Bio-Based Chemicals Market - Industry Dynamics, Market Size, And Opportunity Forecast To 2031

Market Scenario

Global bio-based chemicals market is projected to offer a revenue opportunity of US$ 137.40 billion during the forecast period 2023–2031 and is estimated to reach a valuation of US$ 271.76 billion by 2031, at a CAGR of 9.2% from 2023-2031. 

As the environmental and health concerns associated with traditional chemicals become more prevalent, the demand for bio-based chemicals is growing. Bio-based chemicals are derived from renewable resources and are often more sustainable and environmentally friendly than their synthetic counterparts. The growing demand for bio-based chemicals can be attributed to the increasing awareness about the environmental benefits of these products, as well as government policies promoting the use of renewable resources. 

The automotive industry is one of the largest users in the global bio-based chemicals market due to the need for lightweight materials that reduce fuel consumption. Bio-based plastics are being used in vehicles to reduce weight and increase fuel efficiency. In addition, bio-based adhesives are being used in the automotive industry to improve durability and reduce emissions. The construction industry is another major user of bio-based chemicals, as these products can improve the sustainability of construction projects. Bio-based insulation materials can help reduce energy consumption, while bio-based adhesives can improve the durability of buildings. The food and beverage industry is also increasingly turning to bio-based chemicals to improve the sustainability of their products.  

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Market Dynamics of the Global Bio-Based Chemicals Market 

Drivers 

The report cites various factors driving the demand for bio-based chemicals, including 

• Need for more sustainable and environmentally friendly products: The growing demand for sustainable and environmentally friendly products is one of the major factors driving the market for bio-based chemicals. With the increasing awareness of the adverse impact of conventional chemicals on the environment, consumers are demanding more eco-friendly alternatives. This has led manufacturers to develop more sustainable products, made from renewable resources such as plant oils, animal fats, and biomass.
• Government regulations encouraging the use of bio-based chemicals: Regulations encouraging the use of bio-based chemicals are also playing a role in boosting bio-based chemicals market growth. In Europe, the Renewable Energy Directive (RED) requires that 15% of transportation fuels come from renewable sources by the end of 2022. This has created a significant demand for biofuels, as well as other bio-based chemicals used in a variety of industries.
• Increasing availability of feedstocks:  the increasing availability of feedstocks is making it easier and more cost-effective to produce bio-based chemicals. With the development of new technologies, a wider range of biomass materials can be utilized as feedstocks for bio-based chemical production. This includes agricultural waste such as straw and corn stover, as well as forestry residues like wood chips and bark.

Current Trends in the market

Increasing Demand for Platform Based Bio Based Chemicals across Various Industries

Bio-based platform chemicals are a sustainable alternative to traditional petroleum-based chemicals and are widely used in the production of packaging materials such as biodegradable adhesives, polymers, and plastics. This makes them ideal for use in packaging applications, as they are more environmentally friendly and biodegradable. In addition to packaging, bio-based platform chemicals also have applications in the pharmaceutical industry as raw materials for Active Pharmaceutical Ingredients (API) and as additives in drug formulation.

As the demand for eco-friendly and sustainable products increases, companies in the global bio-based chemicals market are investing in increasing the production capacity of bio-based platform chemicals to meet this growing demand. This is an important factor driving the growth of the market for bio-based platform chemicals.

Furthermore, Government regulations are also playing a key role in the growth of the bio-based platform chemical market. Governments around the world are imposing strict regulations on the use of traditional chemicals and promoting the use of bio-based alternatives. This has led to an increase in the demand for bio-based platform chemicals in different industries, and is expected to drive the market's growth in the forecast period.

In addition, the increasing awareness about the environmental benefits of bio-based platform chemicals is also expected to drive the market's growth in the forecast period. As consumers become more environmentally conscious, they are demanding more sustainable products, which is driving the demand for bio-based platform chemicals.

