Global Green Chemicals Market Outlook, 2029

Global Green Chemicals Market Outlook, 2029

From the lab to the environment, green chemicals are redoing the rules of industrial chemistry in the production of what was once toxic to become a force for sustainability, innovation, and economic growth. Green chemicals, sometimes called sustainable or environment-friendly chemicals, refer to chemicals designed to reduce or eliminate the harmful impacts associated with traditional chemicals from their production and use. They are implemented based on the principles of less toxicity, energy efficiency, renewable feedstocks, and minimum wastes. The green chemicals have their beginning from the pre-industrial era; however, the chemical processes were overwhelmed by the domination of natural materials used in that time. It was the industrialization that had initiated synthetic chemicals with excellent outcomes for environmental degradation through pollution and hazardous wastes. It was then the environmental movement within the 1960s and 1970s that awakened people to the danger of industrial chemicals, therefore actions in the aspect of regulation. In the 1990s, Paul Anastas and John Warner officially commenced green chemistry, thus providing a systematic way through which safer chemicals can be developed. The 12 Principles of Green Chemistry provide a systematic basis through which green chemicals can be designed. They incorporate principles of prevention being vastly better than cure, atom economy, use of renewable feedstocks, use of less hazardous chemical syntheses wherever possible and designing products that are safe to people and the environment. In addition, they facilitate the development of less hazardous chemical processes and solvents that are or will be environment-friendly; the development of chemicals that degrade harmlessly after use; fall under many categories of focus such as biobased chemicals, green solvents, biodegradable polymers, and green catalysts. Today, countries in all parts of the world are introducing policies that lean toward green chemistry. The European Union is playing a leading role through such initiatives as the European Green Deal and the REACH-based efforts that encompass the forbidding of hazardous chemicals from its production chain to make it viable to an environment-friendly option.

According to the research report, “Global Cocoa Powder Market Outlook 2029” published by Bonafide Research, the market is anticipated to cross USD 220 Billion by 2029, increasing from USD 128.93 Billion in 2023. The market is expected to grow with a 9.86% CAGR from 2024 to 2029. Consumers are generally today in a situation wherein they are highly shifting towards products that are highly eco-friendly and take high sustainability levels. This has been constantly pushing businesses to produce more green chemicals to meet consumer demands and improve their brand names. Businesses also set challenging sustainability goals. This includes lesser carbon footprint and reduction of the hazardous chemicals. Higher production costs are the factors that restrain the growth of the market. The green chemicals demand renewable feedstocks or enhanced technologies that are more costly than the chemical processes. The production of green chemicals calls for intricate techniques and advanced technologies, which make the costs incurred higher than the traditional chemical products. Primarily in developing regions, these main costs include atmospheric and biomass conversion catalysts, energy inputs, and the establishment of infrastructure make green chemical expensive, helping consumers from potential consumers, thus inhibiting market growth. For instance,In May 2023, NTPC Green Energy Limited (NGEL) and HPCL Mittal Energy Limited (HMEL) entered into an agreement to explore business opportunities in the Green Hydrogen Business & its derivatives in Green Ammonia and Green Methanol. The support of green chemistry comes through the Pollution Prevention Act in the United States and Green Chemistry Challenge Awards, sponsored by the Environmental Protection Agency. Other countries, such as China, Japan, and Canada, also support regulations on green chemicals, especially in industrial sectors, such as agriculture, manufacturing, and energy. Green chemicals have lately seen a significant growth in markets due to growing consumer demand for such products, and corporate sustainability goals.

Market Drivers

• Corporate Sustainability Goals and Initiatives: Many companies, particularly in sectors like manufacturing, packaging, and consumer goods, are setting ambitious sustainability goals to reduce their environmental impact and align with global sustainability trends. These corporate commitments often include transitioning to green chemicals as part of broader efforts to reduce carbon footprints, waste, and dependence on fossil-based resources. Major corporations like Unilever, Coca-Cola, and Nike have pledged to increase the use of bio-based, recyclable, or renewable materials in their products. As corporate sustainability goals become more rigorous, the demand for green chemicals is rising, especially as these companies seek to meet their environmental, social, and governance (ESG) objectives. This corporate push towards sustainability is driving innovation and investment in the green chemicals market.
• Government Incentives and Funding for Green Technology: Governments worldwide are supporting the development of green technologies, including green chemicals, through various incentives such as tax breaks, grants, and subsidies. For instance, the U.S. Department of Energy (DOE) and the European Union’s Horizon 2020 program provide funding for research and development in renewable energy and green chemistry. These financial incentives lower the barrier to entry for companies looking to adopt sustainable practices and invest in green chemical production. Additionally, government-backed initiatives aimed at fostering a green economy and reducing reliance on fossil fuels create an enabling environment for the green chemicals market to grow. Public-private partnerships and government-funded research programs are critical in accelerating the adoption of green chemicals across industries.

