Bio-based 1,4-Butanediol Market Size, Share & Trends Analysis Report By Applications (Tetrahydrofuran (THF), Polybutylene Terephthalate (PBT), Gamma-Butyrolactone (GBL), Polyurethane (PU), Other Applications), By End-User Industry (Automotive, Electrical and Electronics, Textile, Other End-user Industries) and By Region(North America, Europe, APAC, Middle East and Africa, LATAM) Forecasts, 2023-2031

Market Overview

The global bio-based 1,4-butanediol market was valued at USD 31.43 billion in 2023. It is expected to reach USD 246.06 billion in 2032, growing at a CAGR of 25.69% over the forecast period (2024-32). There is a growing global emphasis on sustainability and reducing carbon footprints. Bio-based 1,4-BDO, derived from renewable resources such as biomass or bio-based feedstocks, offers a more environmentally friendly alternative to traditional petroleum-based BDO. This factor is driving the adoption of bio-based BDO in various industries.

Bio-based 1,4-butanediol is a chemical intermediate derived from renewable sources such as sugar and cellulosic feedstock. Due to several advantages, including biodegradability, high durability, stability, high moisture resistance, and excellent insulating properties, bio-based 1,4-butanediol is becoming increasingly popular. These characteristics of bio-based 1,4-butanediol are driving its demand for use in a variety of end-user industries, such as automotive, textile, electronics, and more. This is, in turn, promoting the expansion of the 1,4-butanediol bio-based sector. Additionally, it is anticipated that the market will expand more quickly due to the rising demand for bio-based 1,4-butanediol for producing elastic fibers used in the textile industry, such as polybutylene terephthalate (PBT), polyurethanes, polyesters, tetrahydrofuran, and others.

Market Dynamics

Market drivers

Stringent government regulations

Due to various government regulations, bio-based 1,4-butanediol is preferred by different manufacturing and end-user firms, as they are under increasing pressure to demonstrate their environmental action improvements by reducing their carbon footprint and raising the sustainability of their operations. Compared to fossil-based BDO, Novamont claims that bio-based BDO has a life-cycle greenhouse gas emission reduction of 60%. Furthermore, compared to existing methods of manufacturing, QIRA, the next-generation BDO made from plant-based sugars, will lower greenhouse gas (GHG) emission levels by 93%, according to calculations from Qore (the Cargill and HELM JV). Countries worldwide have taken varying approaches to enact and declare policies to cut greenhouse gas emissions. These rules encourage using 1,4-butanediol derived from biomaterials, expanding the industry. 

The European Commission published several legislative recommendations, one of which calls for the European Union to become climate neutral by 2050, with the intermediate goal of at least a 55% net reduction in greenhouse gas emissions by 2030 from the level in 2019. The target has increased significantly from the initial target by at least 40%. The European Union has set a target of 55% by 2030; the new proposal backs the promise made in the European Green Deal to deliver a comprehensive plan by that date. Additionally, the idea is consistent with the Paris Agreement's goals to limit the increase in global temperature to 1.5°C and pursue measures to keep it below 2°C.

Market restraint

Huge competition from fossil fuel-based products

Numerous manufacturing facilities for bio-based 1,4-butanediol and associated initiatives were initially suggested or started. Still, there has yet to be much development or information made public about the production to date. Many automobile parts and components, such as steering wheels, front and rear end components, bumpers, connectors, and more, are made in the automotive sector using bio-based 1,4 butanediol derivatives, such as PBT. The pandemic has substantially influenced the automobile industry, lowering demand for various car parts and components made of bio-based BDO derivatives and hampering the market's expansion. In the electrical and electronics sector, bio-based 1,4-butanediol derivatives make lamp holders for home appliances, appliance housings, reset levers for circuit breakers, and other components. Sales of electrical and electronic products have decreased significantly during this epidemic, affecting the investments made in this industry. The stop in current industrial activity is also a result of the workforce scarcity at the manufacturing facilities brought on by social exclusion and quarantine.

