Europe Fermentation Chemicals Market Outlook, 2029

Europe Fermentation Chemicals Market Outlook, 2029

From the rolling hills of Tuscany to the fjords of Norway, fermentation's alchemical dance produces flavors that define European gastronomy—a symphony of tangy acids, aromatic esters, and complex biopolymers. The European fermentation‐based chemical industry is increasingly integrating sustainability into its core operations. Companies are transitioning to bio‐based production methods, using renewable feedstock like agri‐residues and waste streams, to reduce environmental footprints. Energy‐efficient fermentation processes are being adopted to curb the carbon footprints and improve resource efficiency. There isan increasing trend for a circular economy and utilization of by‐products and waste streams to ensure that the resources are used to the maximum at each point during the production cycle. Developments in the European market for fermentation chemicals correspond mainly to huge processing into bio‐based products and technological development. Bio‐based products are gaining interests in the market due to regulation of harsh environmental rules and also by the interests coming from customers. The development of the biotechnological field and available knowledge and techniques, for instance, genetic engineering or optimization of bioprocesses, pave the way for the production of high‐valued specialty chemicals, such as enzymes, organic acids, or biopolymers that are greatly valued in pharmaceuticals, food additives, or industrial uses. The European Green deal has ambitious targets to reach climate neutrality by 2050. Bio economy Strategy supports research, innovation, and market development in the bio‐based industries, with funding opportunities, through, e.g., Horizon Europe. Regulatory frameworks by the EU, such as Reach, increase the safety in use and the production of chemicals, including those based on fermentation, ensuring consumer trust and access to the market. Current developments in the European market for FBCs are characterized by strong investments in research and innovation. Public as well as private actors are active in projects to further biotechnological processes and scale up bio‐based production capacities. Projects in Horizon 2020, like in the Bio economy and Renewable resources work program, has provided funding opportunities to develop novel fermentation technologies and bio-based products further to increase the sustainability and relevance of industrial applications. In a 2023 interview, Cargill's business development director Rob Beekers said that for bio-based goods to go mainstream, Europe would need more and bigger biorefineries producing ""backbone"" chemicals in use across a wide range of industries that today are made from fossil resources. Current EU policy has limited the room for growth. Michael Carus, the founder of research Institute Nova, has encouraged crop-based biofuel producers to switch from the transport fuel market towards the chemical market. It will help to organize the transportation of bioethanol from fuel to other fermentation products for the chemical industry

According to the research report ""Europe Fermentation Chemicals Market Outlook, 2029,"" published by Bonafide Research, the Europe Fermentation Chemicals market is anticipated to add to more than USD 6 Billion by 2024–29. There is a long record of political interference with the energy business, and particularly the insecurity in the gas trade can be seen a sign of sickness. The current stretch of rising prices including the last two weeks of seeming typicality for the world's economies shows that the malignity is spreading . Flexibility is one imperative factor that has been adopted by companies within the European fermentation chemicals industry to respond to changes in the market and technological innovations as required. The companies adopt flexible ways of producing their goods to diversify in production and be able to respond in time to the dynamic market needs with new products. At Novozymes, production capacities of their enzymes are varied for different industrial applications, such as biofuels and household products, to fit a variety of market requirements. Adaptability of the industry to new technologies and changes in market trends is now the bottom line for keeping and continuing competitiveness and sustainability in the bio-economy. Companies incorporate biotechnological innovations in fermentation for cutting-edge processes and in the creation of novel products, in line with changing consumer preferences and regulatory standards. DSM, for example, has shown its adaptability in the latest biotechnological developments towards the improvement of efficiency in the fermentation process related to sustainable nutrition and raw materials. The European Commission has now given new impulsion for years of large-scale demonstration and flagship projects, on funding through the Circular Bio-Based Europe partnership (CBE-JU). The development of novel, improved, and sustainable products is intended to bring them closer to the market, underpinned by innovative biotechnological processes. Such investment in support underpinning biosolutions also has backing from the European Innovation Council Fund. One of the technologies amongst those supported, which is focused on deep-tech and biosolutions, can be enumerated.

