Renewable Chemicals Market - Forecasts from 2024 to 2029

Renewable Chemicals Market - Forecasts from 2024 to 2029

The Renewable chemicals market is evaluated at US$90.420 billion for the year 2022 and is projected to grow at a CAGR of 15.37% to reach a market size of US$246.131 billion by the year 2029.

Renewable chemicals are chemicals that are produced from renewable feedstocks such as biomass, agricultural raw materials, and microorganisms. Bio-based chemicals are now becoming cost-competitive and provide opportunities for the replacement of petrochemicals with renewable resources. Increasing demand and support for eco-friendly products are expected to drive the market for renewable chemicals during the forecast period. However, the presence of substitutes and high prices are anticipated to restrain the growth of the market in the coming years.

MARKET TRENDS:

Several major factors, which are indicative of a global trend toward sustainability and environmental consciousness, are driving the renewable chemicals market. The growing understanding of the harmful effects of conventional chemical manufacturing processes on the environment is a major motivator, leading industry to look for alternative, renewable sources.

Strict government rules that support greener industrial methods and lower carbon emissions serve to increase awareness of this. Furthermore, research and investment in renewable chemical technologies are being propelled by the increasing need for bio-based goods as well as developments in green chemistry and biotechnology.

MARKET DRIVERS:

Growing demand for environmentally friendly products is anticipated to drive the market’s growth.

Several nations are targeting replacing fossil resources with renewable biological resources to produce food, chemicals, energy, and materials. The increasing concerns over climate change are considered one of the prime drivers for the growth of the market during the forecast period. There is also a growing need for secure, sustainable food production and clean water, clothing, and resources for housing due to the ever-increasing human population.

In addition, companies are beginning to cater to the demand for conscious customers by paying attention to their obvious impact on the environment. Also, eco-friendly products not only produce fewer emissions and reduce their carbon footprint but also lower shipping costs and create a positive brand image, which further propels the market growth opportunities for renewable chemicals over the forecast period. The emission of greenhouse gases has been increasing globally as the trend of industrialization continues. The percentage of countries committed to peaking their emissions is expected to increase from 36% in 2010 to 60% in 2030 (source: Emission Gap Report 2018, United Nations Environment Programme). Besides, the European Commission has set a target of achieving of 90% reduction in emissions by 2050. Such collaborative efforts and initiatives are anticipated to drive the market for renewable-based chemicals in the coming years.
An increase in initiatives by private players might impact renewable chemicals market growth.

The private sector is increasingly supporting and taking initiatives for the use of renewable chemicals. For instance, AkzoNobel Specialty Chemicals launched its third edition of the Imagine Chemistry collaboration innovation challenge under which the company invites start-ups, and university spin-outs among other potential partners to rescue the chemicals-related challenges and unboxed the new way that creates value for customers. In addition, major market players are investing heavily, which is anticipated to boost the market for renewable chemicals over the forecast period.

MARKET DRIVERS:

The renewable chemicals market has a strong development trajectory, but several obstacles prevent it from reaching its full potential. The substantial initial outlay of funds needed for the study, creation, and use of renewable chemical technology is one major barrier. These expenditures frequently act as a barrier to entry for new and smaller businesses, which reduces innovation and market competitiveness. Furthermore, the unpredictability of feedstock supply in terms of availability and consistency is a problem, especially for feedstocks derived from agriculture that are subject to weather variations and market swings.

North America is anticipated to be the major regional market.

By geography, the renewable chemicals market has been segmented into the following: North America, South America, Europe, the Middle East, Africa, and Asia Pacific(APAC) regions. North America is expected to account for a significant share of the global renewable chemicals market in the base year and is projected to grow at a healthy CAGR throughout the forecast period.

This growth is attributed to the presence of big market players coupled with the growing government initiative. As a result of rising awareness regarding greenhouse gas emissions regarding other forms of chemicals, it is compelling manufacturers and researchers to produce chemicals that not only reduce the emission of greenhouse gases such as carbon dioxide at a considerable level but also are cost-effective.

The renewable chemicals market in the Asia Pacific region is anticipated to witness exponential growth owing to abundant feedstocks and technological innovation in countries like China and India. Also, growing carbon footprints due to rapid industrialization in developing countries like India and China boost the demand for renewable chemicals. In addition, Europe's renewable chemicals market is anticipated to witness considerable growth during the forecast period on account of rising demand for environmentally friendly products coupled with favorable government policies in the region.

Key Developments:

In October 2023, to develop a method for making propylene directly from ethanol which is gaining popularity as a sustainable chemical raw material, Sumitomo Chemical started building a pilot plant. A project funded by the NEDO* Green Innovation (GI) Fund is the development of this technology.
In October 2023, Perstorp, a leading inventor in specialty chemicals, introduced a new grade of 2-Ethylhexanol (2-EH) that has a mass-balanced carbon content that is 100% renewable and traceable. The product has a negative carbon footprint from the point of origin to the Perstorp gate when accounting for the biogenic CO2 uptake absorbed by the renewable raw materials employed.
In July 2023, Abu Dhabi Future Energy Company PJSC - Masdar (Masdar), Mitsubishi Chemical Group Corporation (MCG), and INPEX CORPORATION (INPEX) announced that they had agreed to carry out a joint feasibility study (FS) for a carbon recycle chemicals project (CRC Project), which includes producing the first commercial-scale polypropylene in the history of the world in Abu Dhabi, United Arab Emirates, using CO2 and green hydrogen.
In May 2023, a long-term supply deal was announced by Dow and New Energy Blue in North America. Under the terms of the agreement, New Energy Blue would produce bio-based ethylene using sustainable agricultural remains.

Segmentation:

By Product type
Bio-based chemicals
Alcohols
Organic Acids
Ketones
Others
Platform Chemicals
Bio Polymers
Polylactic Acid (PLA)
Starch Blends
Polyvinyl Acetate
Polyglycolic Acid
Others
By Application
Transportation
Food and Beverage Packaging
Agriculture
Biomedical
Textiles
Housing
Others
By Geography
North America
USA
Canada
Mexico
South America
Brazil
Argentina
Others
Europe
United Kingdom
Germany
France
Spain
Others
Middle East and Africa
Saudi Arabia
UAE
Israel
Others
Asia Pacific
China
Japan
India
South Korea
Taiwan
Thailand
Indonesia
Others