CRUDE TALL OIL MARKET SIZE AND SHARE ANALYSIS - GROWTH TRENDS AND FORECASTS (2025-2032)

Crude Tall Oil Market

The Global Crude Tall Oil Market size is expected to reach USD 3.04 Bn by 2032, from USD 1.93 Bn in 2025, growing at a CAGR of 6.7% during the forecast period.

Key Takeaways

• Based on Distillation Process, the Tall Oil Fatty Acid segment is expected to lead the market holding an estimated share of 35.1% in 2025, owing to the increasing demand for bio-based chemicals.
• Based on Application, the Papermaking segment is projected to account the highest share in the market in 2025 due to the rising demand for pulp and paper industry.
• Based on End User, the Building & Construction segment is expected to hold the largest market share in 2025, due to its role in bio-based adhesives, coatings, insulation, roofing, and bitumen.
• Based on Region, North America is estimated to lead the market with a share of 40% in 2025, due to presence of well-established pulp and paper industry. While, Asia Pacific, holding a share of 3.04% in 2025, is projected to be the fastest growing region, supported by its robust economic growth and increasing industrialization.

Market Overview

Crude tall oil is a dark brown viscous liquid which is derived as a by-product from the kraft pulping process of pine wood. It is composed of rosin and fatty acids and is the primary extractive obtained from pine wood. There are three main types of crude tall oil namely liquid, solid, and distilled crude tall oil. Liquid crude tall oil is commonly known as crude tall oil and solid crude tall oil is obtained by vacuum distillation process. Distilled crude tall oil has further purified fatty acid content and lower rosin content.

Crude tall oil has several advantages as it is renewable, bio-based raw material source and considered as one of the most cost-effective chemicals obtained from wood pulping. It serves as a sustainable substitute for petroleum-based raw materials. The components of crude tall oil such as resinic acids and fatty acids have many industrial uses varied from metal working fluids and surfactants to drying oils.

Current Events and Its Impact

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Segmental Insights

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Crude Tall Oil Market Insights, By Distillation Process - Tall Oil Fatty Acid Acquires the Largest Share Owing to the Increasing Demand for Bio-Based Chemicals

In terms of distillation process, the tall oil fatty acid segment is expected to contribute 35.1% share of the market in 2025, owing to the increasing demand for bio-based chemicals. Tall oil fatty acids (TOFA) is a by-product of the wood pulp industry. It is a viscous, yellow-black liquid with a distinctive odor. TOFA is a low-cost source of unsaturated fatty acids, primarily oleic acid, and it is widely used in various industries such as synthetic lubricant and coatings. Tall Oil fatty acid (TOFA)s is mainly used in the production of soap, both for cosmetic purposes and, in the case of metallic soaps, as lubricants. TOFA typically makes up 38-53% of crude tall oil, along with rosin acids and unsaponifiable.  In the European Union (EU), Crude Tall Oil and TOFA have driven up a huge demand due to government subsidies which favor their use as a renewable diesel feedstock. 

For instance, in September 2024, in the first half of 2024, Sweden's exports of tall oil fatty acids (TOFA) to the United States reached a record high of 9,960 metric tons, according to Global Trade Tracker data. This surge is attributed to a 30% reduction in U.S. crude tall oil refining capacity, following the closure of Ingevity's DeRidder, Louisiana facility and the conversion of its Crossett, Arkansas plant to non-tall oil feedstocks. This is further anticipated to proliferate the crude tall oil market demand.

Crude Tall Oil Market Insights, By Application - Papermaking Dominates the Overall Market on Account of the Rising Demand from Pulp and Paper Industry

In terms of application, the papermaking segment is projected to contribute the highest share of the market in 2025, driven by the rising demand for pulp and paper industry. crude tall oil is a by-product of kraft pulping process used in paper manufacturing, specifically during the conversion of pine trees into paper. It is primarily derived from the kraft pulping process, which is used to manufacture paper from softwood, especially pine. During this process, black liquor soap is skimmed off and acidulated to extract CTO. Many pulp mills use CTO internally as a biofuel to generate steam and power, reducing dependency on fossil fuels and improving energy efficiency. Additionally, CTO derivatives are reintegrated into paper production. Tall Oil Rosin (TOR) is commonly used in sizing agents to improve water and ink resistance of paper. Tall Oil Fatty Acids (TOFA) are employed in emulsifiers and coating binders, while Distilled Tall Oil (DTO) is used in specialty coatings that enhance gloss and durability. These derivatives offer biodegradable, sustainable alternatives to petroleum-based chemicals, supporting the production of eco-friendly paper and aligning with global green manufacturing standards.

