Renewable Chemicals Market

The global Renewable Chemicals Market is valued at USD 118.6 Billion in 2022 and is projected to reach a value of USD 257.3 Billion by 2030 at a CAGR (Compound Annual Growth Rate) of 11.7% between 2023 and 2030.

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The surge in environmental apprehensions coupled with governmental support for eco-conscious materials propels the growth of Renewable Chemicals. The International Energy Agency's Global Energy Review 2022 forecasts a 4.8% expansion in energy-related CO2 emissions due to escalating coal, oil, and gas demand. This increase of around 1,500 Mt CO2, surpassing previous carbon-intensive recoveries, heightens concerns. Renewable Chemicals mitigate waste and obviate costly waste management, hazardous disposal, and end-of-pipe procedures. Addressing mounting greenhouse gas emissions, they are pivotal in curtailing carbon footprints. Additionally, economical biomass feedstocks, environmentally friendly goods, and evolving technologies such as repurposing used bottles for polyurethane manufacturing are poised to invigorate the sector.

• The demand for Alcohol in the Renewable Chemicals market will notably increase by Product Type during the projection period from 2023 to 2030.
• The Transportation segment will continue to assert its dominance by Application, capturing the largest market share globally from 2023 to 2030.
• In 2022, the Asia Pacific region exhibited its market prowess, achieving the highest revenue share of 50.50%.
• The North American region is poised for remarkable growth, displaying a noteworthy Compound Annual Growth Rate (CAGR) between 2023 and 2030.

Top Market Trends

1. Consumers are becoming increasingly conscious of sustainability and are seeking out products made from renewable sources. This has created a strong market demand for Renewable Chemicals that can be used in various industries such as packaging, agriculture, and cosmetics.
2. Many governments worldwide are implementing policies and regulations that support the development and use of Renewable Chemicals. This includes renewable fuel standards, tax incentives, and grants for research and development. These supportive measures have helped to boost market growth and attract investment in the Renewable Chemicals industry.
3. The Renewable Chemicals industry continually evolves and advances as new technologies and processes are developed. This includes using novel feedstocks, such as algae and waste biomass, and the development of new conversion technologies. These advancements are helping to improve the efficiency and cost-effectiveness of renewable chemical production, making them more competitive with traditional, fossil fuel-based chemicals.
4. Collaboration between stakeholders in the Renewable Chemicals industry, such as manufacturers, researchers, and governments, is becoming increasingly important. This includes collaborations to develop new technologies, exchange knowledge and expertise, and secure funding for research and development. These partnerships are helping to accelerate the growth of the Renewable Chemicals market and drive innovation.
5. The Renewable Chemicals industry has attracted significant investment and funding from private and public sectors. This is driven by the increasing market demand for sustainable products and the potential for significant financial returns. This investment is being used to develop new technologies, scale up production, and expand market reach, further driving growth in the Renewable Chemicals market.
6. The concept of a circular economy, where resources are used efficiently, and waste is minimized, is gaining traction in the chemicals industry. This includes developing closed-loop systems, where Renewable Chemicals are used and reused throughout the supply chain. This shift towards a circular economy drives demand for Renewable Chemicals that can be recycled or biodegraded, further boosting market growth.

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Economic Insights

The restrictions that the government imposes on environmental tax to discourage the use of fossil fuels are also a supporting factor in the rise in the demand for eco-friendly chemicals. In 2020, the U.S. federal government charged USD 24-39/tCO2e (tonnes of carbon dioxide equivalent) from various manufacturers. However, several manufacturers have added bio-ethanol to their product portfolio to promote environment-friendliness. The COVID-19 outbreak has resulted in a lowering demand for chemicals. The explosion of COVID-19 resulted in a decline in oil rates due to a reduction in oil consumption worldwide by roughly 29 Mn barrels per day. It resulted in an ample supply of crude oil in the global market, making synthetic chemicals and materials cheaper. This reduction in the costs had a detrimental impact on renewable chemical production.

Market Segmentation

The Global Renewable Chemicals Market can be segmented across different segments as mentioned below:

The global Renewable Chemicals market can be categorized into Product Type, Application, Region. The Renewable Chemicals market can be categorized into Alcohols, Biopolymers, Ketones, Starch Blends, Platform Chemicals, Organic Acids, Other Product Types based on Product Type. The Renewable Chemicals market can be categorized into Agriculture, Textiles, Environment, Transportation, Food & Beverage Packaging, Communication, Bio-Medical, Other Applications based on Application. The Renewable Chemicals market can be categorized into North America, Europe, Asia Pacific, Latin America, Middle East & Africa based on Region.

