Renewable Chemicals Market Size, Share & Industry Analysis, By Type (Alcohols, Biopolymers, Organic Acids, Ketones, and Others), Application (Petrochemical, Pharmaceutical, Packaging Products, Cleaning & Detergent Products, Automotive, and Others), and Regional Forecast, 2024-2032

The global renewable chemicals market size was USD 137.6 billion in 2023 and is projected to grow from USD 155.3 billion in 2024 to USD 390.6 billion in 2032 at a CAGR of 11.5% during the forecast period (2024-2032). Asia Pacific dominated the renewable chemicals market with a market share of 64.32% in 2023. Moreover, the renewable chemicals market in the U.S. is projected to grow significantly, reaching an estimated value of USD 61.16 billion by 2032, driven by the expansion in e-commerce and food & beverage industries.

Chemicals derived from renewable sources, including agricultural waste, agricultural feedstock, biomass, microorganisms, and organic waste products, are known as renewable chemicals or bio-based chemicals. They have a reduced carbon footprint than traditional petro-based compounds and are frequently used as a replacement. Some commonly found renewable chemicals include polymeric hemicellulose, lignin, starch, cellulose, protein, oils, plant extractives, and amino acids. The adoption of renewable type of chemicals and polymers in many end-user industries has grown rapidly due to rising greenhouse gas emissions and the depletion of fossil resources. Moreover, the increasing promotional activities from the government for eco-friendly and bio-based products will also help the market develop sustainably throughout the forecast period.

The COVID-19 pandemic initially hampered the market. Lockdowns and supply chain disruptions stalled the production and demand across all sectors. However, the focus on sustainability recovered the market, with some renewable chemicals such as bio-based disinfectants experiencing a temporary surge. Overall, the pandemic caused a slowdown in growth but the long term outlook for the renewable chemicals industry remains positive.

Renewable Chemicals Market Trends

Increasing Adoption of Eco-friendly Chemicals is a Prominent Trend

The growing demand for eco-friendly chemicals from various end-use industries such as agriculture, pharmaceuticals, packaging, food & beverages, and automotive provides significant growth opportunities. Nowadays, major chemical producers are shifting their focus toward adopting natural sources to produce various chemicals to reduce dependence on fossil-based resources. Additionally, governmental structures have placed strict regulations on adopting and disposing of petroleum-based chemicals to prevent harmful effects on individuals and the environment. This would further result in increased adoption of bio-based chemicals. Moreover, rising governmental support for using eco-friendly sources & processes coupled with technological innovations will further fuel the renewable chemicals market growth. Additionally, booming shale gas extraction benefits market growth.

Biotechnology Integration Propels Sustainable Growth in the Market

Biotechnology advancements are revolutionizing the renewable chemicals business by allowing for more efficient and targeted biomass conversion processes. Researchers can create strains of microbes that improve the synthesis of valuable compounds from renewable feedstock by genetically modifying them. These genetically modified microorganisms can be tailored to efficiently metabolize specific substrates and produce desired compounds, bypassing traditional chemical synthesis routes.

This integration of biotechnology creates numerous potential opportunities for the market. It permits the synthesis of a wide spectrum of compounds from biomass, lowering dependency on fossil fuels and minimizing environmental effect. Furthermore, by optimizing production processes, biotechnology can reduce manufacturing costs and boost the economic feasibility of renewable chemicals. The capacity to tailor microbes to specific applications creates opportunities for novel goods and innovative solutions, promoting future market growth and diversification in the market.

Renewable Chemicals Market Growth Factors

Rising Consumption of Renewable Alcohols in Several Industries to Boost Market Growth

The increasing use of renewable alcohols for industrial applications such as solvents, fuel & fuel additives, and beverages will drive the market growth. Renewable alcohols are mainly comprised of ethanol and methanol. Nowadays, ethanol is increasingly used as an oxygenate additive for regular gasoline. Its high adoption can also be seen in manufacturing power fuel cells and biodiesel. Additionally, several manufacturers have also added bio-based ethanol in their product portfolio, owing to its benefits along with environmental friendliness. For instance, in April 2019, Braskem developed its first sugarcane-based ethanol-based partly renewable solvent. The oxygenated solvents group's HE-70S product employs bio-based carbon as a raw material. In contrast, methanol is used to make compounds such as formaldehyde and acetic acid, which are further utilized in foams, adhesives, solvents, plywood subfloors, and windshield washer fluid. Hence, the rising demand for renewable alcohol will propel the growth of the market during the forecasted timeline.

RESTRAINING FACTORS

High Price of Renewable Chemicals to Hamper Market Growth

The high price of renewable chemicals is a major restraint to the market growth. Complex manufacturing processes and high-cost processing leads to an increase in the overall cost of these chemicals. Manufacturing also requires the need for skilled labor and big machinery. Such factors directly influence the price of bio-based chemicals and make them costlier. Also, when compared to synthetic counterparts, certain renewable alternatives have proved to be exceedingly expensive. Moreover, lack of consumer understanding and lower purchasing power of these chemicals, particularly in Africa and Asia Pacific’s growing economies, may also restrict product consumption.

Renewable Chemicals Market Segmentation Analysis

By Type Analysis

Alcohols Segment to Hold Largest Share in Market due to its Increasing Adoption in Bio-fuels

Based on type, the market is segmented into alcohols, biopolymers, organic acids, ketones, and others. The alcohols segment is anticipated to hold the highest market share in the global market for renewable chemicals. Non-renewable resources have become scarcer and the fluctuating crude oil prices have increased the demand for bio-alcohols such as bioethanol, biobutanol, and bio methanol. The rising need for vehicles as a result of population increase has boosted demand for biofuels in emerging nations and the bio-alcohol market potential. Also, renewable alcohol is ecologically friendly and helps minimize carbon emissions compared to conventional fuels. Hence, such factors will promote the segment growth during the forecasted timeframe.

