Green Chemicals and Materials Market Size, Share & Trends Analysis Report By Material (Bio-Polymers, Bio-Organic Acids, Bio-Alcohols, Bio-Ketones), By Application (Construction, Food and Beverages, Personal Care, Packaging, Automotive, Agriculture, Textiles), By Type (Concrete admixtures, Adhesive and Sealants, Flame Retardants) and By Region(North America, Europe, APAC, Middle East and Africa, LATAM) Forecasts, 2022-2030

Market Overview

The global green chemicals and materials market size was valued at USD 101.2 billion in 2021 and is projected to reach USD 229.04 billion by 2030 at a CAGR of 9.5% from 2022 to 2030.

Green chemicals and materials are the eco-friendly alternatives that are used in place of conventional chemicals and materials. The world has witnessed considerable industrial growth since the industrial revolution, while also witnessing an exponential rise in pollution levels. For instance, air pollution has risen to such high levels that it is attributed to be one of the leading causes of deaths per year. Air pollution results in around 5 million deaths every year, which amounts to roughly 9% of deaths annually. The increasing global population has driven the demand for food and beverages, and the need to ramp up residential and commercial construction activities. This growth will lead to an increase in pollution levels leading to the rise in the need for green chemicals and materials.

The projected food and beverage demand, keeping in mind the growing population, is likely to lead to a 10–15% increase in nitrogen loads into the river. Over 80% of the sewage in developing economies is left untreated, which also pollutes lakes, coastal areas, and rivers. Growth in this market is projected to be slow, owing to the backing out of the U.S. from the Paris accord. In addition to this, the discovery of new shale oil deposits and the price reduction in oil and gas due to the sudden decrease in demand for conventional fuels and the fallout of OPEC and Russia is anticipated to restrict market growth.

Market Dynamics

Growing Awareness in Consumer for Sustainable Products to Drive the Demand for Green Chemicals and Materials

Consumers today have become increasingly conscious and are aware of sustainable products. Despite green packaging still being in the nascent stage, it is finding increasing acceptance, adoption, and innovation among the consumers. Growing environmental concern is responsible for changing the tides of the consumer towards eco-friendly alternatives. Paper packaging or other forms of plastics that are recyclable are in much demand and subjects of constant research and development initiatives.

These changes are rapidly modifying the technology and regulatory landscape, which has made it difficult for chemical and petrochemical manufacturers to continue with conventional products. These aspects are driving manufacturers to invest more in innovation and invent environment-friendly alternatives. For instance, Pilot Lite and Diageo, a venture management company, launched Pulpex Limited, a sustainable packaging technology company. It created a 100% plastic-free paper-based spirits bottle that is made entirely from sustainably sourced wood. The bottle is likely to make its debut in early 2021 with Johnnie Walker scotch whiskey.

Government Initiatives to act as Growth Catalysts for Green Chemicals and Materials Market

Increasing government investments and initiatives for infrastructure development while focussing on sustainable development drives the market growth during the forecast period. Volatility in oil prices and rising pollution levels have compelled many economies to adopt policies that can mitigate the effects caused due to the use of conventional chemicals. These government initiatives will go a long way in making the economy less dependent on conventional fuels and adopting eco-friendly alternatives.

Sudden population eruption in the emerging economies has led to mass migration, further leading to colossal strain on existing urban infrastructure. In order to deal with this, the national and regional governments have started providing and offering soft loans to spur investment and FDI in the construction and industrial sectors of the economy. The increasing government investments and rising demand for green building and construction are driving the green chemicals and materials market.

Modern consumers are willing to pay a premium price to reduce or stop the damage on the environment, owing to an increase in consumer spending capacity. This has given confidence to the manufacturers to use green chemicals and materials, which, despite being high in initial costs, will prove to be beneficial in the long term. The global construction industry is anticipated to reach USD 15 trillion by the end of 2030, led by the U.S., China, and India. Easy credit availability, loans, and housing schemes are among the primary reasons that have led to the rise of the construction sector. An increase in pollution levels due to construction activities has surged the demand for green chemicals and materials, such as fly ash bricks and concrete admixtures.