Market opportunities

Increasing demand for polybutylene terephthalate (pbt)

To create polybutylene terephthalate, terephthalic acid is used to polymerize bio-based 1,4-butanediol, produced mainly by the fermentation of carbohydrates (PBT). PBT is a semi-crystalline, white, or off-white thermoplastic polyester with improved electrical resistance, superior chemical resistance, and more significant impact strength. The electrical, electronic, telecommunications and information technology (IT), and automotive industries can all benefit from PBT because of its unique properties. Before this, DSM investigated and compared 1,4-butanediol (BDO) derived from biomaterials produced using Genomatica's process technology to 1,4-butanediol (BDO) derived from petrochemicals for the synthesis of PBT. The corporation assessed the polymerization based on several variables, such as net polycondensation (PC) time and polycondensation (PC) time. 

The bio-based BDO and conventional BDO did not differ significantly in any of the polymerization parameters. PBT constructed with bio-based BDO, created utilizing the Genomatica technology, was ideally within the parameters set forth by the business. Furthermore, the variances in both petrochemical- and biobased BDO are within the range of typical measurement fluctuation. The experiment also showed a striking similarity between the melting enthalpy and heat of fusion of PBT derived from bio- and petrochemical sources.

Regional Analysis

The global bio-based 1,4-butanediol market is bifurcated into four regions: North America, Europe, Asia-Pacific, and LAMEA. 

Europe dominates the global market

Europe is the most significant revenue contributor and is expected to grow at a CAGR of 10.43% during the forecast period. Compared to the previous year, industrial output decreased by 8.5% due to the worldwide health crisis and its associated limitations. The German government implemented many containment measures in response to the epidemic, including shutting down non-essential enterprises to restrict the virus's spread throughout the nation. Europe's largest automotive and electronics industries are both located in Germany. In addition to 3% of the country's gross domestic product, electric industrial production accounts for 10% of all industrial output (GDP). Germany's second-largest consumer goods industry is the textile and apparel sector. With about 18,000 UK-based electronics companies, the United Kingdom is the largest European market for high-end consumer electronics products. The country's consumer electronics market has seen a notable increase in the demand for technologically advanced electronic products. It is anticipated that this rise in demand will propel the nation's electronics industry and enhance the market for bio-based 1,4-butanediol used in electronic applications.

Asia-Pacific is expected to grow at a CAGR of 15.95% during the forecast period. China's "Made in China 2025" plan, the first 10-year action plan for the manufacturing-based strategy, has been made public. The manufacturing sector is the backbone of the economy, the building block of the nation, the key to prosperity, and the engine of a powerful state. One of the biggest companies in the country making bio-based 1-4 BDO is Shandong LanDian Biological Technology. This Chinese startup uses microbial fermentation to produce succinic acid, purified, esterified, hydrogenated, and converted into BDO. However, given that the nation supports some of the largest enterprises producing BDO and its derivatives, there is a significant opportunity to establish a bio-based 1-4 BDO production base. Nearly half of the global consumption of BDO is accounted for by China, which will continue to dominate the market over the projection period. 

The butanediol sector in India is still in its infancy, and the demand for derivatives like THF (tetrahydrofuran), PTMEG (poly-tetramethyl-ether-glycol), and GBL (gamma-butyrolactone) from the chemical industry is expected to drive the market for BDO as a whole. A rise in APAC's bio-based BDO and derivatives capacity could spur the industry we're looking at and inspire more investment in the derivatives sector. India has a long history of producing polyester fiber and might become a significant producer of PBT and spandex. India's sporting goods are well-liked worldwide and have established themselves in the world market for sporting goods. As a result of the domestic sector exporting roughly 60% of its overall output, these products can be produced in an advantageous setting. The industry is expected to increase its demand for spandex, which is used in sportswear and exercise gear.

The United States is the second-largest automaker and the biggest electronics market in the world. After China and India, the US textile sector is ranked third globally. In the upcoming years, the United States has a significant potential for bio-based 1,4-butanediol. The bio-based BDO is currently sourced from European nations with production facilities in Germany and Italy. The market under study is predicted to be driven by the transition to bio-based substitutes and the establishment of new plants. When combined, the textile and apparel sectors employ some of the most people in Canada's manufacturing sector. One of the country's leading manufacturing sectors is the electronics sector. In this nation, 1,4-butanediol potential is very high. 