In February 2024, Kraton Corporation introduced Sylvasolv™, a new line of biobased oils derived from Crude Tall Oil (CTO), a by-product of the Kraft pulp industry. Sourced from responsibly managed forests, Sylvasolv™ aims to provide sustainable alternatives for industrial applications, aligning with global efforts to reduce reliance on fossil fuels.

Crude Tall Oil Market Insights, By End Use - Building and Construction Dominates the Overall Market

In terms of end use, the building and contrition segment is expected to contribute the largest share of the market in 2025, fueled by its ole in bio-based adhesive, coating, insulation, roofing and bitumen. Crude tall oil has a diverse application in the construction industry, particularly as adhesive, coating, and as a component in various building materials. It is used as a binder in cement, an adhesive in wood products and even as an emulsifier for asphalt. The primary purpose of using crude tall oil in building and construction is due to its various properties and applications a renewable, bio-based material. Additionally, CTO can be used in paints and coatings, as well as in lubricants. 

In March 2025, Mainstream Pine Products started the construction of a cutting‑edge crude tall oil (CTO) biorefinery at Charleston International Manufacturing Center, South Carolina. With a $90 million investment, the facility will process 110,000 tons of CTO annually, targeting industrial usages including adhesives, coatings, and biofuel feedstocks. 

Regional Analysis

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North America Crude Tall Oil Market Analysis & Trends

North America has established itself as the dominant region in the global crude tall oil market over the past few decades. The North America market is expected to be the dominant market for crude tall oil, with a share of 40% in 2025. The U.S. accounts for the lion's share of the market due to the presence of well-established pulp and paper industry in the region. Major pulp and paper companies operating in North America produce huge volumes of crude tall oil as a by-product, which is further used in various end-use industries such as construction, paints and coatings, etc. In addition, the demand for bio-based products is growing rapidly in North America owing to stringent environmental regulations imposed by regulatory bodies such as Environmental Protection Agency. This has further propelled the consumption of crude tall oil-based products in the region. Moreover, the presence of leading crude tall oil traders and distributors aids in smooth supply chain operations across the continent. All these factors collectively make North America the most lucrative market globally.

Asia Pacific Crude Tall Oil Market Analysis & Trends

The Asia Pacific region has emerged as the fastest expanding market for crude tall oil in recent years on account of robust economic growth and increasing industrialization. The Asia Pacific market is expected to be the growing market for global crude tall oil, with a CAGR of over 3.04% during the forecast period. Countries such as China and India are major contributors to the Asia Pacific crude tall oil market. The thriving construction industry where crude tall oil and its derivatives finds extensive usage as concrete additives has been instrumental in driving the market growth in the region. Furthermore, rising exports of paper products from Asia Pacific to European and North American countries has augmented the crude tall oil production volumes. This offers new opportunities for existing as well as new market players. However, the presence of abundant raw material reserves and relatively cheaper labor costs gives domestic crude tall oil producers a competitive edge over import operations in Asia Pacific nations. This is expected to catapult the regional market to new heights in the coming years.

Europe Crude Tall Oil Market Analysis & Trends

The Europe market is expected to be the growing market for crude tall oil, with a CAGR of over 15% during the forecast period. The growth is attributed to the increasing demand for crude tall oil in various applications such as inks and toners, adhesives, metalworking, chemicals, electronics, and electrical. The renewable EU's 'Renewable Energy Directive' aims to confirm that at least 10% of their energy consumption comes from renewable sources, which is expected to drive the demand for crude tall oil in Europe. EU has recently declared provisional anti-dumping charges ranging from 23.7% up to 36.4% on most Chinese biodiesel and HVO imports. This ruling will disrupt the largest biodiesel and HVO import source in Europe, resulting in the rising demand for advanced biofuel feedstock, a by-product of pulp and paper production in the forest products industry.

Latin America Crude Tall Oil Market Analysis & Trends

The Latin America market is expected to be the growing market for crude tall oil, with a CAGR of over 8% during the forecast period. The growth of the market in Latin America is attributed to the lack of awareness and the presence of alternative biofuels, which may impede the market growth. For instance, in April 24, 2025, Mexico introduced a comprehensive Biofuels Law, aiming to revitalize its bioenergy sector. The legislation replaces the previous Law for the Promotion and Development of Bioenergetics (LPDB), offering clearer definitions and streamlined procedures for biofuel-related activities. By encompassing a broader range of biomass-derived fuels, the law seeks to eliminate regulatory ambiguities that have hindered sector growth.