Restraints 

High Cost of The Bio Based Product

The high cost of bio-based chemicals is a major barrier to bio-based chemicals market growth. The cost of production is a major obstacle to the expansion of the market, as it is generally higher than that of traditional resources. The complex processing methods used in the production of bio-based chemicals also contribute to the high cost of production. Furthermore, the manufacturing and plant installation require significant capital expenditures, making bio-based chemicals risky investments in terms of initial infrastructure costs and potential future sales. This is particularly evident in the case of bio lubricants, where the cost of raw materials represents a significant portion of the total cost. In fact, the cost of bio lubricants is 4 to 15 times higher than that of mineral oils.

Additionally, the lack of economies of scale also adds to the cost of bio-based chemicals. As the demand for bio-based chemicals market is still relatively low, companies are unable to achieve the same economies of scale as traditional chemical manufacturers, thus making the cost of production higher.

Despite the high cost, the benefits of bio-based chemicals such as environmental friendliness, biodegradability, and sustainability make them an attractive alternative to traditional chemicals. However, to make them more accessible, it is important for companies to invest in the research and development of new, cost-efficient production methods and to increase the scale of production.

Market Segmentation

Type Analysis

In terms of product types, the bio-based platform chemicals market is segmented into Bio-Solvents, Bio-Lubricants, Bioplastics, Bio-Surfactants, Bio-Alcohols, Bio-Based Acids, and Others. The Bioplastics segment is expected to dominate the market with the highest market share of 28.8% in 2022. It is also projected to maintain its dominance in the global bio-based chemicals market over the forecast period with the highest CAGR due to its increasing demand for "eco-friendly" plastics. The major environmental concerns associated with the extensive use of synthetic plastics are their non-biodegradability, the production of toxins during their degradation, and the pressure on landfills. Bioplastics, which are made from renewable resources, are a sustainable alternative that addresses these concerns.

Moreover, governments and organizations around the world are also promoting the use of bioplastics as a measure to reduce plastic waste and environmental pollution. Additionally, the increasing demand for bioplastics in various end-use industries, such as packaging, agriculture, and automotive, is also expected to drive the market's growth.

Furthermore, the development of advanced bioplastics with improved properties, such as increased strength and durability, is expected to boost the bio-based chemicals market  growth over the forecast period. Companies are investing in R&D to develop new, cost-efficient production methods to reduce the production cost and improve the performance of bioplastics.

Application Analysis

In terms of application, the bio-based chemicals market is segmented into Automotive, Pharmaceutical, Food & Beverage, Agriculture, Industrial, Personal care, Pharmaceutical, Packaging, and Others. The Industrial segment is expected to dominate the market with the highest market share and is also projected to grow at the highest CAGR. This is due to the increasing use of bio-based products in industrial applications, as they offer a sustainable alternative to traditional chemicals.

The industrial segment includes various applications such as paints & coatings, adhesives, lubricants, and polymers among others. These applications are witnessing a growing demand for bio-based chemicals as they are biodegradable, eco-friendly and sustainable.

Furthermore, significant investments in research and development to develop new and cost-efficient production methods are also expected to add fuel to the bio-based chemicals market growth. Companies are investing in R&D to develop new bio-based products with improved properties and to reduce the production cost, making them more accessible for industrial applications.

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Regional Analysis:

Europe dominated the market share with 35% in 2022. This is primarily due to the support of the European Commission, which has put bio-based chemicals under the spotlight. The European Commission's DG Research & Innovation, in collaboration with the Biomass Technology Group and the JRC, has produced the first-ever study to quantify the untapped market potential of bio-based chemicals from 2018 to 2025. This has helped to increase awareness and support for bio-based chemicals in the region.

The Asia Pacific region holds the second-highest share in the global bio-based chemicals market, and is expected to grow at the highest CAGR rate of 11.4% over the forecast period. The flow of investment has been increasing in recent years, which is expected to continue to expand the market growth in the forecast period. For instance, the investment by BASF in the development of enzymes & Microbes will help to produce sweeteners, personal care products, vitamins, and solutions to detect crop protection among others.

