Bio-Based Polyurethane Market Size, Share & Trends Analysis Report By Product (Rigid Foam, Flexible Foam, Coatings, Adhesives, and Sealants, Others), By End-User (Automotive, Building and Construction, Consumer Goods, Electrical and Electronics, Packaging, Others) and By Region(North America, Europe, APAC, Middle East and Africa, LATAM) Forecasts, 2023-2031

Market Overview

The global bio-based polyurethane market size was valued at USD 38.80 million in 2022. It is estimated to reach USD 63.90 million by 2031, growing at a CAGR of 5.7% during the forecast period (2023–2031).

Highlights

• Flexible foam dominates the product segment
• Building and construction dominate the end-user segment
• Asia-Pacific is the highest shareholder in the global market

Bio-based polyurethane (PU) coatings have replaced petrochemical-based coatings due to their lower environmental impact, easy availability, low cost, and biodegradability during the past few decades. They are primarily produced by reacting natural oil polyols (NOP) with diisocyanates and can range from 10% to 100% bio-based. NOPs can reliably replace synthetic polyols in various urethane products, including foams, elastomers, coatings, sealants, and adhesives. In addition, bio-based polyurethane (PU) coatings are used in construction, wood, textile, and automotive applications to enhance the aesthetic and longevity of a product. Natural oils, including castor, soybean, and sunflower, along with diisocyanates, react to form bio-based polyurethane resins. These resins are used for various purposes in various end-user industries, including automotive, building and construction, electrical and electronics, packaging, and consumer goods.

Market Dynamics

Global Bio-Based Polyurethane Market Drivers

High Demand for Green Buildings

The global energy crisis has accelerated the development of green buildings and the implementation of several sustainable construction initiatives. The concept of sustainability in building developments is broad. It includes several practices that must be implemented during the first construction phases due to the potential severity of their environmental effects. As a result of rising investments in intelligent, energy-efficient business and residential structures, green buildings are increasingly making their way into the construction market. In addition to presenting lucrative prospects, these structures comply with federal and environmental requirements, offering a significant answer to rising consumer expectations for sustainability.

Bio-based polyurethane foam is widely used in spray form for sealing holes, cracks, joints, and bonding other building materials, ultimately reducing the conditioning or heating required inside the building. In addition, the construction industry uses bio-based polyurethane for structural elements, substrates, and other building components. The market is expected to grow significantly during the forecast period due to increasing government and federal legislation promoting good insulation practices and green buildings.

Increasing Demand from Automotive Industry

Bio-based polyurethane is widely used in automotive applications such as seat cushions, seat backs, armrests, and head restraints. Increasing environmental concerns and the inclination of consumers toward sustainable products are attracting automotive manufacturers toward adopting bio-based polyurethane in automotive applications. For instance, Ford Motor Company, one of the leading global automobile manufacturers, is using bio-based polyurethane in the automobile as mentioned above applications.

Bio-based polyurethane coatings also find application in the automotive industry. The automotive industry is seeing a rise in the need for bio-based polyurethane coatings due to qualities including scratch resistance, abrasion resistance, and durability. In addition, the increasing need to reduce dependency on foreign oil and rising concern over CO2 emissions propel the demand for bio-based polyurethane among automobile manufacturers. The automotive industry's growth due to increasing income levels and growing industrialization is also expected to impact the global market positively.

Global Bio-Based Polyurethane Market Restraint

Cost Competitiveness of Bio-Based Polyurethane Over Conventional Polyurethane

Even though bio-based polyurethane is gaining popularity worldwide, the road of biobased polyurethane is not free from hindrances. The primary restraint of the market is the high cost to the end user compared to conventional polyurethane. Low prices of traditional polyurethane keep bio-based polyurethane from achieving competitive pricing. In addition, apart from the cost, the requirement of complex technologies to produce bio-based polyurethane, as compared to other bioplastics, is expected to restrain its production. The average price of bio-based polyurethane ranges between USD 18.0 and USD 19.15 per kg, which is costlier than conventional polyurethane, restraining the market growth.