Middle East & Africa Crude Tall Oil Market Analysis & Trends

The Middle East & Africa market is expected to be the growing market for crude tall oil, with a CAGR of over 7% during the forecast period. The growth of the market in the Middle East & Africa is attributed to the increasing demand for crude tall oil in various applications such as inks and toners, adhesives, metalworking, chemicals, electronics, and electrical.

Crude Tall Oil Market Outlook Country-wise

The United States Crude Tall Oil Market Trends

The U.S. crude tall oil market is projected to experience a moderate increase, driven by seasonal demand and global trade dynamics. The onset of spring has revitalized construction and manufacturing activities, boosting the need for tall oil derivatives in adhesives, coatings, and specialty chemicals. International buyers are stockpiling U.S. tall oil in anticipation of potential trade barriers, further elevating demand. Ongoing trade tensions, including tariffs on Canadian and Mexican goods, may disrupt pulp and paper supply chains, potentially tightening crude tall oil availability and sustaining upward price pressure.

Market Report Scope

Crude Tall Oil Market Report Coverage

Global Crude Tall Oil Market Trends

Rising preference for eco-friendly products

The rising preference for eco-friendly products among environmentally conscious consumers is significantly impacting the global crude tall oil market. There is increasing awareness about the detrimental effects of fossil fuel usage and consequent demand for sustainable alternatives. For instance, A new study has found that air pollution from fossil fuels is responsible for nearly one in every five deaths worldwide. Crude tall oil, a sustainable by-product of the pulp and paper industry's kraft process, is witnessing more demand from the biofuel and bioproduct sectors due to its green credentials.

Many companies are investing in new technologies and processes to extract crude tall oil on a larger scale and convert it into biofuel as well as biodegradable and renewable materials. For example, major crude tall oil producers like Forchem Oyj of Finland and WestRock Company of United States have significantly ramped up crude tall oil extraction capacity from their pulp mills in recent years to cater to the growing requirement of crude tall oil from biofuel manufacturers and environmentally-conscious chemical businesses. They are also undertaking initiatives to optimize recovery of crude tall oil from black liquor and improve refining methods to increase the sustainability and efficiency of operations.

Shifting focus towards bio-based and sustainable products

The demand for bio-based and sustainable products has been steadily rising in recent years as consumers and businesses alike have become increasingly environmentally conscious. Crude tall oil, a bio-based industrial chemical co-product of the kraft pulping process used in papermaking, stands to benefit from this trend. Tall oil derivatives such as tall oil fatty acids, distilled tall oils, and tall oil rosins are enjoying growing popularity as drop-in replacements for petroleum-based products in applications like adhesives, lubricants, binders, and surfactants.

Several major corporations have set ambitious sustainability targets focused on increasing their use of renewable and recycled content in products and packaging over the next five years. This direct corporate demand as well as pressure on suppliers to demonstrate improved sustainability credentials is expected to drive significant market expansion for crude tall oil and its refined output streams.

Global Crude Tall Oil Market Drivers

Growth in Bio refineries and Biofuel Industry

The crude tall oil market is expected witness significant growth due to expanding applications of crude tall oil in the production of biofuels and biochemical. There has been a continuous push towards developing a sustainable bio-based economy and reducing dependence on fossil fuels. Many countries have implemented regulatory policies and set mandates to increase the usage of renewable fuels in the transportation sector. This is positively impacting the establishment of new biodiesel and biofuel refineries that use vegetable oils, algae, and other biomass as raw materials. According to the US Department of Agriculture (USDA), global production of vegetable oils in 2025/26 is expected to reach 234.5 million tonnes. This represents a 6.7 million tonne rise compared to 2024/25. In other words, production could fully cover the projected demand of 228.9 million tonnes.

The growing demand for sustainable and low carbon liquid transportation fuels is a major driver for investments in biofuels and associated bio refining projects. Successful commercialization and higher blending mandates for advanced biofuels will positively impact crude tall oil consumption. Ongoing research efforts to optimize crude tall oil conversion processes and develop its high-value applications will further encourage bio refineries to adopt it as a versatile resource. Overall, there exists immense opportunity for crude tall oil considering the push for renewable and green alternatives across different industries. In February 2025, The Australian government has committed A$250m (€147m) to the development of low-carbon liquid fuels (LCLF) from its A$1.7bn Future Made in Australia Fund.