However, it is anticipated that the demand for bio-based BDO in Canada throughout the forecast period will continue to be impacted by the suspension of bio-based 1,4-butanediol plant construction. One of the biggest producers and exporters of flat-screen TVs worldwide is Mexico. It is also the eighth-largest producer of electronics in the world and one of the largest exporters of computers. The International Trade Administration (ITA) estimates that the textile sector contributes about 2.4% of the nation's GDP. There is no 1,4-butanediol production in the country at the moment. Additionally, virtually little bio-based BDO is consumed. However, it is anticipated that bio-based 1,4-butanediol will rise in the upcoming years due to the construction of new plants in the North American region.

Some of South America's most significant electronics manufacturing facilities are in Brazil. Numerous major electronics manufacturers, including Samsung, LG, Foxconn, Dell, Multilaser, Positivo, AOC, Lenovo, and the Leadership Group, have extensive production facilities in the nation. Despite difficult circumstances, Samsung and LG maintain their status as the top electronics manufacturers. Brazil's textile industry, which ranks fifth globally in manufacturing, is anticipated to proliferate due to technological advancements. The bio-based 1,4-butanediol market has great potential in South America. The market under study is predicted to be driven by the construction of a bio-based 1,4-butanediol plant in the United States, which is anticipated to be operational by 2024. Numerous South American nations have excellent import potential thanks to the plant availability in the surrounding area.

Segmental Analysis

The global bio-based 1,4-butanediol market is segmented by application and end-user industry.

Based on application, the global bio-based 1,4-butanediol market is bifurcated into tetrahydrofuran (THF), polybutylene terephthalate (PBT), gamma-butyrolactone (GBL), polyurethane (PU), other applications. 

The tetrahydrofuran (THF) segment is the highest contributor to the market and is estimated to grow at a CAGR of 30.39% during the forecast period. Chemical building blocks like BDO and THF are used to create a variety of substances for industrial, commercial, and consumer usage, such as engineering plastics, polyurethanes, biodegradable polyesters, spandex, and other specialty substances. Tetrahydrofuran is widely employed in many industries as an organic compound solvent and a raw ingredient for manufacturing polymers. The conversion of THF, which is utilized as a monomer to create polytetramethylene ether glycol, occurs with around 50% of the world's BDO. When compared to 1-4 BDO that is made traditionally, bio-based 1-4 BDO only makes up a small portion of the total. Several techniques have been used to create tetrahydrofuran. 

Tetrahydrofuran is typically produced by hydrogenating or dehydrating furan or 1,4-butanediol. With the development of bio-based 1,4-BDO manufacturing technology, THF may be made by the environmentally benign process of draining bio-based 1,4-BDO. But businesses like Shandong Landian Biological Technology make bio-based THF by chemically converting bio-based succinic acid (SA). Inorganic acid catalysts like sulfuric acid can be used to dehydrate 1,4-butanediol. However, there are problems with the method due to the dangerous nature of inorganic acid and the corrosive effects of the acid on the reactor. Tetrahydrofuran can be made from 1,4-butanediol using several different acid catalysts. For the dehydration processes of 1,4-butanediol, for example, alumina catalyst, silica-alumina catalyst, alumina-supported tungsten oxide catalyst, and heteropolyacid catalyst can all be utilized.

When making polyurethanes, 1,4 butanediol is frequently employed as chain extenders. A nice blend of hardness and low-temperature flexibility is offered by 1,4 butanediol. 1,4 Butanediol has superior reactivity, linearity, and overall system compatibility compared to other diols. Polyurethane-cast elastomers are produced in large quantities using 1,4 butanediol. Flexible and rigid foams, varnishes and coatings, adhesives, electrical potting compounds, and fibers like spandex and PUL are just a few of the many applications for polyurethanes' diverse physical qualities. It is the material of choice for a wide range of end-user applications, including freezers and refrigerators, insulation for buildings, furniture and mattress padding, automobile parts, coatings, adhesives, rollers, tires, composite wood panels, shoe soles, and athletic apparel. Due to its expanding use as an insulating agent, the PU foam segment is anticipated to expand significantly during the projection period.

