Analysis by Type (Ethanol, Ethyl Acetate, 2-Methyltetrahydrofuran, Bio-Methanol, Bio-Butanol, Levoglucosenone, Dimethyl isosorbide, and Others); by Raw Material (Cellulose, Starch, and Oil); and by Application (Paints & Coatings, Pharmaceuticals, Adhesives, Home & Personal Care, Industrial Cleaning, Plastics & Polymers, Agrochemicals, Food & Beverage, and Others) – Global Supply & Demand Analysis & Opportunity Outlook 2023-2035
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The global renewable solvent market is estimated to garner a revenue of ~USD 7 Billion by the end of 2035 by growing at a CAGR of ~5% over the forecast period, i.e., 2023 – 2035. Further, the market generated a revenue of ~USD 4 Billion in the year 2022. The benefits of renewable solvents over traditional solvents like less toxicity, biodegradable in nature, and lesser emission of Volatile Organic Compounds (VOC) are estimated to be the primary growth factor for the global renewable solvent market in the forecast period as these characteristics make the renewable solvents an ideal component in a wide range of industries. As per recent estimates, the United States emitted approximately 11,880 tons of VOC in 2021 – a considerable decrease from 2018 with 12,930 tons. Such a decrease in VOC emission is expected to prompt the market size of renewable solvents.
Renewable solvents are manufactured through the process of fermentation of renewable resources. In general, the raw materials used are cellulose, starch, or oil, making renewable solvents environmentally friendly and a perfect substitute for traditional solvents, which is expected to drive market growth during the forecast period. Additionally, traditional solvents are not considered to be an optimum option because of their highly flammable and toxic content. They highly impact the environment by creating air pollution and diseases such as lung infection, nausea, headache, and skin irritation. In 2019, as per World Health Organization, 99% of the world’s population was living in places where the WHO air quality guidelines levels were not met. The high level of air pollution is anticipated to foster the demand for renewable solvents thereby creating growth opportunities for the renewable solvent market. Also, renewable solvents are biodegradable in nature and release less amount of VOC which is projected to increase their usage for various applications in numerous industries including paints & coatings, pharmaceuticals, adhesives, home & personal care, industrial cleaning, plastics & polymers, agrochemicals, and food & beverage. Hence, the high utilization rate is anticipated to create a positive outlook for market growth in the forecast period.
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Base Year |
2022 |
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Forecast Year |
2023-2035 |
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CAGR |
~5% |
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Base Year Market Size (2022) |
~ USD 4 Billion |
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Forecast Year Market Size (2035) |
~ USD 7 Billion |
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Regional Scope |
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Growth Drivers
Rapid Urbanization and Industrialization – The rise in per capita fuels urbanization and propels the population in urban areas. As a result, demand for construction, food and beverages, automobiles, and other products gradually rises, creating a demand for renewable solvents for a variety of applications. Rapid industrialization and urbanization thus are expected to fuel the demand for renewable solvents for varied uses. United Nations Organization stated that, as of May 2018, about 55% of the global population lives in urban areas. This number is further anticipated to increase to 68% by 2050.
Growing Application of Renewable Solvents in the Automotive Industry – The constantly rising demand for vehicles backed up by the high usage of renewable solvents in automobiles owing to their biodegradable nature, eco-friendly properties, and emission of lesser VOC emissions is expected to drive market growth in the assessment period. As per the data from the International Organization of Motor Vehicle Manufacturers (OICA), the global sales of all vehicles rose from 78,774,320 units in 2020 to 82,684,788 units in 2021.
Expansion of The Paints and Adhesives Industry – Several rules are laid by regulatory commissions and the government to use eco-friendly paints and adhesives in industries of construction, electronics, automotive, and others are expected to increase the demand for renewable solvents. Thus, the high demand for paints and adhesives is anticipated to bring lucrative growth opportunities for the market in the forecast period. As per recent data, the global market volume of paint and coatings was calculated to be approximately 10 billion gallons in 2019.
Growing Demand for Consumer Goods – The increased demand for consumer goods is expected to surge the growth of the packaging industry where renewable solvents are used as adhesives and sealants for bonding and other purposes. This subsequently is forecasted to create favorable opportunities for market expansion. As per the India Brand Equity Foundation in 2022, the fast-moving consumer goods (FMCG) sector was calculated to be India’s fourth-largest sector with household and personal care accounting for 50% of FMCG sales in India.
Rise in Research and Development Expenditure – Major key players of the market and government is focusing on developing advanced renewable solvents to protect the environment and the earth. Thus, a high amount of investments is made to initiate the development of technology-developed renewable solvents for use in a wide spectrum of industries. According to the World Bank, global research and development expenditure accounted for 2.2% in 2018, which further rose to 2.63% in 2020.