Global Crude Tall Oil Market Opportunities

Advancements in extraction technology: Advancements in extraction technology could unlock tremendous opportunities in the global crude tall oil market. Tall oil is a byproduct of the kraft pulping process used in paper manufacturing. Traditionally, tall oil has been extracted through acidulation, which introduces impurities and limits the applications of the product. However, new separation techniques are now allowing for purer forms of tall oil to be produced.

For example, vacuum evaporation and vacuum distillation technologies allow crude tall oil to be separated into pure fatty acid and rosin products under controlled temperature and pressure conditions without the use of chemicals. This enables the individual components to be further refined for specialized industrial and consumer applications. As a result, a much wider range of end products become feasible such as tall oil fatty acid for lubricants and fuel additives as well as distilled tall oil for resins and adhesives.

Recent Developments

• In May 2025, Resinall, a subsidiary of Ergon, Inc., formed a strategic partnership with Azelis to launch R-6000, a soy-based alternative to Tall Oil Fatty Acid (TOFA). Designed for metalworking fluid formulations, R-6000 offers a sustainable, domestically sourced option without compromising on lubrication, corrosion protection, or fluid stability.
• In April 2025, UPM Biofuels celebrated a decade of renewable fuel production at its Lappeenranta Biorefinery in Finland. Since commencing operations in 2015, the facility has produced approximately 130,000 tonnes annually of UPM BioVerno™ renewable diesel and naphtha, utilizing crude tall oil, a residue from pulp production as feedstock. This pioneering approach has positioned the biorefinery at the forefront of sustainable fuel innovation, contributing significantly to the decarbonization of transport and petrochemical industries. All products are certified for sustainability, underscoring UPM's commitment to environmental responsibility.
• In January 2024, Kraton Corporation announced the completion of a USD 35 million investment to upgrade its crude tall oil (CTO) biorefinery towers at its Panama City, Florida facility. This project marks the city's largest single capital investment in five decades, underscoring Kraton's commitment to sustainable innovation and operational excellence.
• In August 2023, the Pine Chemical Group launched a new production site in Kotka, Finland. The new production site includes crude tall oil, tall oil pitch and pitch fuel. These products are offered are fully certified according to existing regulations such as REACH and ISCC.

Analyst Opinion (Expert Opinion)

• The Crude Tall Oil (CTO) market is rapidly becoming a cornerstone in the transformation of heavy industries toward sustainable inputs. Far from being a waste stream of kraft pulping, CTO is now a prized raw material driving innovation across adhesives, sealants, lubricants, bio-based plastics, and fuel additives. What makes this market exceptional is its alignment with circularity and low-carbon manufacturing two imperatives for European and North American industries facing tightening emissions legislation and green procurement mandates.
• CTO’s role in adhesives is particularly worth noting. For instance, in Scandinavia, over 60% of hot-melt adhesive manufacturers source tall oil fatty acids (TOFA) as the primary component due to their superior tack and oxidative stability compared to petroleum-derived alternatives. Moreover, the CTO-to-rosin value chain supports rosin esters used in pressure-sensitive adhesives for construction and packaging a sector where bio-based content is now a procurement requirement for government contracts in Germany and the Netherlands.
• Furthermore, the material is gaining ground in bitumen modification for sustainable roofing. A notable case is a 2024 pilot by Sika in France, where CTO-derived additives replaced petroleum resins in roofing sheets, improving UV resistance and reducing VOC emissions by up to 35%.
• Amid global trade disruptions and rising crude oil volatility, CTO’s supply chain—rooted in the pulp and paper industry remains largely regional and vertically integrated. Companies like Kraton, Forchem, and Fintoil are doubling down on CTO refining infrastructure, with Fintoil’s biorefinery in Finland expected to cut 200,000 tons of CO₂ annually by displacing fossil-based inputs.