Additionally, the growth of the market in the Asia Pacific region is also driven by the increasing demand for bio-based products in various end-use industries, such as packaging, agriculture, and automotive. Governments and organizations in the region are also promoting the use of bio-based chemicals as a measure to reduce plastic waste and environmental pollution.

Overall, Europe and the Asia Pacific region are expected to be the major contributors to the global bio-based chemicals market, with Europe leading in market share, and the Asia Pacific region having the highest CAGR over the forecast period, driven by government support, increasing investments, and expanding end-use industries.

Key Industry Players:

Archer Daniels Midland Company, Cargill Incorporated,Dow Chemicals, Toray Industries Inc., Mitsubishi Chemical Corporation, and BASS SE are top 6 players in the global bio-based chemicals market. These players are collectively accounted for 33.9% market share in 2022.

List of Key Companies Profiled:

• AGAE Technologies
• Archer Daniels Midland Company
• BASF SE
• Braskem SA
• Cargill Incorporated
• Koninklijke DSM N.V
• Dow Chemicals
• DuPont
• Evonik Industries
• GFBiochemicals Ltd.
• IP Group PLC
• Lyondellbasell
• Mitsubishi Chemical Corporation
• Toray Industries Inc.
• Total Energies
• Vertec BioSolvents
• Other Prominent Players

Major market players adopted recent strategies that includes:

• Cargill & Croda collaborated under an agreement to acquire most of its Performance Technologies and Industrial Chemicals (PTIC) business. The acquisition has greatly expanded Cargill's presence in high-growth markets for bio-based solutions in regions including Europe, the United States and Asia.
• Several advancements were undertaken by the Dow chemical to minimize plastic waste, enable recycled plastic products to end customers that will bring down green house gas emission as well. Its major partnership with EcoSynthetix will help the company to develop low-carbon, environment friendly bio-based solution for personal care products.
• Mitsubishi Chemical Corporation has announced the development of BioPTMG - a new PTMG (polytetramethylene ether glycol) material made from vegetable raw materials.

Segmentation Overview

(Note*: We also provide granular level reports, made to sub-segment level or only for niche segments. Contact us, if you require more details.)

The global Bio-Based Chemicals Market is segmented into:

By Type segment of the Global Bio-Based Chemicals Market is sub-segmented into:

• Bio-Lubricants
• Bio-Solvents
  • Tetrahydrofuran
  • Cyclopentanone
  • Tetrahydropyran
  • Others
• Bioplastics
  • Biodegradable Bioplastics
  • Non-Biodegradable Bioplastics
• Bio-Alcohols
  • 1,3-propanediol
  • 1,6-hexanediol
  • 1,10-decanediol
  • Others
• Bio-Surfactants
• Bio-Based Acids
  • Succinic acid
  • Furfural
  • Butadiene
  • 1-4 BDO
  • Others
• Others

By Application segment of the Global Bio-Based Chemicals Market is sub-segmented into:

• Automotive
• Personal Care
• Food & Beverages
• Agriculture
• Industrial
• Pharmaceuticals
• Packaging
• Others

By Region

• North America
  • The U.S.
  • Canada
  • Mexico
• Europe
  • Western Europe
    • The UK
    • Germany
    • France
    • Italy
    • Spain
    • Rest of Western Europe
  • Eastern Europe
    • Poland 
    • Russia
    • Rest of Eastern Europe
• Asia Pacific
  • China
  • India
  • South Korea
  • Japan
  • Australia & New Zealand
  • ASEAN
    • Malaysia
    • Myanmar
    • Philippines
    • Singapore
    • Thailand
    • Vietnam
    • Indonesia
    • Cambodia
    • Rest of ASEAN
  • Rest of Asia Pacific
• Middle East & Africa (MEA)
  • UAE
  • Saudi Arabia
  • South Africa
  • Rest of MEA
• South America
  • Argentina
  • Brazil
  • Rest of South America