Bio-based Chemicals Market Size, Share & COVID-19 Impact Analysis, By Product Category (Platform Chemicals; Polymers for Plastics; Paints, Coatings, Inks & Dyes; Surfactants; Cosmetics & Personal Care; Adhesives; Man-made fibers, and Others), By Application (Industrial, Agricultural, Pharmaceutical, and Others) and Regional Forecast, 2021-2028

The global bio-based chemicals market size was USD 73.16 billion in 2020. The market is projected to grow from USD 77.10 billion in 2021 to USD 144.63 billion in 2028 at a CAGR of 9.4% during the 2021-2028 period. The global impact of COVID-19 has been unprecedented and staggering, with Bio-based Chemicals witnessing a decline in demand across all regions amid the pandemic. Based on our analysis, the global market exhibited a decline of 1.5% in 2020. The sudden rise in CAGR is attributable to this market’s demand and growth, returning to pre-pandemic levels once the pandemic is over.

The chemicals derived from biomass or biological origin sources such as corn, sugar, cellulosic feedstock, and biodegradable waste are Bio-based Chemicals. The rising demand for these chemicals from industries such as pharmaceutical, food & beverage, textiles, and automotive is expected to drive the growth of the market. The depleting petroleum sources from which conventional chemicals are derived, and rising pollution levels are compelling various industries to adopt Bio-based products. However, the high cost of these chemicals will act as a restraint for the market.

COVID-19 IMPACT  

Decline in Raw Material Availability to Impede Market Growth during COVID-19 Pandemic

The global lockdown amidst the COVID-19 pandemic constrained the movement of raw materials and resources, resulting in disruptions in the supply chain of Bio-based Chemicals producers. The strict curfews globally led to stockpiling of basic staples and long-lasting foods such as rice, wheat, sugar, edible oils, and others. The increasing consumption of agricultural produce created a shortage of raw materials required for chemical production. The companies operating in the market witnessed production line closures and a temporary shutdown of manufacturing facilities. Furthermore, ample supply of crude oil globally has helped synthetic chemical manufacturers to procure raw materials at lower cost, which also had a significant impact on the production of the chemicals.

LATEST TRENDS

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Increasing Investments in Research & Development Activities to Boost Market Development

The demand for renewable chemicals is projected to rise due to the growing support of the governments towards Bio-based Chemicals production by introducing favorable regulations and promoting the adoption of Bio-based products in industries such as agricultural, pharmaceutical, and energy. Currently, the technological changes required for the large scale production of biologically derived products are huge. The increasing investments by the manufacturers towards the development of technologies and supportive government regulations will positively influence the bio-based chemicals industry growth. Additionally, the establishment of new biomass refineries will create lucrative growth opportunities for the market players.

DRIVING FACTORS

Rising Consumption of Bio-based Products to Provide Impetus to Market

The rapid exhaustion of fossil fuels and the rising greenhouse gas emissions across the globe has fueled the demand for biomaterials. The initiatives to reduce harmful emissions due to their impact on the environment have created the need for Bio-based goods from industries such as transportation, textile, and construction. The growing implications of carbon emissions during synthetic chemical production have popularized the concept of “Green Chemistry” thereby augmenting the demand. Governments are endorsing business sustainability and green chemistry programs such as ban on single-use plastic bags and disposable carry bags which will contribute to the market growth. Countries including Germany, the U.K., and France have framed policies and norms to take restrictive measures to sell plastic food containers, cotton buds, and straws.

RESTRAINING FACTORS

High Cost of Bio-based Chemicals to Hinder Growth of Market

The higher cost of bio-derived chemicals compared to that of synthetic chemicals will hamper the market's growth. The cost of raw materials required for producing renewable chemicals is low. However, the complex processing methods used in the production make these chemicals expensive than their conventional counterparts. Moreover, the research and development activities of the chemicals are costly, which adds to the final cost of the products. Furthermore, the hesitation of end-users to adopt these chemicals for industrial applications will limit product consumption. Products made from conventional chemicals exhibit superior durability, performance and have a higher working lifespan. Therefore, the above factors will impede the product demand.  

SEGMENTATION

By Product Category Analysis

Platform Chemicals to be Fastest-Growing Segment Owing to High Demand from Various Industries

Based on product category, the market is segmented into platform chemicals; polymers for plastics; paints, coatings, inks & dyes; surfactants; cosmetics & personal care; adhesives; man-made fibers; and others. Platform chemicals are calculated to be the fastest-growing segment in the market during the forecast period. The segment's growth is primarily associated with the rapid expansion of the concept of green chemistry worldwide. The high demand from manufacturers of fertilizers, biocides, and pesticides due to the biodegradability of the chemicals will fuel the segment growth.

