Renewable Chemicals Market Forecast: Analyzing Market Size, Share, and Growth

Renewable Chemicals Market Forecast: Analyzing Market Size, Share, and Growth

The Renewable Chemicals Market is estimated for 2023 for the forecast period 2023-2030, as highlighted in a new report published by Coherent Market Insights.

Market Overview:

Renewable chemicals are derived from biomass and are an important component in the production of various industrial and consumer products like polymers, fuels, solvents etc. They help reduce dependence on fossil fuels and lower carbon footprint.

Market Dynamics:

Renewable chemicals market are gaining traction due to the increasing awareness about environmental protection and sustainability. Many countries and regulatory bodies are promoting the use of renewable chemicals to lower greenhouse gas emissions.stricter environmental regulations mandating lower carbon footprint are expected to boost the demand for renewable chemicals.Additionally, reducing crude oil reserves and fluctuating oil prices are encouraging industry players to adopt renewable feedstock and chemicals, thereby propelling the market growth over the forecast period.

Growing Demand for Environment-Friendly Chemicals is Driving Growth in the Renewable Chemicals Market

The increasing awareness among consumers regarding the negative impact of petroleum-based chemicals on the environment has boosted the demand for eco-friendly and sustainable chemicals. Renewable chemicals are produced from biomass sources like agricultural waste, plant matter, and organic waste which significantly reduces greenhouse gas emissions as compared to petrochemicals. Many industries such as automotive, construction, textiles, and packaging are replacing petroleum-based raw materials with renewable alternatives to lower their carbon footprint. Various governments across the world are also promoting the use of bio-based products through favorable policies and subsidies. For example, the European Union has set a target of replacing 20% of petrochemicals consumption with renewable chemicals by 2020 to reduce dependence on fossil fuels.

Increasing Crude Oil Price Volatility is Pushing Companies Towards Renewable Chemical Alternatives

Crude oil prices have witnessed high volatility over the past few years mainly due to geopolitical tensions in major oil producing regions and fluctuating global demand and supply dynamics. This price uncertainty of petroleum feedstock increases production risks and costs for chemical companies that depend on oil derivatives. On the other hand, renewable chemicals are insulated from crude oil price swings as their raw material costs are determined by agricultural commodity prices which are relatively stable. Many large petrochemical companies are making significant R&D investments to develop bio-based production methods using sustainable biomass feedstock in order to hedge themselves against future crude oil supply disruptions and price shocks. This shift will help secure sustainable feedstock supply and stable revenue streams for chemical manufacturers.

High Production Costs Relative to Petrochemicals Limit Large-Scale Commercialization

While renewable chemicals offer clear environmental benefits, their production at commercial scale remains a challenge currently due to significantly higher manufacturing costs as compared to petroleum-based equivalents. Establishing biochemical/biological conversion processes for converting biomass into chemical intermediates and end products is more complex and costly than steam cracking of crude oil and natural gas. The costs of raw material supplies like sugars, oils, and starches from agricultural crops are also higher than crude oil. Further investments are needed in developing advanced fermentation and catalytic technologies to drive down these production costs to a level where renewable chemicals can compete on price with petrochemicals. High capital expenditure requirements for setting up commercial scale facilities also increases investment risks initially for companies setting up renewable chemical production capacities.

Growing Investments in Advanced Bio-refinery Technologies Presents Considerable Opportunities

In a bid to address the challenges of high production costs, companies and research institutes across the globe are investing heavily in next-generation bio-refining technologies. Advanced research and development activities are focused on developing economical and efficient conversion processes involving synthetic biology, metabolic engineering, and catalytic routes that can utilize a wide variety of low-cost, nonfood biomass like agricultural residues, forest waste, and algae as feedstocks. Several pilot plants are being set up to test and demonstrate these new technologies at semi-commercial scales. Successful commercialization of these advanced bio-refineries in the coming years could potentially lower manufacturing costs to competitive levels and drive large scale adoption of renewable chemicals production. This ongoing revolution in biotechnology represents multi-billion dollar opportunities for first-mover renewable chemical companies.

Rising Adoption of Circular Economy Principles will Favor Renewable Chemical Production & Use

Circular economy emphasizes the principles of designing waste and pollution out of the system and keeping products and materials in use for longer. It involves recovering and regenerating products and materials instead of regular disposal. Many countries see it as a pathway to deliver sustainable economic growth while reducing environmental impact. The renewable chemicals industry strongly supports circular economy models since bio-based materials can be effectively recycled as well as composted at end-of-life. As circular practices receive further policy and business support globally, demand will increase for chemical products manufactured from renewable, biodegradable feedstock. This would position the renewable chemicals industry for robust, long term growth driven by economic, environmental as well as societal sustainability gains of this overall circular approach.