Market Drivers
• Strong Regulatory Support for Sustainability:In Europe, strong regulatory support for sustainability drives the fermentation chemicals market. European Union policies and regulations emphasize environmental protection, renewable energy, and waste reduction. These regulations promote the use of bio-based chemicals and sustainable production practices. Companies are encouraged to develop and adopt green technologies that align with these regulatory frameworks. As a result, there is significant demand for fermentation chemicals that support sustainable and eco-friendly solutions, contributing to market growth.
• Demand for Advanced Biopharmaceuticals:The demand for advanced biopharmaceuticals in Europe significantly drives the fermentation chemicals market. Europe has a well-established pharmaceutical industry that relies on fermentation processes for producing biopharmaceuticals, including antibiotics, vaccines, and monoclonal antibodies. The region's focus on biotechnological advancements and research drives the need for specialized fermentation chemicals. As the pharmaceutical sector continues to grow and innovate, the demand for high-quality fermentation chemicals to support biopharmaceutical production remains strong.

Market Challenges
• High Production Costs:High production costs are a challenge for the fermentation chemicals market in Europe. These costs arise from the need for advanced technology, stringent regulatory compliance, and expensive raw materials. Additionally, the emphasis on sustainable practices and environmental regulations can increase operational expenses. Companies must manage these high costs while remaining competitive in the market. Balancing production efficiency with cost-effectiveness is a key challenge for manufacturers in the European fermentation chemicals sector.
• Complex Regulatory Environment:The complex regulatory environment in Europe poses a challenge for the fermentation chemicals market. Companies must navigate a wide range of regulations related to product safety, quality, and environmental impact. The European Union’s regulatory frameworks require thorough documentation, testing, and compliance, which can be time-consuming and costly. Ensuring adherence to these regulations while maintaining market agility and competitiveness is a significant challenge for industry players in the region.

Market Trends
• Innovation in Green Chemistry:Innovation in green chemistry is a notable trend in Europe’s fermentation chemicals market. Companies are focusing on developing eco-friendly fermentation processes and bio-based chemicals that reduce environmental impact. This trend aligns with Europe’s commitment to sustainability and environmental stewardship. Innovations in green chemistry not only enhance the sustainability of fermentation chemicals but also meet consumer demand for environmentally friendly products, driving market growth.
• Expansion of Biotech Applications:The expansion of biotech applications is a key trend in the European fermentation chemicals market. Advances in biotechnology are enabling new applications for fermentation chemicals, including personalized medicine, gene therapy, and advanced materials. The growth of the biotech sector drives demand for specialized fermentation chemicals used in research and development. As biotech applications continue to evolve, they present new opportunities for the fermentation chemicals market in Europe.

The dominant position of alcohol fermentation in the European market for fermentation chemicals can be explained by the well-established industry of alcoholic beverages and growing demand for biofuels.

Alcohol fermentation is a process wherein either yeast or bacteria transforms sugar into alcohol; this is one of the most common processes involved in producing beer, wine, and spirits. These drinks have a great tradition and are also heavy industries in Europe, with the reputation for wine, beer, or spirits types originating from many countries. It is the well-established industry, together with increasing demand from consumers for high-quality alcoholic beverages, that drives the demand for alcohol fermentation and hence places it at the forefront in the European fermentation chemicals market. The fast-rising demand for biofuels, in particular ethanol, is another contributory factor. Ethanol is basically obtained from the fermentation of sugars derived from crops such as wheat, corn, and sugar beets and finds extensive application as a biofuel. With the recent commitment by Europe to greenhouse gas reduction and increased use of renewable energy, demand for biofuels, especially ethanol, has drastically risen. The trend confirms the fact that alcohol fermentation will remain dominating in the European fermentation chemicals market.

Food and beverages are at the forefront, driving the European fermentation chemicals market on the back of surging consumer demand for natural, clean-label, and sustainable foods in the region.