Surfactants occupied the largest share in the market in 2020. The Bio-based surfactant is witnessing rising demand from applications including personal care, textile, home care, and industrial & institutional cleaning. The side-effects of synthetic surfactants on human skin are surging the demand for natural alternatives resulting in segment growth.

The propelling demand for eco-friendly plastics from the packaging industry will drive the growth of polymers for the plastics segment. The growing concern of plastic waste and landfills around the world will aid the demand for Bio-based Chemicals.

The rising demand for environmental-friendly and sustainable products from consumers is surging the demand for adhesives. Additionally, the biocompatible nature of the product is growing its adoption in medical applications.

The growth of the paints, coatings, dyes & inks segment is linked to surging demand from the building & construction, and automotive industries due to its sustainable nature. The synthetic dyes and chemicals used in the paints & coatings have a high content of volatile organic compounds; therefore, the preference towards eco-friendly substitutes is rising.

By Application Analysis

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Industrial Segment to Exhibit Significant CAGR during the Forecast Period

Based on application, the market is segmented into industrial, agricultural, pharmaceutical, and others. Industrial segment held the largest Bio-based Chemicals market share in 2020. This segment will likely dominate the market during the forecast period owing to the extensive demand from several end-uses such as additives, composites, and engineered plastics.

Agricultural segment is estimated to grow at the highest CAGR during the review period. The growth of this segment is primarily driven by the wide range of products application in bio-pesticide and bio-fertilizer. Furthermore, the high demand for biodegradable mulch films will support the segment growth.

The growth of pharmaceutical segment is associated with the rising use of Bio-based products in pharmaceutical formulations due to their compatibility. The adoption of chemicals as nutrient and food supplements, increasing demand for bio-ethanol and bio-adhesives, and rising consumption of bioplastics from the textile industry fuel the growth of others segment.

REGIONAL INSIGHTS

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The market size in Europe was valued at USD 35.59 billion in 2020. The region accounted for the largest share of this market in 2020 and is estimated to occupy a leading position throughout the forecast period. Rising investment by European Union countries drives the growth of market in Europe to promote green and circular economy. Besides, the countries in this region promote the use of Bio-based Chemicals that are anticipated to surge the demand. Furthermore, the region is experiencing a decline in conventional sources, and the steps taken to increase the dependency on biological sources will boost the market growth.

Asia Pacific is projected to be the fastest-growing region in the market. The market in the region is primarily driven by shifting preference of consumers towards Bio-based products and the changing policies regarding environment protection. In addition, rising incorporation of bio plastics by various end-use industries in China will augment the growth of Bio-based Chemicals.

North America is estimated to exhibit substantial growth during the forecast period. Factors such as shifting emphasis towards the use of sustainable products, the emergence of low-cost feedstock, and innovations in the Bio-based sector are surging the demand in the region.

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Market in the Rest of the World will grow at a moderate pace during the forecast period. The region heavily relies on petroleum-based and conventional sources for chemical production, therefore the transition to bio-derived chemicals will grow at a slower rate.

KEY INDUSTRY PLAYERS

Research and Development of New Products Will Provide Impetus to Key Players

The competitive landscape of the market is saturated in the western hemisphere. Key players are investing heavily in the development of new products which will comply with the strict regulations and norms implemented by the organizations and the governments. Key companies are forming partnerships with raw material suppliers to ensure continuous supply, streamline the supply chain, and avail cost advantage.

LIST OF KEY COMPANIES PROFILED:

• BASF SE (Germany)


• Vertec BioSolvents Inc. (U.S.)


• AGAE Technologies, LLC (U.S.)


• TOTAL (France)


• ADM (U.S.)


• DuPont (U.S.)


• Evonik Industries (Germany)


• Toray Industries, Inc. (Japan)


• Cargill, Incorporated (U.S.)


• GF Biochemicals Ltd. (Italy)


• Mitsubishi Chemical Corporation (Japan)


• DSM (Netherlands)  

KEY INDUSTRY DEVELOPMENTS:

• August 2021: BASF and Eni made an agreement to develop new technology and produce bio-propanol from glycerin, a byproduct from the production of industrial biodiesel or fatty acid methyl ester.


• September 2019: Archer Daniels Midland Company and LG Chem made a joint development agreement to produce Bio-based acrylic acid, a foundational element required to manufacture superabsorbent polymers (SAP) used in a range of hygiene products.

REPORT COVERAGE

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The global Bio-based Chemicals market research report provides a detailed industry analysis and focuses on key aspects, such as profiles of leading companies and leading applications of the product. Besides this, it offers insights into current market trends, dynamics, and highlights key industry developments. In addition to the aforementioned factors, the report encompasses several factors that have contributed to the growth of the advanced market over recent years.

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