistent feedstock delivery. According to SunPine, in 2024, the company operated with an annual production capacity of approximately 200,000 tons of raw tall diesel at its Piteå facility to serve the European market. The momentum in this sector is further validated by robust downstream consumption figures. According to Neste, February 2025, in the 'Financial Statements Release 2024', the sales volume of renewable products increased to 3.73 million tons for the full year, highlighting the critical role of waste and residue streams in the global energy mix.

Concurrently, the increasing adoption of bio-based chemicals as petrochemical alternatives significantly propels market development. Manufacturers of adhesives, inks, and coatings are actively transitioning toward pine chemical derivatives obtained through fractionation to reduce reliance on fossil-based ingredients and improve product sustainability profiles. This industrial pivot encourages substantial capital expenditure in biorefining infrastructure to enhance yield and efficiency. For instance, according to Kraton Corporation, June 2025, in the '2024 Sustainability Report', the company finalized a $35 million investment to improve crude tall oil biorefinery towers at its Panama City facility. Such strategic enhancements allow fractionation companies to better cater to the growing requirement for sustainable fatty acids and rosins in diverse industrial applications.

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Key Market Challenges

The inelastic nature of feedstock availability constitutes a critical structural challenge impeding the growth of the Global Crude Tall Oil Market. Because Crude Tall Oil (CTO) is generated exclusively as a byproduct of the Kraft pulping process, its supply is rigidly tethered to the operational output of the softwood pulp industry rather than market demand for the oil itself. Producers cannot independently scale extraction volumes to capitalize on the surging requirements from the renewable diesel and sustainable aviation fuel sectors. Consequently, when the primary paper and pulp industry experiences stagnation or decline due to digitalization or economic shifts, the availability of CTO immediately constricts, creating a supply bottleneck that stifles potential market expansion.

This dependency renders the market vulnerable to fluctuations in the parent industry, effectively capping growth despite robust downstream interest. This impact is illustrated by recent production contractions in key manufacturing regions. According to the Finnish Forest Industries Federation, in the third quarter of 2025, pulp production totaled 1.6 million tonnes, representing a decline of 13.7 percent compared to the same period in the previous year. Such significant reductions in primary pulp output directly limit the recoverable volume of CTO, thereby hampering the industry's ability to secure sufficient feedstock to meet global renewable energy targets.

Key Market Trends

The integration of Crude Tall Oil into Sustainable Aviation Fuel (SAF) value chains is fundamentally reshaping refinery operations, pushing producers to retrofit existing hydrotreating units for higher-margin aviation outputs. Unlike earlier biofuel applications focused on ground transport, this trend involves complex technical modifications to desulfurization and dearomatization units to handle the specific chemistry of tall oil while meeting strict jet fuel standards. This operational pivot allows refineries to maximize the value of limited biomass streams by targeting the burgeoning aviation sector. According to Preem, June 2025, in the press release 'Preem triples renewable production capacity with Synsat rebuild in Lysekil', the company inaugurated its rebuilt Synsat facility which expanded renewable production capacity by approximately 900,000 cubic meters annually, directly enabling large-scale co-processing of renewable raw materials for aviation and diesel markets.

Simultaneously, the market is witnessing a wave of strategic alliances and asset acquisitions aimed at securing feedstock access and optimizing vertical integration. As supply inelasticity intensifies competition, specialized pine chemical companies are acquiring dedicated refining assets to control the processing value chain from raw material to finished derivative, ensuring consistent throughput despite fluctuations in pulp mill output. This consolidation allows firms to insulate themselves from volatility and capture specialized market segments. For instance, according to Ingevity Corporation, September 2025, in the press release 'Ingevity announces agreement to sell North Charleston crude tall oil refinery and majority of Industrial Specialties product line to Mainstream Pine Products', the company entered into a definitive agreement to divest its crude tall oil refining assets for approximately $110 million, effectively transferring processing control to a focused industry player to enhance operational focus.

Segmental Insights

The Automotive segment is currently the fastest-growing end-user category in the Global Crude Tall Oil Market, driven by the increasing necessity for sustainable mobility solutions. This growth is primarily fuelled by the rising adoption of Crude Tall Oil derivatives, particularly Tall Oil Fatty Acids, in the production of renewable diesel and bio-based lubricants. These materials enable manufacturers to reduce carbon emissions while maintaining engine performance. Furthermore, regulatory frameworks such as the European Union’s Renewable Energy Directive (RED II) are accelerating this trend by mandating higher concentrations of advanced biofuels in transportation, thereby securing the segment's rapid expansion.