Based on the end-user industry, the global bio-based 1,4-butanediol market is bifurcated into automotive, electrical and electronics, textile, and other end-user industries. 

The textile segment owns the highest market and is estimated to grow at a CAGR of 33.78% during the forecast period. Leather, plastics, polyester laminates, and polyurethane footwear use 1,4 BDO as an adhesive. An initial chemical used to manufacture thermoplastic polyurethane (TPU), which is then used to create synthetic leather sole material, is 1,4-butanediol. However, 1-4 BDO is used primarily to make THF, then spandex fiber, a material that has revolutionized the apparel business. Spandex is a synthetic material that is lightweight, silky, and has superior flexibility. Its elastic qualities are used to create stretchy garments. 80% polytetramethylene ether glycol (PTMEG or PolyTHF) makes up spandex fibers, which can be stretched up to 700% of their original length without losing their form over time. 

In addition, around 10% is the expected growth rate for spandex fiber, which is significantly greater than the growth rate for textiles. Demand in this area is driven by the trend toward comfortable apparel with excellent wearing comfort. Rapid urbanization, the expansion of emerging economies, and the creation of numerous channels vying for viewership are all contributing factors to this increase. Additionally, the sports industry is being driven by the increased online sports content viewing, the increasing prevalence of mobile, tablet, and other gadgets, and the advent of affordable internet in emerging nations. This accelerated the market under study's expansion.

The production of N-methyl-2-pyrrolidone (NMP), which is utilized in electronic applications, magnetic wire coatings, and engineering resins begins with using 1,4-butanediol as a raw material. It is because of its low freezing point, high boiling temperature, special solvent, electrical properties, and other attributes, GBL is used in the electrical and electronics industry. Photosensitive resins and specialized inks serve as a solvent. For dispersion and finishing agents, it is utilized. It serves as the electrolyte solvent for lithium batteries and capacitors. PBT from biomaterials exhibits similar physical characteristics to PBT made using conventional methods. PBT has wide applications in the electrical and appliance industries due to its high strength, excellent thermal stability, and exceptional durability. PBT can be combined with a variety of different thermoplastics, including polyesters. 

In homes, polybutylene terephthalate is used in showerheads, irons, plug connectors for electrical engineering housings, vehicle construction, and plug connectors. Thermoplastic urethane elastomers can also use bio-based 1,4-butanediol as a chain extender. Appliance electrical insulating casings are made of this polyurethane. In 2020, the electronics market expanded slowly across the board. The consumer electronics sector, which saw robust demand for cell phones, computer accessories, and home appliances, provided the market with significant support. The need for computers, laptops, and other peripherals increased due to remote working rules in critical geographic areas. In 2020, the demand for electronic components for medical devices, commercial and residential air purifiers, sanitization equipment, and other products suddenly increased.

Recent Developments

• May 2024 - A letter of intent was signed by The LYCRA Company, a leader in the world of creating creative, sustainable solutions for the personal care and apparel industries, and Dairen Chemical Corporation (DCC) to convert QIRA®, the next generation of 1,4-butanediol (BDO), into low-impact PTMEG, which is the primary component of the patented bio-derived LYCRA® fiber. The first company in the world to commercialize this low-impact bio-PTMEG in large quantities is Dairen.
• May 2024 - Primient Covation LLC, which operates its PDO business under the name CovationBio PDO (formerly DuPont Tate & Lyle Bio Products LLC), announced that 2024 will mark the twentieth anniversary of the first investment made to commercialize Zemea® and Susterra® propanediol. These high-performing, sustainably sourced biomaterials are assisting in reducing the world's reliance on petroleum-based materials in a range of consumer and industrial applications.