Ethylene Market Size, Share & Industry Analysis, By Feedstock (Ethane, Naptha, Propane, Butane, Others), By Application (Polyethylene (PE), Ethylene Oxide, Ethylene Dichloride, Ethylbenzene, Vinyl Acetate, Others), and Regional Forecast, 2025-2028

Ethylene Market Size

The global ethylene market size was valued at USD 203.74 billion in 2024 and is projected to grow to USD 259.60 billion by 2028, exhibiting a CAGR of 6.2% during the forecast period (2025-2028). 

Ethylene (C₂H₄), a flammable, colourless hydrocarbon gas with a faint sweet odour, is an important component of the global petrochemical industry. As the simplest alkene, it serves as a fundamental building block for producing a wide range of chemicals and materials, most notably polyethylene, ethylene oxide, ethylene dichloride, and ethylbenzene. These derivatives are essential in industries such as packaging, automotive, construction, agriculture, and consumer goods.

Concurrently, Asia Pacific holds largest market share globally, driven by robust demand from various industries and continuous investments in advancing ethylene applications The region’s dominance in ethylene applications stems from its robust manufacturing base, particularly in China and India, were ethylene derivatives fuel key industries. The packaging sector, spurred by e-commerce growth and consumer goods demand, remains a leading application, with India’s Ministry of Commerce noting a surge in plastic packaging exports.

Table 1: China’s Future PE New Projects, 2024-2028

U.S. has competitive advantage over other countries with its lower cost structure for ethylene and its derivatives due to its reliance on abundant domestically produced ethane as a feedstock. In addition, the subsidy benefits for plastic industry further drives the demand for ethylene in the country.

Table: Top 10 U.S. Plastics Manufacturing Plant Recipients of Subsidies

Ethylene Market Trends

Shift Toward Bio-Based Ethylene Production

The global market is witnessing a trend toward bio-based ethylene derived from renewable feedstocks like bioethanol. This shift is driven by consumer demand for sustainable products and corporate commitments to reduce carbon footprints. Government bodies are leveraging bioethanol-based technologies to produce green ethylene, aligning with circular economy goals. This trend reduces reliance on fossil fuels, mitigates environmental impact, and enhances brand reputation. However, scaling bio-based production faces challenges like high costs and limited feedstock availability, requiring innovation in supply chains and processing technologies to meet growing demand while maintaining economic viability.

The Indian Department of Chemicals and Petrochemicals noted in 2024 a growing focus on bio-based ethylene production, spurred by environmental policies under the National Green Hydrogen Mission, aiming to reduce reliance on fossil fuels. 

• For instance, an investment of USD 107.38 billion is estimated in the Indian chemicals and petrochemicals sector by 2025. This is complemented by ethylene’s dominant applications in construction, where ethylene derivatives like PVC are integral to pipes, fittings, and housing projects under the Pradhan Mantri Awas Yojana (PMAY), which targets millions of homes by 2025.

Technological Advancements in Production Efficiency

Innovations in ethylene production, such as advanced catalysts and naphtha cracker optimization, are improving yield and reducing emissions. However, Honeywell’s 2022 technologies enhanced cracker efficiency, lowering energy consumption. These advancements enable manufacturers to meet stringent environmental regulations while maintaining profitability. They also support higher output to meet rising demand from industries like packaging and automotive. However, adopting these technologies requires significant capital investment, and smaller producers may struggle to compete, potentially leading to market consolidation as larger players dominate with superior efficiency.

• For instance, in May 2024, Larsen & Toubro's Heavy Engineering division has shipped two Ethylene Oxide (EO) Reactors, each weighing 1,136 metric tons, to a BASF chemical plant project in China, marking a significant achievement in the global heavy engineering sector. The reactors play a crucial role in the production of ethylene oxide, a key component used in manufacturing a variety of chemicals.

Ethylene Market Growth Factors

Growing Demand for Polyethylene in Packaging

The packaging industry’s expansion, fueled by e-commerce and consumer goods, drives ethylene demand, particularly for polyethylene (HDPE and LDPE). With global retail and food sectors growing, polyethylene’s versatility in films, bottles, and containers is critical. For example, Asia-Pacific’s rapid urbanization boosts packaged goods consumption, increasing ethylene production needs. This demand supports market growth but strains supply chains, requiring producers to balance output with sustainability goals to avoid over-reliance on non-renewable feedstocks, which could exacerbate environmental concerns.

