The Bio-based Chemicals market will grow at a CAGR of 15.64% from USD 89.354 billion in 2025 to USD 184.797 billion in 2030.
Bio-based chemicals are characterized as those classes of chemicals that are created by utilizing natural feedstock and have negligible effects on the environment. In the past, bio-based chemical items were seldom able to compete with traditional petrochemical items. However, with the progression in strategies and technologies, the bio-based chemical industry has ended up positively beneficial and is presently poised to dominate a large share of the market globally.
Bioplastics holds a significant share of the market owing to its expanded utilization in a variety of products including packaging, customer electronics coating, and construction and biomedical materials.
Packaging takes a critical share of the market owing to the larger part of bio-based items being utilized in this industry. Government activities to empower sustainable items and processes across different businesses to reduce carbon dioxide emissions play a fundamental part in the development of bio-based chemicals.
The market is expected to grow at a steady pace over the forecasted period owing to the increasing R&D activities in this field by diverse companies, institutes, and supportive government investments and regulatory measures. The major benefit of utilizing bio-based chemicals is that the feedstock utilized is available in large amounts in the environment and is recyclable in nature.
The rising issue of Climate change and the depletion of fossil feedstocks are the major driving factors that are propelling the requirement for bio-based chemicals globally. Growing worldwide environmental mindfulness and a sharp rise in oil costs are compelling producers in this industry to search for alternative sources to replace traditional petroleum in developing different products.
Governments globally are focusing on handling environmental issues like climate change and plastic pollution, with bio-based chemicals developing as a sustainable alternative. Directions to diminish greenhouse gas emissions can incentivize companies to switch to bio-based choices with lower carbon emissions. Bans on single-use plastics can make demand for bioplastics, a major application of bio-based chemicals.
Besides, governments are adjusting to the yearning for sustainability objectives, making bio-based chemicals alluring. Government financing can quicken the progression of bio-based chemicals, whereas incentives like tax breaks or subsidies can make them more cost-competitive. The European Union's Green Deal focuses on attaining climate neutrality by 2050, which incorporates promoting the utilization of bio-based chemical products.
R&D endeavors are aimed at making bio-based chemicals that can beat conventional fossil fuel-derived choices. This incorporates improving quality and strength, heat resistance, and functional differences. R&D is pivotal for optimizing production forms, leading to more effective feedstock utilization, improved transformation processes, and economies of scale. By decreasing waste and bringing down costs, bio-based chemicals can become more cost-competitive with traditional alternatives.
Moreover, R&D is key to creating new items with special functionalities, opening entryways to innovative applications in different segments, and making new market openings. By focusing on these ranges, R&D can lead to more proficient feedstock utilization, quicker production times, and decreased energy utilization. For instance, in June 2024, BASF collaborated with universities in Saarland, Marburg, and Kaiserslautern to develop a CO2-neutral bio-based fumarate utilizing bacteria present in cow stomachs. The bacteria, which use sugar and CO2 to produce fumarate, are essential for the chemical industry. The project aims to convert sugar and carbon dioxide into fumaric acid, a crucial intermediate for chemical production.
Often, the cost of producing bio-based chemicals is much higher than conventional petroleum-derived ones due to variables such as high feedstock costs, economic scale, and processing inefficiencies. Sustainable feedstock is expensive, especially when competing with food production. The traditional chemical industry benefits from economies of scale due to its long-established infrastructure. These restraints are being addressed through research in feedstock optimization and development of infrastructure, as well as process efficiency improvements.
Asia Pacific holds a significant size of the market due to initiatives and measures taken by the countries such as Japan, and China to encourage the production of bio-based chemicals in their respective nations. Air and water pollution are major issues in the Asia Pacific region, leading to increased demand for bio-based chemicals.
Furthermore, the region's strong manufacturing base and skilled workforce make it a viable market for bio-based chemicals. For instance, in August 2023, Braskem and SCG Chemicals signed a joint venture agreement to develop Braskem Siam Company Limited, a bio-based Ethylene project in Thailand. The joint venture aims to produce bio-ethylene from bio-ethanol dehydration and commercialize I'm green TM bio-based polyethylene (PE) using the EtE Ever Green TM technology, developed from a partnership corporation between Braskem B.V. and Lummus Technology LLC.
The Asia Pacific region has large sustainability goals that can be completed by decreasing reliance on fossil fuels as well as emissions from greenhouse gases. By aligning existing production facilities and utilizing a skilled workforce, the bio-based chemicals industry can develop and contribute to a more sustainable future in the region. The chemical industry in the region is also taking strides towards bio-based options. For example, Tata Chemicals aims at new sustainable chemistries as well as developing bio-based surfactants. This represents that established companies present in the Asia Pacific region are incorporating bio-based solutions into their product portfolios.
Bio-Based Chemicals Market is analyzed into the following segments: