Green Solvents Market: Current Analysis and Forecast (2024-2032)

Greener solvents, eco solvents, or sustainable solvents are those solvents that cause less harm to the environment as compared to classic solvents which are mostly made from petroleum. These kinds of solvents seek to address the concerns that are raised about the use of solvents such as their toxicity, high emissions of volatile organic compounds (VOCs), and disposal of hazardous waste, without boring down on the performance in the various industrial and commercial applications.

The Green Solvents Market is forecasted to register a CAGR of 7.05%, during the forecast period owing to the high demand for eco-friendly substitutes in various application industries including paints and coatings, pharmaceuticals, personal care, and many others. Owing to the implementation of stringent VOC (Volatile Organic Compound) emission regulations by governing authorities globally, a transition to green solvents from renewable sources is taking place in various sectors to mitigate ecological concerns. The emphasis on green and biodegradable products has resulted in the increased demand for bio-based and water-based solvents, which aids corporations to fulfill their sustainability and consumer demands.

The market growth is also supported by technological advancements, companies operating in the market are continuously expanding their product lines to cater to the industry demand. For instance, in November 2024, BASF opened a new water-based dispersions production line at its site in Heerenveen, the Netherlands. This expansion increases production capacity while keeping CO2 emissions at the same level. It is powered by green electricity generated from the Hollandse Kust Zuid wind farm. The new line is in line with the evolution of packaging materials which will also address the need to make more products biobased for printing, packaging, and lining. It will manufacture environmentally friendly materials such as Joncryl(R) for food-safe inks and Acronal Pro(R) polymers for long-lasting paints. BASF has ambitious plans to go beyond climate neutrality and sustainability goals in Europe, despite all the flaming regulatory issues in this region.

Based on type, the market is segmented into bio-based, water-based, supercritical fluids, and deep eutectic. The bio-based segment dominated the market in 2023 and is expected to dominate in the forecast period, driven by its wide usage in various industries. Bio-based solvents, which are made with renewable raw materials such as corn, soy, and sugarcane, have toxicity and biodegradability levels that are more acceptable as alternatives to fossil fuel-based solvents. The use of bio-based solvents is further encouraged by regulatory agencies around the world due to restrictive VOC (volatile organic compound) emissions that are being imposed. For instance, countries in the European Union have already enacted tough standards under the aegis of the European Green Deal that encourage industries to minimize their carbon footprints and utilize green materials instead. This has led to increased consumption of bio-based solvents in other industries as well. Subsequently, excelling R&D efforts and innovation in bio-based solvent formulation have made them more effective and expanded their use. For instance, L'Oreal shared with great pride that "65% of our ingredients in formulas were from biobased sources, which are plentiful minerals or upcycled resources". Furthermore, in 2023, L'Oreal Groupe announced a groundbreaking, first-in-the-industry partnership with Cosmo International Fragrances to introduce an extraction using Green Sciences.

Based on the application, the market is segmented into paints & coatings, industrial & domestic cleaning, cosmetics, pharmaceuticals, agriculture, adhesive sealants, and others (Textile, Printing Inks). The paint & coatings segment generated the most significant revenue in 2023 and is expected to behave similarly in the forecast period. The expansion is bolstered by rising consumer trends advocating for green products. The green revolution that is taking shape among the users has led to a huge demand for low-VOC and environmentally friendly coatings and paints. For instance, in 2024, Circa Group successfully scaled up production of levoglucosenone, a solvent derived from waste biomass that is fully bio-based in nature. LGO is a sustainable biomolecule platform for the manufacture of many green biochemicals that can replace hazardous fossil-derived products used in various fields such as medicine, plant protection, food additives, cancer therapy, electrical applications, battery production, coatings, graphene, polymeric substances, and several others where there are plant-based substitutes of the existing industrial chemical that is more beneficial in terms of costs. Cyrene(TM), which is Circa's keystone product - bio-solver, is arousing a lot of interest in a market that exceeds one million tons for its ability to effectively substitute harmful oils that are composite materials for the synthesis or production of any other oils from petrochemical sources. Moreover, this trend is fueled by the growing concern for environmental sustainability among construction specialists who are championing green building certifications such as Leadership in Energy and Environmental Design (LEED). In 2024, they announced the changes in LEED guidelines to reward additional points for new projects with low GWP insulations and green paint materials in their finishes." This in turn gives rise to the growth of eco-friendly painting materials in the finished systems in construction.

For a better understanding of the market of green solvents, the market is analyzed based on its worldwide presence in countries such as North America (The US, Canada, and Rest of North America), Europe (Germany, The UK, France, Italy, Spain, Rest of Europe), Asia-Pacific (China, Japan, India, Rest of Asia-Pacific), Rest of World. The Asia Pacific green solvents market is expected to dominate in the forecast period due to several factors, such as the rapid industrialization, enforcement of environmental laws and growing needs for sustainable products in other industries such as paints, coatings and personal care. This region also boasts of its strong investment in green technologies owing to the presence of rigid environmental policies in some of the countries such as China, Japan and India. The most critical countries within the Asia-Pacific region such as China and Japan have implemented stringent environmental policies to mitigate the effects of pollution and encourage sustainable development. For example, the Ministry of Ecology and Environment has set strict guidelines on VOC emissions in China, forcing businesses to use less polluting green solvents. For example, China has implemented restrictions on VOC emissions aimed at the industrial or the manufacturing sector, which prompted the increase in use of green solvents within the region. The rapid expansion of the building and automotive sectors in the Asia Pacific region has subsequently increased the use of paints and coatings, which encourages the usage of green solvents within the environmental regulations. For instance, in January 2023, Asian Paints announced the approval of (~USD 242 million), a Rs. 2000 crore rupee capex plan for the construction of a new facility for manufacturing water-based paints. The plant will have an annual production capacity of 400,000 kiloliters and will incorporate advanced technology in the production of paint and its raw materials in a clean manner. Moreover, Asia Pacific is registering high growth in the application of eco-friendly solvents in personal care and pharmaceutical industries owing to the rising demand for green products amongst the consumers.

Some of the major players operating in the market include BASF, Dow, Stepan Company, LyondellBasell Industries Holdings B.V., Florachem Corporation, Huntsman International LLC, ADM, Corbion, Vertec BioSolvents Inc., and Clariant.