Regional Insights

North America maintains a leading position in the global crude tall oil market, driven by a robust pulp and paper manufacturing sector. The region benefits from abundant softwood feedstock availability, which is essential for the kraft pulping process that generates this by-product. Additionally, well-established fractionation infrastructure enables the efficient conversion of crude tall oil into renewable diesel and biochemicals. Favorable frameworks from entities like the United States Environmental Protection Agency promote the utilization of bio-based materials, further supporting regional market expansion. This alignment of raw material supply and industrial capability sustains North American dominance.

Recent Developments

• In September 2025, Ingevity Corporation entered into a definitive agreement to sell its crude tall oil refinery assets in North Charleston, South Carolina, to Mainstream Pine Products. The transaction, valued at approximately $110 million in cash plus potential contingent payments, also included the divestiture of the majority of the company's industrial specialties product line. The President and CEO of Ingevity noted that this sale would reduce portfolio volatility and allow the organization to streamline its operations towards more profitable segments. Under the terms of the deal, the buyer agreed to supply certain refinery products back to the seller to support its remaining road technologies business.
• In May 2025, UPM announced a strategic decision to discontinue the development of its planned second biomass-to-fuels refinery in Rotterdam, Netherlands, following an extensive evaluation of the commercial and technical environment. Despite cancelling the new facility, the company reaffirmed its commitment to the biofuels sector by sharpening its focus on its existing biorefinery in Lappeenranta, Finland. The company stated it would continue to advance proprietary technologies and prioritize the qualification and commercialization of crude tall oil-derived biofuels specifically for the aviation industry. This move was described as a necessary step to ensure long-term profitability and capital efficiency while pursuing decarbonization solutions.
• In April 2024, St1 and SCA officially commenced commercial operations at their newly constructed joint venture biorefinery located in Gothenburg, Sweden. The facility was designed to process a flexible range of feedstocks, including tall oil fatty acids sourced from SCA’s pulp and paper mills, to produce sustainable aviation fuel, renewable diesel, and bio-based naphtha. This inauguration marked the culmination of a significant investment strategy aimed at enhancing the value chain of forest-based residues. Executives from both companies emphasized that the refinery would play a crucial role in meeting the growing demand for renewable energy and reducing carbon emissions in the transportation sector.
• In February 2024, Kraton Corporation announced the launch of a new line of biobased hydrocarbon oils marketed under the brand name SYLVASOLV. These products were derived from crude tall oil, a renewable by-product of the kraft pulp industry, and were designed to offer environmental advantages over traditional petroleum-based alternatives. The initial offering in this series was specifically developed to address functional needs within the agriculture sector, particularly for fertilizer coatings and crop protection applications. The company highlighted that this innovation demonstrated its commitment to expanding its portfolio of sustainable, high-performance solutions sourced from responsibly managed forests.

Key Market Players

• Kraton Corporation
• UPM-Kymmene Corporation
• Stora Enso Oyj
• Georgia-Pacific LLC
• Pine Chemical Group
• Foreverest Resources Ltd.
• Ingevity Corporation
• Segezha Group
• Mercer International Inc.
• Eastman Chemical Company

By Product	By Application	By End User	By Region
Tall Oil Rosin Tall Oil Fatty Acids Distilled Tall Oil all Oil Pitch Others	Adhesive Inks & Toners Partings & Coatings Hygiene Products Others	Automotive Chemicals Metalworking Electronics & Electricals Others	North America Europe Asia Pacific South America Middle East & Africa

Report Scope:

In this report, the Global Crude Tall Oil Market has been segmented into the following categories, in addition to the industry trends which have also been detailed below:

• Crude Tall Oil Market, By Product:

• Tall Oil Rosin
• Tall Oil Fatty Acids
• Distilled Tall Oil
• all Oil Pitch
• Others

• Crude Tall Oil Market, By Application:

• Adhesive
• Inks & Toners
• Partings & Coatings
• Hygiene Products
• Others

• Crude Tall Oil Market, By End User:

• Automotive
• Chemicals
• Metalworking
• Electronics & Electricals
• Others

• Crude Tall Oil Market, By Region:

• North America
• United States
• Canada
• Mexico
• Europe
• France
• United Kingdom
• Italy
• Germany
• Spain
• Asia Pacific
• China
• India
• Japan
• Australia
• South Korea
• South America
• Brazil
• Argentina
• Colombia
• Middle East & Africa
• South Africa
• Saudi Arabia
• UAE