Market Segmentation

• Global Crude Tall Oil Market, By Distillation Process
• • Tall Oil Fatty Acids (TOFA)
  • Tall Oil Heads
  • Distilled Tall Oil
  • Tall Oil Rosin
  • Tall Oil Pitch
• Global Crude Tall Oil Market, By Application
• • Painting and coatings
  • Inks & Toners
  • Adhesives
  • Vehicle Tires
  • Hygiene commodities
  • Substitutes for antibiotics
  • Mining
  • Chewing Gums
  • Electronics
  • Papermaking
• Global Crude Tall Oil Market, By End Use
• • Metalworking
  • Building & Construction
  • Chemical
  • Electronics & Electricals
  • Mining Industry
  • Personal Care & Cosmetics
  • Automobile
• Global Crude Tall Oil Market, By Region
• • North America
    • U.S.
    • Canada
  • Latin America
    • Brazil
    • Argentina
    • Mexico
    • Rest of Latin America
  • Europe
    • Germany
    • U.K.
    • Spain
    • France
    • Italy
    • Russia
    • Rest of Europe
  • Asia Pacific
    • China
    • India
    • Japan
    • Australia
    • South Korea
    • ASEAN
    • Rest of Asia Pacific
  • Middle East
    • GCC Countries
    • Israel
    • Rest of Middle East
  • Africa
    • South Africa
    • North Africa
    • Central Africa
• Top Companies in Global Crude Tall Oil Market
• • Citec Group Oy Ab
  • Ingevity Corporation
  • Georgia-Pacific Chemicals
  • Forchem Oyj
  • Kraton Corporation

Sources

Primary Research Interviews from the following stakeholders

Stakeholders

• Interviews with procurement managers at pulp and paper mills, CTO fractionation plants, resin producers, biodiesel manufacturers, and specialty chemical formulators.
• Discussions with sustainability officers at packaging companies, R&D leads at oleochemical firms, and logistics heads handling tall oil derivatives.
• Technical specialists working on CTO upgrading, pine chemical engineers, and compliance experts in bio-based industrial feedstocks.

Databases

• UN Comtrade Database – for crude tall oil and its derivatives trade flows
• FAOSTAT – global forestry and wood pulp production
• Eurostat – pulp production, exports, and industrial chemicals
• U.S. Energy Information Administration (EIA) – biofuel feedstock usage
• U.S. Geological Survey (USGS) – tall oil derivatives in industrial use
• Statistics Canada – pine chemicals and bio-product manufacturing
• Statistikmyndigheten SCB (Sweden) – pulp production and chemical usage data
• OECD Stats – biomass and bio-based chemical production indices

Magazines

• Biofuels International
• Chemical Week
• Pulp & Paper International (PPI)
• European Coatings Journal
• Forest Industry Network Magazine
• Biodiesel Magazine
• Specialty Chemicals Magazine
• Greener Package
• Industrial Biotechnology Journal – Industry Updates Section

Journals

• Industrial Crops and Products (Elsevier)
• Journal of Cleaner Production
• Bioresource Technology
• Biomass and Bioenergy
• TAPPI Journal (Technical Association of the Pulp and Paper Industry)
• Renewable & Sustainable Energy Reviews
• Journal of the American Oil Chemists' Society

Newspapers

• The Wall Street Journal – Chemicals & Manufacturing Section
• Financial Times – Bioeconomy & Materials Sector Reports
• The Hindu Business Line – Agro-Industrials & Bio-Inputs Coverage
• The Economic Times – Industrial Feedstocks & Exports
• Nikkei Asia – Forest Products and Green Chemicals
• Globe and Mail – Canadian Bioeconomy Section

Associations

• European Oleochemicals and Allied Products Group (APAG)
• American Chemical Society – Division of Industrial & Engineering Chemistry
• Pine Chemicals Association
• TAPPI (Technical Association of the Pulp and Paper Industry)
• Bioenergy Europe – Biofuels Working Group
• National Biodiesel Board (NBB)
• Society of Chemical Industry (SCI)
• Forest Products Association of Canada (FPAC)

Public Domain Sources

• U.S. Department of Agriculture (USDA) – BioPreferred Program
• European Chemicals Agency (ECHA) – Registered Tall Oil Derivatives
• Ministry of Environment and Forestry (Finland, Sweden)
• U.S. Forest Service – Non-Timber Forest Products Reports
• Environment and Climate Change Canada – Renewable Chemicals Reports
• Ministry of Industries and Production (Govt. of India)
• EuroBioRef Project Reports – European Commission
• Department for Business and Trade (UK) – Green Chemicals Briefings

Proprietary Elements

• CMI Data Analytics Tool, and Proprietary CMI Existing Repository of information for last 8 years

*Definition: Crude tall oil (CTO) is a dark brown, viscous liquid obtained as a by-product of the kraft process of wood pulping. It is a versatile material that maximizes the life cycle of wood-based raw materials and is a non-land based, non-food competing feedstock. CTO contains rosins, which include resin acids, fatty acids, fatty alcohols, unsaponifiable sterols, and other compounds. It can be further refined into various fractions like fatty acids, rosins, and sterols, which are used in a wide variety of applications and products, including detergents, soaps, adhesives, lubricants, paints, coatings, and biofuels.