Market Challenges

• Technical Challenges in Scaling Green Chemical Production: Scaling green chemical production from laboratory or pilot-scale operations to full-scale commercial production presents significant technical challenges. Many green chemistry processes, such as those using biocatalysis or fermentation, are complex and require specific conditions that are difficult to maintain at an industrial scale. Moreover, green chemical processes often require new infrastructure, equipment, and expertise, which can complicate the transition for existing chemical manufacturers. These technical hurdles, combined with the need to ensure that green chemicals meet performance standards equivalent to traditional chemicals, make scaling production a major challenge. Companies must invest in advanced technologies and infrastructure to overcome these barriers and achieve large-scale production.
• Lack of Consumer Awareness and Market Maturity:While environmental awareness is increasing, many consumers and industries still lack sufficient understanding of the benefits of green chemicals, which limits demand. In several regions, especially in developing markets, green chemicals are not yet widely recognized, and industries may be reluctant to switch to more sustainable alternatives due to concerns over costs, performance, or the perceived complexity of transitioning. Additionally, certain markets are still dominated by well-established petrochemical-based products, and the infrastructure supporting green chemical production, distribution, and marketing is not fully mature. Overcoming this challenge requires ongoing efforts to educate consumers and industries, as well as the expansion of the green chemicals market to reach more regions and sectors.

Market Trends
• Rise of Biodegradable and Compostable Packaging: A growing trend in the green chemicals market is the development of biodegradable and compostable packaging materials. As consumers and governments push for alternatives to single-use plastics and non-degradable materials, companies are increasingly using bioplastics and bio-based materials to create packaging solutions that decompose naturally. This trend is particularly prominent in the food and beverage, retail, and e-commerce industries, where sustainability is becoming a key differentiator. For example, companies are developing packaging from sources like cornstarch, sugarcane, and algae, which can break down without leaving harmful residues in the environment. This shift towards biodegradable packaging is transforming the packaging industry and driving demand for green chemicals.
• Integration of Artificial Intelligence and Data Analytics in Green Chemistry: As the green chemicals market evolves, the integration of artificial intelligence (AI) and data analytics into green chemistry is becoming a notable trend. AI-driven platforms and machine learning algorithms are increasingly being used to optimize chemical processes, identify greener alternatives to traditional chemicals, and enhance the efficiency of bio-based production methods. For instance, AI can help predict the behavior of new green chemical formulations, reduce the need for costly and time-consuming experimental trials, and improve the energy efficiency of chemical reactions. The use of AI in green chemistry is expected to enhance research and development efforts, reduce production costs, and accelerate the discovery of innovative sustainable chemical solutions.

Bio-alcohols are the main drivers of the green chemicals market today. These bio-alcohols enjoy the best market currently in light of their eco-friendliness and the surging demand for green alternatives to fossil fuels.

The upsurge in the green chemicals market, which is particularly noted in the bio-alcohols segment, stems from the synergy of environmental pressures, regulatory pressures, and technological advancement. Bio-alcohols such as ethanol, methanol, and butanol are derived from renewable biomass sources and have been shown to emit much fewer greenhouse gases than fossil fuels. Thus, they have become rather attractive for carbon-conscious industries. Due to this emphasis on sustainability, manufacturers have altered their plans and are now choosing bio-alcohol production as a reaction to consumer demands for the use of more environmentally friendly products. Government initiatives, through laws, have also spurred this change of focus. For instance, strict emission regulations were set by different countries; adoption of biofuels in transportation and industrial usage is encouraged. Its strong market dominance is also established from the fact that it has an availability of plenty raw materials on which it can be produced, such as agricultural residues and dedicated energy crops. The soaring crude oil prices have made bio-alcohols a more economical substitute, hence increasing its use in different industries, such as in the automotive and packaging industries.