Regional Analysis

Europe to Lead the Green Chemicals and Materials Market during the Forecast Period

Europe leads the green chemicals and materials market during the forecast period. The region is among the leaders in adopting a greener economy for various applications, owing to it having made considerable investments in research and development. In addition to this, the support for these green initiatives from various organizations is further expected to make this region dominant in the market for the foreseeable future.

The automotive sector is likely to be among the leading application segments in this region, owing to its significance in the European economy. Cars account for around 12% of the total carbon dioxide emissions in Europe, which is likely to be among the main drivers for Europe to use green chemicals and materials in its bustling automobile industry. In addition to this, several original equipment manufacturers (OEMs) are adopting the use of eco-friendly materials to manufacture various automotive parts.

Segmental Analysis

Revolution in the Automotive Sector and Introduction of Eco-friendly Vehicles to Drive the Market

The automotive segment is anticipated to experience a significant growth rate during the forecast period in the green chemicals and materials market. The automotive sector is undergoing a revolution in a way in which cars and other vehicles derive their energy from electricity and hydrogen. In addition to this, some of the vehicles are also running on bio-alcohols, such as ethanol. One such example of a car on bio-alcohol is the Fiat 147. 

Figure 1: Number Of Electric Vehicle Models Available In Europe, 2010–2017

Leading automobile manufacturers have increased their investments in funding for manufacturing electric vehicles of various segments. However, the choice of EV models is still limited compared to conventional vehicles. As per the recent report published by the European Commission's Joint Research Centre (JRC), in the year 2017, there was around 28 battery electric vehicle (BEV) models and 33 plug-in hybrid electric vehicle (PHEV) models available in Europe. This is further expected to augment the demand for green chemicals.

Textile Industry: World's Most Ecologically Harmful Industry

The textile industry is considered as the most ecologically harmful industry in the world. The utilization of rayon for clothing affects the rapidly depleting forests. Petroleum-based synthetic fiber and the dyes are neither sustainable nor biodegradable. Cotton cultivation requires large quantities of synthetic fertilizers and pesticides/herbicides. Presently the conventional cotton crops occupy about 3% of the world cultivated areas. Nevertheless, it represents 25% of pesticides and 10% of insecticides bought in the world.

In recent times, sustainability is a leading characteristic of textile fashion products. Textile fashion companies are focusing more on sustainable products these days so that they can meet the environmental and social aspects. For getting a competitive advantage in the fashion business, the companies must take care of social, political, and economic issues, and they must be aware of current trends in the market. Several manufacturers are now striving to become greener and more sustainable in terms of producing environmentally friendly clothing and apparel.

Impact of covid-19

Since the outbreak of the Covid-19 pandemic, the logistics companies have been on the front line with fully-stocked warehouses and ongoing trade. However, the global supply chain disruption due to the lockdown imposed in the majority of the world further narrowed down the merchandise trade growth in the said logistics segment. But one thing which was notably remarkable in this Covid outbreak was the immense growth of the e-Commerce sector which introduced the consumers to digital business models and smart and safe logistics parameters. There has been a significant rise in the instant or same-day delivery patterns in online purchases with the increase in Covid-19 cases worldwide. Consumers feel safe ordering things online and getting them delivered to their doorstep without visiting a crowded place. In the meantime, follow the Covid guidelines given by the governing authorities.

Some reports say that the e-Commerce sales have grown by 30% in the first and second quadrant of 2020, during which the Covid outbreak was humongous. The said period saw a significant rise in daily parcels globally which reached 9 million parcels a day from 5.3 million parcels a day in the pre-pandemic times. The only positive thing the covid-19 pandemic did was to the e-Commerce industry. They generated a lot of revenue through the online selling portals and gained the consumers' trust by delivering their goods safely to their doorstep.

The global market of last mile delivery has seen a noteworthy increase in revenue with a sudden rise in delivery services during the pandemic. Many key players in the industry are planning to improvise and connect to more customers through safe and efficient delivery services. Even after the Covid-19 outbreak, the online sales and e-Commerce platforms are expected to keep their rising momentum in the global last mile delivery market growth with the increase in the online shopping trends and safe and sound fast delivery options.

Recent Developments