The global dimethyl ether market is projected to expand at a CAGR of 9.80% during 2026-2035. Dimethyl ether is a colourless gas that has a faded odour. It is transported as liquid gas under its vapour pressure. It is readily flammable. Dimethyl ether is usually employed as fuel, solvent, refrigerant and aerosol propellant and is widely used in the chemical industry.
Base Year
Historical Period
Forecast Period
Sweden is home to the world’s first bio DME factory, which has a capacity of approximately 4 tons of bio DME per day and offers a substantial reduction in carbon dioxide emissions.
As per industry reports, the majority of global DME production currently occurs in China.
China’s National Development and Reform Commission had a 20 million tons of DME production capacity in 2020.
Other countries with significant DME production facilities include Japan, Korea, and Brazil. Major capacity additions are under construction in Egypt, India, Indonesia, Iran, and Uzbekistan.
Compound Annual Growth Rate
9.8%
2026-2035
*this image is indicative*
| Global Dimethyl Ether Market Report Summary | Description | Value |
| Base Year | USD Billion | 2025 |
| Historical Period | USD Billion | 2019-2025 |
| Forecast Period | USD Billion | 2026-2035 |
| Market Size 2025 | USD Billion | XX |
| Market Size 2035 | USD Billion | XX |
| CAGR 2019-2025 | Percentage | XX% |
| CAGR 2026-2035 | Percentage | 9.80% |
| CAGR 2026-2035 - Market by Region | Asia Pacific | 11.3% |
| CAGR 2026-2035 - Market by Country | India | 11.2% |
| CAGR 2026-2035 - Market by Country | UK | 9.0% |
| CAGR 2026-2035 - Market by Raw Material | Bio-Based | 11.0% |
| CAGR 2026-2035 - Market by Application | Fuel | 11.2% |
| Market Share by Country 2025 | Canada | 1.5% |
Dimethyl ether (DME) is commonly used as an environmentally friendly and a non-toxic aerosol propellant. It can be manufactured domestically from different feedstocks, such as food waste, dairy biogas, and industrial process waste streams. DME is currently used as a propane supplement in cooking gas, an aerosol spray-can propellant, a solvent, and a chemical feedstock. Regional markets are exploring DME as a transportation fuel and its potential use in electric power generation.
The increasing demand for DME in LPG blending applications is a key driver supporting dimethyl ether market expansion as it helps reduce soot, particulate matter, and other pollutants, improving overall air quality. The growing interest in using DME as a fuel in non-electric and electric vehicles due to its higher cetane number, which provides better ignition and reduces environmental pollutants is also driving market growth.
Rising demand for DME as an alternative fuel, development of sustainable dimethyl ether, and expansion of DME production capacity in developing regions are factors boosting the dimethyl ether market growth
Dimethyl ether has many applications; it is used as solvent, refrigerant, extraction agent, multi-purpose fuel, propellant for aerosol products (such as deodorants, air fresheners and perfumes), fuel for welding cutting and brazing, (co-)blowing agent for foam, chemical reaction medium, etc. Such a variety of applications is expected to stimulate the dimethyl ether market development.
There is increasing focus on decarbonisation of transport across the world. For example, in 2021, the U.S. Department of Energy (DOE) Vehicle Technologies Office (VTO) granted over USD 4 million to fund testing of new applications of dimethyl ether as a low-carbon replacement to fossil fuels. Oberon Fuels was a supporting partner. Such efforts are expected to propel the market’s growth.
In 2021, SHV Energy and KEW Technology announced a joint venture (Circular Fuels Ltd.) to advance renewable dimethyl ether manufacturing plants. The strategic association sought to exhibit the feasibility of transforming renewable and recycled carbon feedstock into renewable liquid gas. Such advancements have positively affected the dimethyl ether market outlook.
The use of DME as a green refrigerant is gaining traction as it has a significantly lower global warming potential compared to traditional refrigerants. Jiutai New Material Technology, a Chinese company, has developed DME-based refrigerants for use in air conditioning and refrigeration systems.
Another trend driving the growth of the market is the rising demand for DME as an alternative fuel, particularly in the transportation sector. DME has properties like liquefied petroleum gas (LPG) and can be used as a substitute for diesel fuel in vehicles. As countries implement stricter regulations against high-emission fuels, such as the Euro 6 emission standards in Europe, the adoption of cleaner alternatives like DME is expected to increase, fuelling dimethyl ether market expansion.
Moreover, the expansion of DME production capacity in emerging markets are anticipated to boost the market during the forecast period. Shenhua Ningxia Coal Industry Group, one of China's largest coal-to-DME producers, has been expanding its production capacity to meet the growing domestic demand. Indonesia is also investing in DME production to reduce its reliance on LPG imports, with projects like the Arun DME plant, which aims to produce 1.1 million tons of DME annually.
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The EMR’s report titled “Dimethyl Ether Market Report and Forecast 2026-2035” offers a detailed analysis of the market based on the following segments:
Market Breakup by Raw Material
Market Breakup by Application
Market Breakup by Region
| CAGR 2026-2035 - Market by | Country |
| India | 11.2% |
| UK | 9.0% |
| USA | 8.8% |
| Germany | 8.1% |
| Australia | 7.7% |
| Canada | XX% |
| France | 7.7% |
| Italy | XX% |
| China | XX% |
| Saudi Arabia | XX% |
| Brazil | XX% |
| Mexico | XX% |
| Japan | 6.8% |
LPG blending segment dominates the market, driven by increasing use of DME in LPG to improve combustion
LPG blending is the largest application segment, with DME being blended with LPG as a fuel additive to improve combustion and reduce harmful emissions. Countries like India, China, and Indonesia are actively promoting the use of DME-LPG blends as an alternative to conventional LPG to reduce imports levels. The segment is expected to continue dominating due to the increasing adoption of DME-LPG blends for household heating and cooking purposes.
