Global Green Chemicals Market - 2024-2031

Overview

Global Green Chemicals Market reached US$ 105.5 billion in 2023 and is expected to reach US$ 188.2 million by 2031, growing with a CAGR of 7.5% during the forecast period 2024-2031.

With governments focused on decarbonization as a broader strategy of shifting away from a predominantly fossil fuel-based economic growth model, the global green chemicals market is set for new growth opportunities. Buoyed by lucrative government incentives as well as rising private sector capital investment, the market is set for high growth over the medium and the long term.

Limited production capacity remains a key bottleneck for the future growth of the global green chemicals market. Without production capacity augmentation, green chemical prices are unlikely to fall, rendering it uncompetitive against conventional chemicals. It will hobble further market growth as most end-users will migrate to other alternatives.

Dynamics

Growing Usage of Alternative Fuels

Countries globally face an energy crisis due to volatile prices of major energy sources such as petroleum and natural gas. Gasoline and diesel remain the primary fuels for the transportation sector. Countries with high fuel imports are promoting alternative fuels to ensure fiscal stability. The usage of electric vehicles, which has increased tremendously over the past decade, is not yet an ideal substitute for fossil fuel-based transportation solutions.

The promotion of bioethanol in the energy mix is being achieved through blending of petrol and ethanol. For instance, in October 2022, India's petroleum ministry announced the roll out of 20% ethanol-blended fuel for consumers. The European Union (EU) has made it mandatory to have a blending of 5% ethanol in gasoline in compliance with the recently adopted EN 15376 standards. Furthermore, pilot programs are underway in several European countries to adopt 10% ethanol blended gasoline for commercial usage The growing usage of alternative fuels is a key driver for the growth of the global green chemicals market.

Supportive Government Policies

Due to volatility in feedstock availability and limited manufacturing capacity, green chemicals have had difficulty in competing against conventional alternatives. Therefore, many national governments are rolling out incentives to increase the adoption of green chemicals including tax credits, subsidies and minimum price support.

Developing countries are at the forefront of rolling out support for green chemical industries since it helps the twin objectives of decarbonization as well as revitalization of the local agricultural industry. For instance, India has rolled out support incentives ranging from INR 30 (US$ 0.36) to INR 35 (US$ 0.42) per kg for the production of green hydrogen. Twelve companies have been selected to set up 410,000 Tons of green hydrogen production capacity. Supportive government policies help green chemicals to compete evenly with conventional alternatives and go a long way in ensuring future market growth.

Volatility in Feedstock Availability

The production of most green chemical is contingent upon the ready availability of bio-based feedstock materials such as corn, rye, wheat, beetroot and sugarcane. The cultivation and harvest of these crops can fluctuate from year to year, depending on multitude factors such as weather conditions and agricultural support policies.

Volatility in feedstock availability leads to a cyclical fluctuation in price of green chemicals. Such kind of boom-bust cycles make it harder for end-users to undertake long term planning. The increased price volatility also forces some end-users to migrate to conventional alternatives, thus reducing the growth potential of the global market.

Segment Analysis

The global green chemicals market is segmented based on product, application and region.

Increasing Usage of Bioethanol to Give Bio-Alcohols a Major Market Share

Bio-Alcohols are likely to have the highest market share during the forecast period, mainly due to the growing adoption of bioethanol. For instance, bioethanol is being adopted in place of conventionally produced ethanol as industrial solvents. Ethanol used in alcoholic beverages is produced using the fermentation of sugars in various feedstock materials such as corn and sugarcane through yeast. Ethanol used as biofuel also follows a similar production method. New emerging biofuels utilize wood, grass and cellulose for ethanol production.

The major modern application for bioethanol is as a biofuel additive in gasoline. Various countries have stepped up the usage of biofuels to curb emissions and reduce petroleum imports. Brazil and U.S. are leading users of ethanol-blended gasoline products due to major production of feedstock crops such as corn and sugarcane. India is another major country that has implemented new policies to promote the usage of biofuels.

Geographical Penetration

Government Incentives and Matured Production System Makes Asia-Pacific the Leading Region for the Market

Asia-Pacific is expected to have the highest share within the global green chemicals market as a combination of various favorable factors allows it to cement its leading position. The region already has a matured chemical industry, with high production capacities and competitive costs. The chemical sector in Asia-Pacific has been one of the leading receivers of foreign direct investment (FDI). China and India are among the leading chemical producers in the region, having exports of US$ 300 billion and US$ 65 billion respectively in 2022.