The trend of growing interest from the European consumer in health and sustainability will continue to drive demand for foods and beverages that are perceived as more natural and less processed, in which fermentation chemicals assume a central place, as many of them are considered more natural when compared with synthetic additives. This is further supported by the highly stringent regime of food additives and ingredients adopted by the European Union, which compels food manufacturers to change over to fermentation-based ingredients that comply with regulations while also meeting consumer demand. Fermentation chemicals have a wide range of uses in the food and beverages industry as a natural preservative, flavor enhancer, texture modifier, and nutrition enhancer. Such versatility in fermentation processes allows the production of a very wide range of compounds, from organic acids and amino acids through to vitamins and enzymes—all finding application in wide-ranging food and beverage formulations. The rich and varied European food culture abounds with fermented foods are cheese, yogurt, beer, wine-these facts create a cultural backdrop that would support the use of fermentation-derived ingredients. Of late, the growing interest in probiotics and functional foods further fuels demand for fermentation chemicals in this sector. The strong biotechnology and research capabilities across Europe have continued to push innovations in fermentation processes, coming up with newer and better fermentation-derived ingredients in regard to requirements in the food and beverage industry.

The leading position of Germany in the European fermentation chemicals market is supported by its sophisticated biotechnology sector and a robust base of various industries, particularly food and beverages and pharmaceuticals.

Germany has a very solid and sophisticated biotechnology industry, which has a key role in the process of fermentation. This country has many biotech companies working with fermentation technology, and much research is carried out in this field. Most of these fermentation chemicals are thus efficiently and effectively produced in Germany, making the country technologically able and maintaining its lead in the European market. Another driver for fermentation chemicals is the large industrial base in Germany, especially in the food and beverage and pharmaceutical industries. Fermentation chemicals find applications in the production of alcoholic beverages, food ingredients, and pharmaceutical products. Therefore, the large and dynamic food and beverages industry, along with the leading pharmaceutical sector, guarantees a large domestic market for fermentation chemicals in Germany.
• January 2022: BASF SE announced the expansion of the production capacity of its enzymes plant in Ludwigshafen, Germany. By expanding the existing plant, BASF significantly increased the annual feasible fermentation runs
• In June 2022, Solvay announced the launch of its two new bio-based surfactants, developed through the fermentation process of rape-seed oil & sugar. These products are suitable for a wide range of applications in cosmetics & personal care products, including conditioners, face washes, creams, & shampoos.
• In July 2022, Evonik Industries announced the launch of its latest non-animal-derived collagen named ‘Vecollan,’ a highly pure and soluble collagen produced through fermentation. The fermentation-based production process offers a triple-helix structure that mimics the properties of natural collagen and makes it suitable for use in medical, pharmaceutical, and other life science applications.

Considered in this report
• Historic year: 2018
• Base year: 2023
• Estimated year: 2024
• Forecast year: 2029

Aspects covered in this report
• Fermentation Chemicals market Outlook with its value and forecast along with its segments
• Various drivers and challenges
• On-going trends and developments
• Top profiled companies
• Strategic recommendation

By Product Type
• Alcohol Fermentation
• Organic Acids
• Enzymes
• Other Product Types

By Application
• Industrial
• Food and Beverage
• Pharmaceutical and Nutritional
• Plastics and Fibers
• Other Applications

The approach of the report:

This report consists of a combined approach of primary and secondary research. Initially, secondary research was used to get an understanding of the market and list the companies that are present in it. The secondary research consists of third-party sources such as press releases, annual reports of companies, and government-generated reports and databases. After gathering the data from secondary sources, primary research was conducted by conducting telephone interviews with the leading players about how the market is functioning and then conducting trade calls with dealers and distributors of the market. Post this; we have started making primary calls to consumers by equally segmenting them in regional aspects, tier aspects, age group, and gender. Once we have primary data with us, we can start verifying the details obtained from secondary sources.

Intended audience

This report can be useful to industry consultants, manufacturers, suppliers, associations, and organizations related to the Fermentation Chemicals industry, government bodies, and other stakeholders to align their market-centric strategies. In addition to marketing and presentations, it will also increase competitive knowledge about the industry.

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