As per dimethyl ether market analysis, the aerosol propellant segment is another major application of DME globally. DME is used as an environmentally friendly propellant in aerosol products like hair sprays, deodorants, and insecticides due to its low toxicity and flammability. The growing demand for personal care and household products is driving the use of DME as an aerosol propellant.
DME is also used as a chemical feedstock to produce various chemicals like formaldehyde, acetic acid, and olefins. The growing demand for these chemicals in various end-use industries is expected to drive the use of DME as a feedstock.
Methanol segment holds substantial share of the market as it aids in easy production of dimethyl ether
Methanol is a key raw material for producing dimethyl ether and holds the largest dimethyl market share due to its high demand and ease of production. Bio-based feedstock, including methanol, is another dominant segment in the market as the use of bio-based feedstock in transportation fuel applications is increasing. DME can replace diesel in various applications, which is driving the growth of this segment.
Moreover, the rising environmental concerns and the shift towards sustainable and eco-friendly alternatives are propelling the demand for bio-based feedstock in dimethyl ether production. Dimethyl ether is also manufactured using natural gas, which is considered a costly process. However, the easy availability of natural gas, driven by technological advancements and high research and development investments in the gas and oil market, is expected to drive the segment’s growth.
Market players are focused on expanding their presence across various geographies to expand their customer base and strengthen their market position
Topsoe A/S, founded in 1940 and headquartered in Denmark, Europe, specialises in providing catalysts, electrolysers, and technology solutions to decarbonise cement, steel, shipping, chemicals, and aviation sectors. The company focuses on offering fuels, renewable energy carriers, and chemicals of the future, including green ammonia, green hydrogen, and eMethanol.
Mitsubishi Corporation, established in 1950 and based in Tokyo, Japan, is involved in industrial materials, natural gas, mineral resources, petroleum & chemicals solution, automotive & mobility, industrial infrastructure, consumer industry, food industry, power solution, and urban development.
Grillo-Werke AG, with a founding year of 1842 and headquarters in Duisburg, Germany, operates across four divisions. The divisions are metal, chemicals, zinc oxide, and RHEINZINK. The company is known for its innovative and sustainable solutions in the areas of sulphur and zinc.
Royal Dutch Shell Plc, now known as Shell Plc, was established in 1907 and is headquartered in London, United Kingdom. It is an international group of petrochemical and energy companies. The company is involved in production of dimethyl ether (DME) from different feedstocks like food waste, dairy biogas, and industrial process waste streams.
*Please note that this is only a partial list; the complete list of key players is available in the full report. Additionally, the list of key players can be customized to better suit your needs.*
Other key players in the global dimethyl ether market include Korea Gas Corporation and Nouryon, among others.
Asia Pacific has a high demand for DME as a cleaner alternative fuel due to its strict regulations against high-emission fuels
Asia Pacific is the largest regional market for dimethyl ether (DME) due to the easy availability of coal reserves in countries like China, which is the largest producer and consumer of DME. Other major Asia Pacific markets include Japan, which has many DME production plants. Moreover, the constantly expanding automobile market in developing economies, especially in Asia Pacific, is expected to drive DME demand during the forecast period.
North America is expected to be the fastest-growing dimethyl ether market during the forecast period. The U.S. and Canada are the major markets in North America, with the U.S. accounting for the larger share. DME is being explored as an alternative fuel in the transportation sector, particularly as a diesel replacement, contributing to market growth. Companies like Oberon Fuels in the U.S. are developing innovative DME production technologies from biogas and waste streams.
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The dimethyl ether market is expected to grow at a CAGR of 9.80% between 2026 and 2035.
The major drivers of the market include the rising applications of dimethyl ether in diesel engines, increasing deployment of the product in heavy construction projects, and its rapid utilisation as an aerosol propellant in personal care products.
Key trends aiding market expansion include the growing research and development activities by the major market players aimed towards identifying sustainable methods of procuring dimethyl ether, use of DME as a green refrigerant, and the expansion of DME production capacity.
Regions considered in the market are North America, Europe, the Asia Pacific, Latin America, and the Middle East and Africa.
Based on raw material, the market is divided into coal, natural gas, methanol, and bio-based, among others.
LPG blending, aerosol propellant, fuel, and chemical feedstock are the different applications of dimethyl ether. It is also used in the personal care industry to manufacture hair care products such as hair spray, cleanser, and anti-fungal creams, among others.
Dimethyl ether tanks and cylinders are commercially available for sale.
Key players in the market are Topsoe A/S, Mitsubishi Corporation, Grillo-Werke AG, Royal Dutch Shell Plc, Korea Gas Corporation, and Nouryon, among others.
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| REPORT FEATURES | DETAILS |
| Base Year | 2025 |
| Historical Period | 2019-2025 |
| Forecast Period | 2026-2035 |
| Scope of the Report |
Historical and Forecast Trends, Industry Drivers and Constraints, Historical and Forecast Market Analysis by Segment:
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| Breakup by Raw Material |
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| Breakup by Application |
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| Breakup by Region |
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| Market Dynamics |
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| Trade Data Analysis |
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| Competitive Landscape |
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| Companies Covered |
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