Another favorable factor for the market is highly supportive government policies. In September 2022, the Indian government launched a roadmap for the mass adoption of second generation (2G) bioethanol. In the same year, the Numaligarh Refinery Ltd, in the state of Assam, initiated an INR 17.5 billion (US$ 211 million) project to produce bioethanol from bamboo. Furthermore, in July 2023, the Indian government announced various production linked incentives (PLIs) for green and petrochemical production.

The upcoming years might prove to be highly conducive for the growth of the Asia-Pacific green chemicals market. As European chemical manufacturers increasingly scour new destinations to offset increased production costs at home, Asia-Pacific is well placed to attract these companies.

COVID-19 Impact Analysis

The COVID-19 pandemic created many challenges for the global green chemicals market. Firstly, the initial pandemic lockdowns created labor shortages and disrupted crop harvest, thus reducing feedstock availability for green chemical production. Furthermore, uncertainty in global markets due to supply chain disruptions prompted many companies to abandon production expansion of green chemicals.

The difficult market conditions hampered the supply and applications of green chemicals. Due to its relatively niche nature, prices were driven to new highs, which led end-users to look for more economical conventional alternatives. However, the market situation has improved remarkably in the post-pandemic period, mainly due to the institution of various government incentives for green chemical production.

Russia-Ukraine War Impact Analysis

The Russia-Ukraine will likely be a major catalyst in realigning the global green chemicals market. The economic sanctions on Russia have led to disruption in energy supplies and have steeply increased energy costs for European industries. Many European and multinational chemical manufacturers are actively looking to offshore green chemical production to Asia-Pacific or North America.

On its current trajectory, the global market for green chemicals will be likely be concentrated in North America and Asia-Pacific. Although Europe will account for a significant share of R&D in the development of new green chemicals, mass production is likely to be solely concentrated in Asia-Pacific due to its competitive domestic chemical industry.

The Russian market for green chemicals has witnessed major disruptions due to the economic sanctions. Many greenfield projects in the sector were delayed for cancelled due to difficulty in sourcing western-made production equipment and components. Russian chemical manufacturers are having to rely upon Chinese technology to continue the production of green chemicals.

By Product

• Bio-Alcohols
  • Bio-Ethanol
  • Bio-Methanol
  • Bio-Butanol
  • Others
• Bio-organic Acids
  • Bio-Lactic Acid
  • Bio-Acetic Acid
  • Bio-Citric Acid
  • Bio-Adipic Acid
  • Bio-Succinic Acid
  • Others
• Bio-Ketones
• Bio-Polymers
  • Polylactic Acid
  • Bio-Polyethylene
  • Other
• Others

By Application

• Pharmaceuticals
• Packaging
• Food & Beverage
• Construction
• Automotive
• Industrial & Chemical
• Others

By Region

• North America
  • U.S.
  • Canada
  • Mexico
• Europe
  • Germany
  • UK
  • France
  • Italy
  • Spain
  • Rest of Europe
• South America
  • Brazil
  • Argentina
  • Rest of South America
• Asia-Pacific
  • China
  • India
  • Japan
  • Australia
  • Rest of Asia-Pacific
• Middle East and Africa

Key Developments

• In January 2024, national thermal power corporation (NTPC), an Indian state-owned power company, signed an MoU with Numaligarh Refinery Limited (NRL) to develop a new bio-based refinery to manufacture bioethanol from bamboo feedstock.
• In October 2023, Solugen, a U.S.-based chemical manufacturer announced that it had received regulatory clearances for the construction of Bioforge, the company's production plant for green chemicals.
• In November 2023, Tuticorin Alkali Chemicals, an Indian chemical manufacturer, set a new unit for the production of green soda ash.

Competitive Landscape

The major global players in the market include BASF SE, DSM NV, DuPont, Evonik Industries AG, Mitsubishi Chemical Holdings Corporation, Braskem SA, Albemarle Corporation, Aemetis, Inc., Cargill Incorporated and SECOS Group Ltd.

Why Purchase the Report?

• To visualize the global green chemicals market segmentation based on product, application, end-user and region, as well as understand key commercial assets and players.
• Identify commercial opportunities by analyzing trends and co-development.
• Excel data sheet with numerous data points of pouch tapes market-level with all segments.
• PDF report consists of a comprehensive analysis after exhaustive qualitative interviews and an in-depth study.
• Product mapping available as excel consisting of key products of all the major players.

The global green chemicals market report would provide approximately 51 tables, 47 figures and 185 Pages.

Target Audience 2024

• Chemical Manufacturers
• Industry Investors/Investment Bankers
• Research Professionals