Global Bio-Based Polyurethane Market Opportunities

Increasing Adoption of Bio-Based Polyurethane due to Various Environmental Concerns 

Increasing concerns regarding toxic issues about petrochemicals, along with depleting crude oil reserves, have been driving the development of bio-based polymers like bio-based polyurethane. Regulations imposed by most governments restricting the consumption of petroleum-based plastics in specific applications like medical devices are expected to further incentivize the production of bio-based polyurethane during the forecast period.

In addition, increasing utilization of environment-friendly plastics in various industries such as automotive, building and construction, packaging, consumer goods, and medical is anticipated to boost the demand for bio-based polyurethane globally. Increasing concerns regarding using petroleum-based plastics have led to increased demand for alternatives to conventional plastics worldwide. With the advancing pace of innovation and new product development, manufacturers are shifting their focus toward bioplastics development. Therefore, the factors mentioned earlier are anticipated to create lucrative opportunities for the market players to grow.

Regional Analysis

Based on region, the global bio-based polyurethane market is bifurcated into North America, Europe, Asia-Pacific, Central and South America, and the Middle East and Africa.

Asia-Pacific Dominates the Global Market

Asia-Pacific is the most significant shareholder in the global bio-based polyurethane market and is anticipated to grow at a CAGR of 6.1% during the forecast period. Asia-Pacific dominated the market and is expected to maintain its dominance over the forecast period owing to rising demand from key industries such as automotive, consumer goods, electrical and electronics, packaging, and building and construction in emerging economies such as China and India. In addition, the Asia-Pacific region is distinguished by a vast pool of inexpensively skilled laborers and easy access to land. A shift in the manufacturing environment toward emerging economies, particularly China and India, is anticipated to impact market growth positively over the forecast period. Construction, automotive, electronics, consumer goods, and other quickly growing industries are present in the area and present a profitable potential for makers of bio-based polyurethane.

Furthermore, several consumer and business products employ flexible foam as padding, including furniture, mattresses, carpet cushions, textiles, and others. Foams and other bio-based polyurethane products are expected to gain significance in the region due to rising consumer awareness regarding environment-friendly products. Moreover, increasing construction spending owing to the growing need for sustainable infrastructure is expected to drive product demand in the region during the forecast period.

North America is estimated to grow at a CAGR of 5.8% over the forecast period. North America holds a significant share of the global bio-based polyurethane market and is expected to grow substantially over the forecast period. Due to its high sustainability and lightweight features, the growth of the main end-user sectors, including building and construction and automotive, is predicted to propel the market throughout the forecast period. The construction industry in North America is expected to witness significant growth over the coming years owing to the high demand for non-residential construction projects such as hospitals, commercial buildings, and colleges. Moreover, national policies promoting the housing sector's recovery are expected to impact future construction trends positively. In addition, reconstruction activities in the U.S. and infrastructure development in Canada and Mexico are expected to fuel the product demand in North America over the forecast period.

Europe is expected to grow significantly over the forecast period. The rising demand for lightweight materials in the automotive and building and construction industries primarily drives the European bio-based polyurethane market. The region's expanding construction industry is anticipated to accelerate due to advantageous policies like tax cuts, incentives, and subsidies implemented by various governments. In addition, increasing demand for green buildings owing to their excellent environmental advantages that can provide high indoor environmental quality, maximize energy efficiency, and enhance durability is anticipated to fuel the growth of building and construction, thereby creating demand for bio-based polyurethane in coming years.

Further, government support toward green building construction in various countries, including the UK, Germany, the Netherlands, Poland, Hungary, Sweden, and Ireland, is expected to propel product demand over the forecast period. Germany is one of the most prominent automotive markets in Europe. According to the International Organization of Motor Vehicle Manufacturers (IOCA), in 2020, the country produced over 3.5 million units of vehicles. Additionally, the country is a prominent producer of passenger cars among all European Union member states. These factors are expected to contribute to the growth of the bio-based polyurethane market over the forecast period.

Recovering the residential building and construction sector in Central and South America is expected to fuel the demand for bio-based polyurethane in various construction activities. Significant new investments in housing and public works by the government and green building construction initiatives are expected to boost infrastructural growth in the region, thereby propelling the demand for bio-based polyurethane over the forecast period. Moreover, increasing demand from various applications, such as electrical and electronics, consumer goods, packaging, and others, are also anticipated to drive the overall market growth in the country.

