Global Bio-Renewable Chemicals Market Expected to Reach $7.4 Billion by 2031—Allied Market Research

According to a new report published by Allied Market Research, titled, “Global Bio-Renewable Chemicals Market," The global bio-renewable chemicals market was valued at $2.5 billion in 2021, and is estimated to reach $7.4 billion by 2031, growing at a CAGR of 11.6% from 2022 to 2031. 

Bio-renewable chemicals refer to chemicals obtained from agricultural feedstock and waste, biomass, organic waste products, and other renewable sources. Some examples of bio-renewable chemicals include succinic acid, poly lactic acid, polypropylene, acetone, and others. These chemicals find application in various end use sectors including packaging, bio-plastics, food & beverages, textile, and others.

Bio-based production refineries are novel, productive models that are focused on the production of bio-based chemical alternatives to fossil-based chemicals. Increase in concerns pertaining to sustainability and adverse environmental impact boosts the demand for bio-renewable chemicals. Bio-renewable chemicals are expected to replace the fossil-based chemicals completely during the next few years. This is attributed to low environmental impact while using bio-renewable chemicals and similar properties when compared to fossil-based chemicals. These factors are predicted to notably contribute toward the growth of the global bio-renewable chemicals market during the forecast period.

Bio-renewable chemicals are expected to face tough competition from its fossil-based counterpart until a commercial production process for the production of bio-renewable chemicals are streamlined. This factor is expected to hamper the growth of the global bio-renewable chemicals market during the forecast period.

On the contrary, bio-renewable chemicals exhibit several advantages over fossil-based chemicals such as they reduce greenhouse gas emissions by more than 60% during its lifecycle as compared to fossil-based chemicals. This factor is anticipated to create remunerative opportunities for the expansion of the bio-renewable chemicals market in the future.

The bio-renewable chemicals market is segmented on the basis of type, application, and region. By type, the market is segregated into glycerol, lactic acid, succinic acid, acetone, and others. The glycerol segment dominated the global market in terms of revenue in 2021, with 50.2% of the total share. The increasing disposable income coupled with awareness for skin care activities have led the cosmetic sector in both developed and developing economies to witness a significant growth where glycerin is widely used as a denaturant, fragrance ingredient, hair conditioning agent, humectant, and others in various cosmetic and personal care products. This may act as one of the key drivers responsible for the growth of the bio-renewable chemicals market for glycerol type.

By application, the market is divided into packaging, food & beverages, personal care & cosmetics, chemical industry, and others. The chemical industry segment dominated the global market in terms of revenue in 2021, with 29.2% of the total share. Rising awareness for sustainability and environmental protection activities have led the major chemical manufacturing companies to shift their production from synthetic chemicals towards bio-renewable chemicals. This factor may surge the utilization of bio-renewable chemicals in the growing chemical manufacturing sector; thus, boosting the market growth.

Region-wise, the bio-renewable chemicals market is analyzed across North America, Europe, Asia-Pacific, and LAMEA. The Asia-Pacific bio-renewable chemicals market size is projected to grow at the highest CAGR during the forecast period, and accounted for a major bio-renewable chemicals market share in 2021. The increasing shift towards eco-friendly activities have surged the potential application of bio-renewable chemicals in the Asia-Pacific region. Furthermore, easy availability of plant and animal-based renewable feedstock from sectors such as agriculture, biorefineries, and others have strengthened the demand for bio-renewable feedstock for the production of bio-renewable chemicals in the Asia-Pacific region.

Key players operating in the global bio-renewable chemicals market include Gevo, Inc., Vizag Chemical, Solvay, BASF SE, Unilever PLC, ZeaChem, Cargill, Incorporated, DuPont de Nemours, Inc., Elevance Health, and Amyris.

COVID-19 analysis

The bio-renewable chemicals market had been negatively impacted due to the wake of the COVID-19 pandemic, owing to its dependence on the food & beverage, textile, and other industrial sectors. According to a report published by the Organization for Economic Co-operation and Development (OECD), decreased consumer demand has put downward pressure on the prices and production of chemical-based products. In addition, more than 100 countries have locked their international borders for transportation and nonessential trade activities, which, in turn, have led to demand–supply disruptions for bio-renewable chemicals market.

Furthermore, the temporary shutdown of textiles and food processing industries amid the COVID-19 period has reduced the consumption of bio-renewable chemicals. Several companies have either shut down or shrank their operations due to the risk of infection among the workforce. This has temporarily hampered the demand and supply gap of the bio-renewable chemicals. In addition, the declining income of customers has led to the contraction of the demand for consumer products amid the COVID-19 period. In addition, factors such as financial stress, reduction of demand, and disruptions of the power supply chain have negatively impacted the chemical sector, which, in turn, has decreased the demand for bio-renewable chemicals amid the COVID-19 scenario.

However, several key players such as Cargill, BASF, DuPont, and others are constantly engaged in increasing their production and seeking for new investment opportunities amid the COVID-19 situation. For instance, BASF has been producing commercial production of bio-butanediol and has secured rights to produce bio-butanediol up to 75,000 tons per annum.

Moreover, in June 2021, Cargill and HELM established a joint venture, Qore, for the production of bio-based products. As a part of the agreement, both companies have invested approximately $300 million to build the commercial-scale production facility of bio-renewable chemical such as bio-butanediol in the U.S. to provide automotive, packaging, apparel, and electronics industries the ability to improve their environmental footprint and to produce robust product without sacrificing the quality. These factors have fueled the growth of the bio-renewable chemicals post COVID-19 period.

Key findings of the study:

• By type, the glycerol segment is estimated to display the highest growth rate, in terms of revenue, registering a CAGR of 11.8% from 2022 to 2031.
• By application, the chemical industry is estimated to display the highest growth rate, in terms of revenue, registering a CAGR of 12.0% from 2022 to 2031.
• By region, Asia-Pacific garnered the highest share of 35.2% in 2021, in terms of revenue, growing at a CAGR of 12.2%.