The bio-polymers segment is forecast to grow at the highest CAGR during 2024-2032. Biopolymers offer excellent mechanical properties and beneficial characteristics such as catalysis of bio-activity, wound healing, and non-toxicity. Such properties increase their demand in tissue engineering, regenerative medicine, and drug delivery. Organic acid comprises acetic acid, lactic acid, uric acid, oxalic acid, and malic acid. These acids are generally added to foods as flavorings, preservatives, and acidulants to inactivate or inhibit the growth of foodborne pathogens and spoilage microorganisms. Rising health consciousness amongst the people coupled with increasing demand for ketone-based beverages to lose weight will augment the ketones segment growth.  

By Application Analysis

Petrochemical Segment was Largest Application owing to Rising Product Demand from Chemicals Industry

Based on application, the market is segmented into petrochemical, pharmaceutical, packaging products, cleaning & detergent products, automotive, and others. The petrochemical segment held the highest renewable chemicals market share in 2023. The rapid growth of the chemical industry, in China and India, due to increasing demand for chemicals from various end-use industries such as pharmaceutical, food & beverages, consumer goods, and agriculture has fueled the segment growth.

The packaging industry is expected to register the fastest growth rate during the forecast period. Biopolymers, such as polysaccharides, lipids, polyesters, and proteins, are mainly adopted in packaging. The demand is attributed to their better optical and mechanical properties. This results in increased product demand in this segment. The rapidly growing healthcare industry and high demand for organic acid, formic acid, and acetic acid in the pharmaceutical industry will propel the segment growth. In the cleaning & detergent segment, bio-based enzymes and surfactants are used in detergent. This helps remove dirt and ensures a higher degree of stain removal, fabric & color care, whiteness, and overall cleaning performance. The rapid growth of the automotive industry and innovation in hybrid & passenger vehicles will fuel the product demand from the automotive segment. This will increase the demand for polybutylene succinate (PBS), a biopolymer, owing to its good tensile strength and heat resistance properties.

REGIONAL INSIGHTS

The renewable chemicals market size in Asia Pacific stood at USD 88.5 billion in 2023. The increasing environmental concern has led governments within the region to promote the production of eco-friendly products & chemicals. This is surging the product demand, thereby contributing toward the market growth in Asia Pacific. In this region, China holds the highest market share and is the fastest-growing country. The rising manufacturing of bio-polymers, increasing research & development activities, and growing chemical industry are prominent factors fueling the demand for bio-based chemicals in China.

In North America, the U.S. is a leading contributor due to expansion in e-commerce and food & beverage industries. This increases the demand for biopolymers and ketones applications in packaging and beverages. In Europe, the high demand for the product is associated with growth in the automotive industry. The increasing adoption of ethylene glycol as a coolant for engines as it offers superior protection against boil-over, freezing, cavitation, erosion, and corrosion is fueling regional growth.

In Latin America, the market growth is attributed to the rising consumption of alcohols such as ethanol and methanol in the solvents industry utilized in the cosmetics, beverages, and pharmaceuticals industries. Moreover, the pharmaceutical industry expansion in the Middle East & Africa will showcase significant market growth in the near future. This expansion results in increasing demand for biopolymers in tissue engineering and drug delivery applications. Hence, rapid growth of the pharmaceutical industry is fueling the market growth in the Middle East & Africa.

List of Key Companies in Renewable Chemicals Market

Business Expansion is a Strategic Initiative Implemented by Companies

Key companies operating in the market are Trucent, BRASKEM, Archer-Daniels-Midland Company (ADM), Amyris Inc., and BASF SE. These companies are involved in capacity improvement, product innovation, acquisition, and collaborations in the market. BRASKEM is a petrochemical company in Latin America and a leading player in the international chemical markets. The company has been investing in research & developments to improve the efficiency of natural resources and post-consumer waste. Its renewable chemicals research center was established in 2014 and recognized with some of the company's most important breakthroughs.

LIST OF KEY COMPANIES PROFILED

• Trucent (U.S.)


• BRASKEM (Brazil)


• Archer-Daniels-Midland Company (ADM) (U.S.)


• Amyris Inc. (U.S.)


• BASF SE (Germany)


• Bioamber Inc (Canada)


• Biomethanol Chemie Nederland B.V (Netherlands)


• Cargill Inc (U.S.)


• DSM, E. I (Netherlands)


• Mitsubishi Chemical Corporation (Japan)

KEY INDUSTRY DEVELOPMENTS

• November 2023: BASF published the first responsible sourcing report and announced the company’s purchase of 1.2 million metric tons of renewable raw material in 2022. Switching from fossil to bio-based starting material can have good outcomes such as reduced greenhouse gas emissions and aligns with BASF’s commitment to sustainability.


• July 2020: Praj Industries launched a new Bio-Prism portfolio that manufactures bio-based renewable chemicals and materials (RCM). Praj’s Bio-Prism portfolio comprises a variety of bio-industrial products, including bioplastics as a priority along with cellulose-lignin refinery products and specialty products. This launch expands its product portfolio and will help in revenue generation.

REPORT COVERAGE

The market research report provides a detailed analysis of the market and focuses on crucial aspects such as leading companies, product types, applications, and products. Also, it provides quantitative data in terms of volume and value, market analysis, research methodology for market data, and insights into market trends. It highlights vital industry developments and the competitive landscape. In addition to the factors mentioned above, the report encompasses various factors that have contributed to the growth of the market in recent years.

Report Scope & Segmentation