• For instance, around (60-65) % of ethylene is used in manufacturing of polyethylene including high-density polyethylene (HDPE), low-density polyethylene (LDPE), and linear low-density polyethylene (LLDPE). As per the data provided by Flexible Packaging Association, the production of polyethylene is expected to rise by 4% and exports by 12% in 2024-25., further driving the consumption of ethylene in U.S.

Rapid Urbanization and Infrastructure Development

Urbanization in emerging economies like China, India and Australia fuels ethylene demand for construction applications, such as pipes, insulation, and coatings. Infrastructure projects, including smart cities, rely on ethylene derivatives for durability and cost-effectiveness. This driver supports market expansion as governments invest heavily in urban development. However, fluctuating raw material costs and regulatory pressures for eco-friendly materials challenge producers to innovate, ensuring ethylene-based products meet performance and environmental standards while supporting global construction booms.

• For instance, ethylene is a key feedstock for PVC, widely used in construction for piping, fittings, and insulation. Major projects like the USD 16.5 billion Melbourne Metro Tunnel rely on durable PVC materials, driving ethylene demand. The government’s focus on urban development and housing, with 1.1 million new homes planned by 2029 (Australian Bureau of Statistics), further supports this trend, as PVC remains cost-effective and versatile.

Market Restraint

Stringent Environmental Regulations

Ethylene production, heavily reliant on fossil fuels like naphtha, faces strict regulations due to high carbon emissions. Governments worldwide impose limits on greenhouse gas outputs, forcing producers to invest in cleaner technologies or face penalties. These regulations increase operational costs and may reduce profitability, particularly for smaller firms unable to afford upgrades. Compliance also slows production timelines, creating supply bottlenecks, yet it pushes the industry toward sustainability, necessitating a balance between regulatory adherence and market competitiveness.

• For instance, Regulations like Queensland’s 2021 single-use plastic ban restrict PE and PS applications in packaging, limitSSing ethylene demand. The shift away from virgin plastics toward recycled materials, enforced by the Department of Climate Change, Energy, the Environment and Water (DCCEEW), pressures ethylene producers like Qenos to adapt, potentially reducing output for virgin PE and PET.

The EU stipulates that the frequency of testing for Ethylene oxide residues for instant noodle products from Vietnam is 20%. On December, 2021, the EU officially issued additional control regulations in "Commission Implementing Regulation (EU) 2019/1793 of 22 October 2019 on the temporary increase of official controls and emergency measures governing the entry into the Union of certain goods from certain third countries implementing Regulations (EU) 2017/625 and (EC) No 178/2002 of the European Parliament and of the Council and repealing Commission Regulations (EC) No 669/2009, (EU) No 884/2014, (EU) 2015/175, (EU) 2017/186 and (EU) 2018/1660."

Market Opportunity

Rising Investment in Emerging Economies

Increasing industrialization in Latin America and Africa presents opportunities for ethylene market growth. Joint ventures, like Braskem, the leading global biopolymer producer, and SCG Chemicals, a leading petrochemical company in Thailand and Southeast Asia, have signed a joint venture (JV) agreement to create Braskem Siam Company Limited. This joint venture aims to produce bio-ethylene from bio-ethanol dehydration and to commercialize I'm greenTM bio-based Polyethylene, using the EtE EverGreenTM technology. The technology results from the partnership agreement between Lummus Technology LLC and Braskem B.V. to develop and license this technology. I'm greenTM bio-based Polyethylene is a plastic made from a sustainably sourced renewable raw material (ethanol from sugar cane) instead of traditional fossil feedstock (e.g., naphtha from oil).