Challenges
The global renewable solvent market is segmented and analyzed for demand and supply by application into paints & coatings, pharmaceuticals, adhesives, home & personal care, industrial cleaning, plastics & polymers, agrochemicals, food & beverage, and others. Out of these, the paints & coatings segment is anticipated to garner the highest revenue by 2035. The growth of the segment can be attributed to the growing demand for renewable solvent solutions for the construction and automotive industries. Furthermore, with increased housing construction and income levels in countries such as Brazil, China, India, and Mexico, demand for paints and coatings is expected to rise significantly. As per the World Bank, the population and GDP of China were 1.4 billion and USD 13.89 trillion respectively. This figure rose to a 1.41 billion population and USD 17.73 trillion GDP in 2021. Furthermore, the utilization rate of renewable solvents in industrial coatings for producing lightweight automobiles for reducing VOC emissions is also estimated to impetus revenue generation in the upcoming years.
The global renewable solvent market is also segmented and analyzed for demand and supply by raw material into cellulose, starch, and oil. Out of these three segments, the cellulose segment is estimated to garner the most significant share of the market during the assessment period. The major factor for segment growth is the easy availability along with the low cost of cellulose-based renewable solvents. Another factor for the higher adoption of cellulose is its advantages such as high tensile strength, a higher flexibility for adaptability, and robust properties that could be advantageous for varied processes in different industries. All these factors couple up to create favorable opportunities to impetus revenue generation of the segment.
Our in-depth analysis of the global renewable solvent market includes the following segments:
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By Type |
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By Raw Material |
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By Application |
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The Asia Pacific renewable solvent market, amongst the market in all the other regions, is projected to hold the largest market share by the end of 2035. This is attributed to an increase in the construction sector in this region owing to the advantages of renewable solvent. It is estimated that Asia-Pacific is projected to account for USD 7.4 trillion of global construction output by 2030. Furthermore, the rise in pharmaceutical spending in Asia-Pacific countries such as Japan and Korea is anticipated to drive the expansion of the renewable solvent market size. As per Organization for Economic Co-operation and Development, pharmaceutical spending in Japan held 2.27% of the GDP in 2019 whereas, in Korea, it was 1.63% of the GDP in 2021.
On the other hand, the North American renewable solvent market is also projected to garner a significant share with a steady CAGR value. The major factor that is attributed to the growing market in this region is the increasing use of renewable solvents in end-use industries including paints & coatings, cosmetics, pharmaceuticals, industrial, and others. In addition, the rising investments made in research and development activities to escalate the production rate of renewable solvents in the upcoming years. Furthermore, the presence of major key players and rapidly growing end-use industries is also anticipated to bring supportive options for market expansion.
In 2023, market players might incur losses due to huge gap in currency translation followed by contracting revenues, shrinking profit margins & cost pressure on logistics and supply chain.
Controlling Inflation has become the first priority for global economies from last quarter of 2022 and to be followed in 2023. With skewed economic situations, rise in interest rate by governments to control spending and inflation, spiked oil and gas prices, high inflation, geo-political issues including U.S. & China trade war, Russia-Ukraine conflict to intensify the global economic issues.
The interest rates in the U.S. may be less sensitive in 2023 as compared to 2022; sigh of relief for businesses. Positive business sentiments, healthy business balance sheets, growth in construction spending (private construction value in 2022 stood at $1,429.2 billion, 11.7 percent (±1.0 percent) above the $1,279.5 billion spent in 2021, Residential construction in 2022 was $899.1 billion, up by 13.3 percent (±2.1 percent) from $793.7 billion in 2021, non-residential construction touched $530.1 billion, 9.1 percent (±1.0 percent) above the $485.8 billion in 2021.) showcases minimal impact of recession in the country.
Similarly, spiked spending in the European and major Asia economics including, India, China & Japan to showcase less impact on the global demand.
Ans: The increased awareness about environmental hazards along with the expansion of the automotive industry and rapid industrialization and urbanization is expected for market growth.
Ans: The market is anticipated to attain a CAGR of ~5% over the forecast period, i.e., 2023 – 2035.
Ans: Fluctuation in raw material prices and complex production processes coupled with a high cost of production costs are estimated to be the growth hindering factors for the market expansion.
Ans: The market in the Asia Pacific region is projected to hold the largest market share by the end of 2035 and provide more business opportunities in the future.
Ans: The major players in the market are Neste, AstroBio, NexantECA, Godavari Biorifineries Limited, CREMER OLEO GmbH & Co. KG, Cargill company, Braskem S.A., Vertec BioSolvents Inc., Archer Daniels Midland Company, InKemia Green Chemicals, Inc., Merck Group, and other key players.
Ans: The company profiles are selected based on the revenues generated from the product segment, geographical presence of the company which determine the revenue generating capacity as well as the new products being launched into the market by the company.
Ans: The market is segmented by type, raw material, application, and by region.
Ans: The paint & coatings segment is anticipated to garner the largest market size by the end of 2035 and display significant growth opportunities.
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