The need to reduce fossil fuel dependence in the chemical industry has led to the emergence of bio-based alternative products. A new study by BTG and the JRC details the potential of bio-based chemicals in EU markets, and estimates their annual growth rate at about 3.6% per year from 2018 to 2025.
In this report, we describe 10 key bio-based chemical product categories, their market production and consumption levels for the EU, their level of maturity on the market and the main drivers of and constraints to their future production.
As bio-based chemicals have yet to be precisely defined, official European statistics provide limited insights on their environmental impacts and production trends.
"Having a comprehensive database with all this information at our disposal is a great opportunity for us" says Claudia Parisi, one of the JRC researchers involved in the report, "because now we are able to conduct a comprehensive analysis on these 10 product categories. This step is essential for the identification of market gaps and development opportunities".
Based on detailed methodology, market data and expert opinions, the authors estimate that overall EU bio-based production accounts for about 4.7 Mt of bio-based chemicals per year, equivalent to about 3% of the total market for the 10 key products. Their findings also show that each product category will evolve differently in terms of market maturity, market potential and the percentage of bio-based chemical involved.
For instance, bio-based polymers for plastic are already very popular, especially for the production of disposable items and packaging, but their production still involves few bio-based chemicals. Conversely, surfactants – commonly used in the personal care industry – contain a high percentage of bio-based chemicals, mainly vegetable oil, but their production is already mature so their market is not likely to evolve significantly in the future.
Policy interventions aimed at stimulating the bio-based markets could be oriented towards investment incentives (grants, loans, guarantees, etc.), or making the production of their fossil-fuel counterparts more expensive – e.g. through carbon taxes – or making the use of bio-based chemicals mandatory in some industries, thus boosting their demand.
This study provides initial evidence to inform policymakers about the untapped potential of the bio-based chemical market and offers fresh insights on major market drivers and constraints that can stimulate the interest of stakeholders and customers in bio-based chemical products.