Regional Insights

The Asia Pacific ethylene market is a critical component of the region’s industrial landscape, driven by strong push toward sustainability, with governments like China’s National Development and Reform Commission (NDRC) promoting greener production methods, such as bio-based ethylene initiatives, to address environmental concerns. This shift is evident in policies encouraging renewable feedstocks, as seen in Japan’s Ministry of Economy, Trade and Industry (METI) support for circular economy projects. The region’s dominance in ethylene applications stems from its robust manufacturing base, particularly in China and India, were ethylene derivatives fuel key industries. The packaging sector, spurred by e-commerce growth and consumer goods demand, remains a leading application, with India’s Ministry of Commerce noting a surge in plastic packaging exports. Additionally, the Bureau of Indian Standards (BIS) and China’s Ministry of Industry and Information Technology (MIIT) have continually updated standards to promote quality in plastics and related derivatives, thus supporting widespread applications of ethylene derivatives.

Europe Market Trends

Europe is the Fastest growing region with the highest market CAGR of 5.8%. The ethylene market across Europe is shaped by the region’s strong regulatory framework, decarbonization agenda, and industrial restructuring. As ethylene is a foundational feedstock for a variety of sectors such as plastics, automotive, packaging, and construction, the demand remains steady. However, the push towards sustainability and circularity is directly influencing how ethylene is produced and consumed across the continent, especially under the European Union's climate neutrality targets.

According to the European Commission, the governing body of the European Union, there is a structured industrial strategy designed to steer the chemical sector toward net-zero emissions. Ethylene, being an energy-intensive and fossil-based product, is under scrutiny. The Commission emphasizes the shift to green hydrogen, electrified crackers, and the use of bio-based feedstocks as key to reducing the sector's dependency on conventional fossil fuels. This aligns with the broader targets outlined under the European Green Deal and the Chemicals Strategy for Sustainability.

• China - China is aggressively expanding its ethylene production capacity, with government-backed initiatives aiming for near-complete petrochemical self-sufficiency. As of early 2025, China's ethylene capacity is estimated at over 50 million tons per year (~50–60% increase and its plastics production could hit 120 million tons (~30–35% increase over the last 5 years), driven by new crackers like BASF-YPC’s 750,000 mt/year facility in Jiangsu, set for maintenance in April 2025. This aligns with national policies to reduce import reliance, with ICIS forecasting China could account for 63% of global ethylene vinyl acetate (EVA) capacity by 2027, impacting regional supply dynamics.
• India - As per the Indian Ministry of Petroleum and Natural Gas, the government’s USD 1.4 trillion infrastructure investment plan (announced 2023) has spurred ethylene demand for downstream products like polyethylene pipes. A specific instance includes the Textile Processing Project in Maharashtra (2021), costing USD 10.9 million, which indirectly boosts ethylene needs for polyester production.
• U.S. - Around (60-65) % of ethylene is used in the manufacturing of polyethylene including high-density polyethylene (HDPE), low-density polyethylene (LDPE), and linear low-density polyethylene (LLDPE). As per the data provided by Flexible Packaging Association, the production of polyethylene is expected to rise by 4% and exports by 12% in 2024-25, further driving the consumption of ethylene in U.S.
• Canada - Alberta’s four petrochemical plants have a total ethylene-producing capacity of 4.1 million tons per year. One of these plants is located in Fort Saskatchewan. The other three are in Joffre and combine to form the world’s second-largest ethylene complex. Together, these four Alberta plants account for almost 80% of Canada’s total installed ethylene-producing capacity, with the remaining 20% located near Sarnia, Ontario.
• Indonesia - Indonesia’s Ministry of Industry highlighted the LOTTE Chemical Indonesia New Ethylene (LINE) project in Merak, set for completion in 2025. This initiative, backed by government incentives, aims to produce 1 million tons of ethylene 520,000 tons of propylene (PL), 250,000 tons of polypropylene (Pp), and downstream products annually, and post sales of 2.06 billion USD (2.4 trillion KRW) every year, positioning Indonesia as a regional hub and reducing reliance on imported ethylene derivatives
• South Korea - South Korea’s Ministry of Trade, Industry and Energy reported that LG Chem and Hanwha Total invested in new ethylene-related manufacturing facilities in 2019, with upgrades completed by 2023. These facilities, aligned with stricter carbon emission regulations under the 2050 Carbon Neutrality Plan, integrate advanced steam-cracking technologies to optimize ethylene output while reducing environmental impact.