Packaging is expected to be one of the fastest-growing segments in the global market for green chemicals, mainly because consumers have started becoming very aware and governments are beginning to regulate the demand for biodegradable and eco-friendly packaging solutions.

The packaging that is made up of renewable material and crop residue, such as corn flour or sugarcane, is good for the environment. Cornstarch-based packaging however, has been of interest especially over the last ten years since it is eco-friendly and recyclable, hence accounting for an appreciable market share. Such demands from the market for sustainable packaging have prompted growth in the green chemicals market in the packaging segment. There has been a rise in consciousness among consumers today to understand that traditional packaging solutions methods have an adverse effect on the environment-in terms of single-use plastics-and so consumers are looking for more environmental-friendly packaging. This is yet further catalyzed by strict government rules about discouraging plastic waste and using biodegradable or recyclable material for packaging. As a part of this development, the packaging industry is increasingly using green chemicals as a tool to innovate in and design eco-friendly packaging solutions. More specifically, because bio-based polymers, such as PLA and bio-polyethylene, are more biodegradable and produce fewer carbon emissions than traditional plastic packaging used in the field, their adoption is on a high increase in the packaging segment. Demand for green packaging in food & beverage, healthcare, and personal care applications is on an increase and further accelerating the market growth in the packaging segment.

The most critical factor is the commitment of North America in terms of sustainability and forceful regulatory frameworks leading to the adoption of effective eco-friendly chemical alternatives.

North America, comprising the United States and Canada, has been spearheading policies as well as initiatives focused on reducing the environment damaging effects of chemical products and processes. Some of the key drivers of the trend and leadership in the green chemicals market by region include the increasing demand for sustainable and environmentally-friendly products from consumers and businesses, which is a huge market for green chemicals. Also, growing environmental and health concerns with respect to products consumed by consumers in North America drive the demand for chemicals sourced from renewable resources and manufactured through clean technologies. Perhaps however, one of the most important advances of late has been made in terms of the tightening of regulatory regimes like TSCA in the US or CEPA in Canada, seeking to limit as much as possible the use of hazardous substances and promote safer alternatives. Under these regulations, companies must also invest in research and development of R&D to come up with innovative chemical solutions in a greener form to fuel market growth. Above all, North America consists of thousands of university research centers, research organizations, and companies are working very actively on green chemical technologies. Government funding together with direct private sector investments helped to amplify the green chemistry innovation ecosystem and end up enabling a range of products for such chemistry-from bioplastics and biofuels to bio-based solvents-now gain major market traction in a diverse range of industries from packaging and transportation to manufacturing. The presence of major multinational corporations in North America committed to sustainability goals also affects the green chemicals market. Multinational companies invested in green chemical technologies in the pursuit of sustainability targets and diminution of carbon footprint. The adoption of green chemicals by such companies sends an adoption signal into the market, thereby urging more innovation and investment into the sector.

• In January 2024, BASF, an innovative catalyst technology provider announced a fresh collaboration with Envision energy. This collaboration aims to develop green hydrogen and CO2 conversion in e-methanol using advanced and dynamic process design.
• In July 2023, Mitsubishi Chemical Group and INPEX CORPORATION declared their agreement in July 2023 for conducting a combined (FS) feasibility study. This study will be for a carbon reprocess or recycle chemicals project comprising the manufacturing of the first commercial-scale polypropylene generated from green hydrogen and CO2 in Abu Dhabi, UAE.
• In August 2024, Arkema announced the expansion of the global manufacturing facility for Pebax® elastomers by 40 percent at its Serquigny facility, based in France. This move is being made to support its clients in the consumer and sports goods market.

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

Aspects covered in this report
• Green 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
• Bio Alcohols
• Bio Organic Acids
• Bio Ketones
• Bio Polymers
• Bio Solvents
• Others Product Types

By Applications
• Packaging
• Healthcare
• Pharmaceuticals & Personal Care Products
• Construction
• Food & Beverages
• Paints & Coatings
• Automotive
• 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 Green 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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