While it may sound like we’re talking about some mysterious noxious substance straight out of a comic book, what ‘green chemicals’ actually refers to is renewable chemicals produced from bio-based feedstock.
It might not sound as exciting as glowing radioactive waste, but these chemicals are much less harmful to the environment than petroleum-based chemicals, since they can be created using raw materials such as vegetable oils, animal fats, sugar and starch, and bio-ethanol.
The Global Green Chemicals Market was valued at US$55.43 billion in 2013, and it is expected to witness steady growth during the forecast period, posting a CAGR of 8.16 percent from 2014-2018.
TechNavio analysts have highlighted the top six reasons green chemicals are gaining popularity.
Environmental Awareness
The volatility in petroleum-based raw materials and the growing demand for sustainable products have led the majority of chemical producers to move away from fossil-based raw materials in the production of chemicals.
Scarcity of Non-renewable Resources
Rising crude oil prices are forcing the hand of chemical manufacturers towards bio-based, renewable materials.
It’s estimated that by 2030, crude oil reserves—the basic raw material required in chemical production— will be severely depleted. Therefore, there has been increased demand for bio-based production, which uses renewable raw materials such as vegetable oils, animal fats, sugar and starch, and bio-ethanol.
Increasing Price of Crude Oil
On top of the fact that it’s not going to be available much longer, the high cost of crude oil is also becoming a major problem for chemical manufacturers. Raw materials like wheat, maize, and sugarcane are way cheaper, which makes producing bio-based chemicals a much more cost-effective option.
Government Support and Funding
Many countries are shifting to bio-based chemical production, thanks to increased government support. For instance, the Biorefinery Assistance Program (Section 9003) in the US states that the companies willing to produce high-performance renewable chemicals and bio-based products will be eligible for loan guarantees to build manufacturing plants. A mandatory budget has been set at US$100 million and US$50 million for FY2014 and FY2016, respectively.
Additionally, the EU and industry leaders have launched a new European Bio-based Industries Joint Undertaking, which will inject US$6 billion into the market in Europe for the production of bio-based products.
Reduced Carbon Footprint
Petroleum-based production of chemicals emits CO2, which is harmful for human health and the environment. The production of bio-based chemicals emits less CO2 because it involves raw materials such as wheat, maize, and sugarcane in the production process. Also, the increased awareness about growing green products will force vendors to shift to bio-based production of chemicals. This will pave the way for more opportunities in the Global Green Chemicals market during the forecast period.
Technological Advances
Recent advances in technology in the chemical industry have led to the production of feedstock that is inexpensive and delivers sustainable chemical products. The major vendors in the Global Green Chemicals market are introducing technologies to produce eco-friendly, cost-effective, bio-based chemicals.