Feedstock Insights

Globally, naphtha remains the most widely used feedstock in the production of ethylene, particularly in regions such as Asia-Pacific, Europe, and parts of the Middle East. As a petroleum-derived product, naphtha is processed through steam cracking to produce ethylene, along with other co-products like propylene, butadiene, and aromatics. Its dominance as a feedstock is largely due to its versatility and the ability to yield a broad range of valuable by-products, which are integral to the downstream petrochemical and plastics industries. In Asia, especially China and Japan, naphtha-based crackers form the backbone of ethylene production infrastructure, driven by limited access to natural gas-based alternatives like ethane.

Application Insights

Polyethylene is commonly employed in packaging film manufacture, containers, construction materials, and household appliances manufacture. Some important applications include ethylene oxide employed in antifreeze and detergents manufacturing and ethylene dichloride, a precursor chemical to polyvinyl chloride (PVC), a very important material within the construction industry and infrastructure developments. The consumption patterns between these applications are influenced by world consumption patterns, polymer processing technological developments, and increasing efforts toward adopting circular economy practices. Bio-based alternatives and chemical recycling are increasingly being integrated into industries as part of the transition towards embracing environmental sustainability goals, further affirming the strategic relevance of ethylene in the world chemical value chain.

Company Market Share

In the global ethylene market, ExxonMobil Corporation leads the global ethylene market with an 8.1% share, driven by its integrated upstream and downstream operations, producing ethylene for polyethylene and other derivatives. Its major facilities in the U.S. (Baytown) and Asia (Singapore), bolstered by expansions like the Guangdong cracker completed in 2024, integrate ethylene into high-volume polyethylene, elastomers, and performance plastics. Dow Inc., with a 7.2% share, has key sites in the U.S. (Freeport) and Europe, and advancements in sustainable ethylene via partnerships like the 2024 New Energy Blue collaboration.

Ethylene industry remains highly competitive globally due to its low-cost feedstock advantage and proximity to large domestic markets. The global producers, such as SABIC, Chevron Phillips Chemical, LyondellBasell, TotalEnergies and INEOS Group maintain a strong edge over European and Asian players reliant on costlier naphtha. 

• For instance, in March 2025, LyondellBasell announced an investment to expand propylene production capacity at its Channelview Complex near Houston.  Groundbreaking and construction are expected to begin in the third quarter of 2025, with a projected startup in late 2028. The unit will have an annual propylene production capacity of approximately 400 thousand metric tons.
• In March 2024, SABIC Fujian Petrochemicals Co., Ltd. is a joint venture between SABIC Industrial Investment Company (wholly owned by SABIC) and Fujian Fuhua Gulei Petrochemical Co., Ltd. (held by Fujian Energy and Petrochemical Group). Formed in 2022, SABIC Fujian Petrochemicals Co., Ltd. is a 51:49 joint venture, with SABIC being the majority owner. On January 22, 2024, SABIC announced the final investment decision for the SABIC Fujian Petrochemical Complex (Sino-Saudi Gulei Ethylene Complex Project) and plans to begin construction this year and expects to complete construction in 2026.

Formosa Plastics Corporation: An emerging player in the Ethylene market

Formosa Plastics Corporation, U.S.A., a wholly owned subsidiary of Taiwan-based Formosa Plastics Group, is a key player in the North American chemical manufacturing sector. Established in 1978 and headquartered in Livingston, New Jersey, the company operates large-scale manufacturing facilities in Point Comfort, Texas, and Baton Rouge, Louisiana. It produces a wide range of plastic and chemical products, including polyvinyl chloride (PVC), polyethylene (PE), polypropylene (PP), caustic soda, and ethylene dichloride (EDC), which serve industries such as construction, automotive, healthcare, and packaging. The company is actively investing in new technologies and capacity expansions to address growing market demands and improve operational performance. With a strong emphasis on research and development, the company continues to enhance its product offerings and manufacturing capabilities.