Based on Product Type

The Adhesive Bonded to Lead to Maximum Market Share Due to the Use of High-Strength Adhesives Used for the Bonding of Planks

In 2022, the alcohol segment is poised to dominate the global market for Renewable Chemicals. Escalating scarcity of non-renewable resources and volatile crude oil prices have spurred the demand for bio-alcohols like bioethanol, biobutanol, and bio-methanol. Surging vehicle necessities due to population upsurge have amplified the need for biofuels in emerging economies, propelling the bio-alcohol market. Moreover, eco-friendliness and reduced carbon emissions of renewable alcohol compared to traditional fuels will further drive segment growth in the projected period.

Based on Application

The Transportation Segment expects Dominance Owing to the Growing Demand for Sustainable and Environmentally Friendly Transportation Solutions

In 2021, the Transportation segment dominated the Renewable Chemicals market. The biomass, wood chips, crop residues, etc., are converted to renewable transportation fuels. The various types of bio-based alcohols like bio-butanol, bioethanol, and bio-methanol are used as fuel in jets. Bioethanol is the most widely used source of energy for transportation. The use of bioethanol is projected to increase significantly in the coming years and remain high. This shift toward more bio-ethanol usage will provide more opportunities in the future. Methane is another renewable chemical used as a transportation fuel and is the major component of compressed natural gas. It is produced from biomass by a biochemical process called anaerobic digestion. Biodiesel is a renewable diesel substitute made by mixing crude oil or fat with an alcohol (usually methanol). Through transformation, Biodiesel can originate from vegetable oils, animal fats, and recycled cooking greases.

Based on Region

Asia Pacific To Dominate Global Sales Owing to High Demand for Sustainable and Eco-friendly Solutions Across Various Industries

In 2022, the Asia Pacific emerged as the dominant player in the Renewable Chemicals market. With an increased focus on sustainability and a shift towards bio-based alternatives, the region witnessed significant growth in renewable chemical production and consumption. Moreover, the presence of key market players, the availability of raw materials, and favorable government policies have contributed to the region's dominance in the Renewable Chemicals market. The continuous efforts towards innovation and technological advancements in Renewable Chemicals have also boosted market growth in the Asia Pacific region.

The Renewable Chemicals industry in North America is rapidly gaining popularity. The region is witnessing a growing demand for biofuels, bioplastics, and biochemicals as alternatives to conventional petroleum-based products. Factors such as government support, significant investments in research and development, and favorable regulatory frameworks drive the market's growth.

Competitive Landscape

The global Renewable Chemicals market is highly competitive, with various key players operating. Some major companies in the market include BASF SE, Archer Daniels Midland Company, Corbion, BioAmber Inc., and Braskem. These companies focus on research and development activities to develop innovative and sustainable products. Additionally, strategic alliances, mergers, and acquisitions are frequent in the market as companies aim to expand their product offerings and market presence.

The key players in the global Renewable Chemicals market include - BASF SE (Germany), Mitsubishi Chemical Holdings Corporation (Japan), DAIKIN (Japan), 3M (U.S.), Braskem (Brazil), Corbion N.V. (Netherlands), NatureWorks LLC (U.S.), Amyris (U.S.), OCI N.V. (Netherlands), Solvay (Belgium), DSM (Netherlands), Genomatica Inc. (U.S.), Cobalt Technology, LLC. (U.S.), Elevance (U.S.), Evonik Industries AG (Germany), DuPont (U.S.), Novamont S.p.A. (Italy), Novozymes (Denmark), AVERY DENNISON CORPORATION (U.S.), Mitsui Chemicals Inc. (Japan) among others.

Recent Market Developments

• In April 2021, Du Pont shifted towards sustainability, aiming to cut carbon emissions, enhance efficiency, and reduce waste for improved operations and higher energy efficiency.
• In October 2021, Japan's Mitsubishi Chemical Holdings planned around $875 Mn investment by 2030, focussing on solar energy recycling using vegetable oils for plastics. Goal: net-zero greenhouse emissions by 2050.
• In September 2021, BASF SE acquired 49.5% of Vattenfall's Holland Kust Zuid wind farm, under construction since July 2021, in the Dutch North Sea. The subsidy-free offshore project is set to operate in 2023, marking BASF's significant debut in renewable energy investment.

Segmentation of the Global Renewable Chemicals Market