The Middle East and Africa market is anticipated to witness steady growth over the forecast period due to the increasing building and construction industry. The building and construction growth is mainly supplemented by economies in the Middle East, such as the U.A.E., Saudi Arabia, Egypt, Kuwait, and others. Rapid investment in non-oil-based sectors, such as improving manufacturing industry infrastructure in the region, is expected to fuel the growth of the construction industry, which, in turn, is estimated to fuel the bio-based Middle East and African market. Furthermore, bio-based polyurethane provides form-fitting cushioning that securely protects fragile items, especially during transit. Since the Middle East hosts one of the busiest airports, the Dubai International Airport, countless valuable and fragile products are imported and exported, which require protective packaging to reduce the risk of damage. This will likely create demand for bio-based polyurethane in the region.

Segmental Analysis

The global bio-based polyurethane market is segmented by product and end-user.

Based on product, the global bio-based polyurethane market is divided into rigid foam, flexible foam, coatings, adhesives, and sealants, and others. 

The flexible foam segment is responsible for the largest market share and is anticipated to grow at a CAGR of 5.4% over the forecast period. Bio-based flexible polyurethane foam is light, durable, supportive, and comfortable. It finds application in numerous industries such as automotive, furniture and mattress, footwear, textile, handbag and luggage, home appliances, and packaging. It is widely used as cushioning for various consumer and commercial products, including bedding, furniture, automotive interiors, carpet underlay, and packaging.

Bio-based polyurethane coatings provide a smooth, durable finish with high UV and chemical exposure resistance. Bio-based polyurethane coatings are utilized in construction, wood, textile, automotive, and other applications to improve the appearance and durability of a product. As mentioned above, increasing demand from the end-user industries in China, India, Brazil, and Japan is expected to drive the demand for PU coatings over the forecast period. Bio-based polyurethane adhesives and sealants are primarily used to improve the flexibility and binding of products across various applications such as construction, footwear, windshield bonding, automotive interiors, and others. Growing demand for bio-based adhesives and coatings in the construction, automotive, and footwear industries is expected to fuel their growth over the forecast period.

Based on end-user, the global bio-based polyurethane market is segmented into automotive, building and construction, consumer goods, electrical and electronics, packaging, and others. 

The building and construction segment owns the highest market share and is estimated to grow at a CAGR of 5.1% during the forecast period. The demand for bio-based polyurethane in the building and construction end-user industry is expected to witness significant growth over the forecast period owing to various beneficial characteristics of biobased polyurethane, including excellent insulation, lightweight, long life span, and corrosion resistance, among others. It is anticipated that increased infrastructure-building activities in the Middle East, along with growing urbanization and industrialization, will drive demand for bio-based polyurethane, specifically in emerging nations like China and India. In addition, increasing infrastructure spending and a rising number of government initiatives, such as smart cities and FDI in the construction development sector, are propelling the growth of the construction industry. Furthermore, it is projected that the growing acceptance of green construction practices worldwide would fuel the expansion of the construction sector and increase demand for polyurethane.

Bio-based polyurethane is widely utilized in packaging applications. Shock-absorbing properties of biobased polyurethane make it ideal for storing and transporting products such as electronics equipment, consumer goods, wines, and medical and healthcare products. Properties such as moisture resistance and thermal insulation offered by polyurethane also help retain the freshness of perishable products such as seafood and fruits and vegetables. Therefore, the properties mentioned above provided by biobased polyurethane are boosting its demand in packaging applications. The COVID-19 pandemic's effects on the packaging industry are anticipated to remain moderate over the forecast period. The need for packaging healthcare products has increased sharply while the demand for luxury, industrial, and some B2B-transport packaging has declined due to the slowdown and halt in industrial operations.

Recent Developments

• October 2022- The American Chemical Council's Center for the Polyurethanes Industry (CPI) announced that Carbon's EPU 44 is the recipient of the 2022 Polyurethane Innovation Award. The Innovation Prize is famous throughout the polyurethane industry and celebrates firms and individuals whose foresight and perseverance bring life-improving products, technologies, and initiatives to market.

• November 2022- Covestro, a materials supplier, and Coleitec, a Chinese high-tech company, inked a strategic partnership agreement to expedite the application development of polyurethane (PU) composite materials and further expand their market-oriented cooperation.