Recent Developments

• February 2025: S-Oil's USD 7 billion Shaheen petrochemical project in Ulsan, South Korea, is progressing and is expected to be completed by the first half of 2026. The plant, which is currently 55% finished, is set to officially begin operations in the second half of 2025. This project represents the largest foreign investment in a single venture in Korea and is backed by Saudi Arabia's Aramco, which holds a 63.4% stake in S-Oil.
• January 2025: Howard Energy Partners (HEP) announced the acquisition of EPIC Midstream Holdings’ ethylene pipeline.

The 120-mile, 12-inch, bidirectional pipeline provides critical ethylene transportation, connecting Gulf Coast Growth Venture’s petrochemical complex in Corpus Christi to storage facilities in Markham, Texas. In addition to increasing HEP’s overall footprint in the Gulf Coast region, the newly acquired ethylene pipeline offers unique synergies with HEP’s existing Javelina Plant.

• December 2024: AGC Inc., a prominent manufacturer of glass, chemicals and other high-tech materials, has agreed to a joint research contract with Canada-based climate tech startup company, CERT Systems Inc., to conduct research on the production of ethylene using CO2 as a raw material through electrolysis technology.

In this joint research, the AGC Group will begin examining the introduction of CCU technology to replace ethylene, which is used as a raw material for products such as polyvinyl chloride and fluoropolymer resin, with ethylene derived from CO2.

• November 2024: Sinopec starts up 1.2-MMtpy ethylene complex in north China's Tianjin. The new project, built in the Nangang industrial zone of port city Tianjin, near Beijing, brings the total ethylene capacity at Sinopec Tianjin subsidiary to 2.5 million tpy. Additionally, the new ethylene complex, partly powered by solar and designed as an energy and water-efficient project, is integrated with Sinopec Tianjin's 320,000 barrels per day refinery.
• July 2024: UPM Biochemicals invested USD 1.31 billion in Saxony-Anhalt's Leuna Chemical Complex to manufacture bio-based ethylene glycol from wood at a kiloton scale. It is the first large-scale transition from fossil-based to bio-based ethylene glycol production in Germany. The project is also part of a larger modernization program at the complex, which has exceeded USD 2.18 billion USD in overall investment. The shift is likely to spur demand for substitute ethylene feedstocks and fuel the development of green ethylene technologies in the nation.
• March 2024: Technip Energies and LanzaTech Global, Inc. were selected by the U.S. Department of Energy (DOE) Office of Clean Energy Demonstrations to begin award negotiations for up to USD 200 million in Bipartisan Infrastructure Law and Inflation Reduction Act (IRA) funding as part of the Industrial Demonstrations Program (IDP).

The project “SECURE” (Sustainable Ethylene from CO2 Utilization with Renewable Energy) aims to develop a transformational technology to produce sustainable ethylene from captured carbon dioxide (CO2). Technip Energies and LanzaTech announced their Joint Collaboration Agreement to create this new pathway to sustainable ethylene at commercial scale in July 2023.

• February 2024: The German government approved the use of this product for controlled ripening operations, specifically on bananas. This advancement is expected to increase the usage of ethylene in ripening rooms and cold storage, pushing its application into non-traditional industrial and petrochemical markets. The inclusion of ethylene in post-harvest handling and food logistics may, therefore, provide new commercial opportunities for ethylene suppliers in Germany.

Analyst Opinion

The global ethylene market is experiencing notable shifts driven by evolving demand patterns and changing feedstock dynamics. Ethylene remains a foundational petrochemical, primarily utilized in the production of polyethylene, ethylene oxide, and ethylene dichloride. Demand growth in Asia, particularly China and India, continues to influence global trade flows and investment decisions. These countries are increasing domestic production capacity, which may gradually alter the region's reliance on imports.

On the supply side, the North American market benefits from cost-effective shale gas-based ethane, supporting its competitiveness in global exports. In contrast, naphtha-based producers in Europe and parts of Asia face pressure from margin volatility and environmental regulations, which are encouraging process optimization and strategic diversification.

Geopolitical uncertainties and energy transition policies are also shaping market expectations. Regulatory developments and sustainability goals are prompting investments in bio-based and circular ethylene alternatives, although commercial-scale adoption remains gradual. Additionally, ethylene prices are closely linked to upstream crude oil trends and downstream polymer market dynamics.