The global renewable chemicals market is set to experience significant growth, increasing from $300.9 billion in 2023 to an estimated $501.3 billion by 2028, according to a recent report by GlobalData.

Chemicals which are produced from renewable sources such as agricultural feedstock, agricultural and organic wastes, and biomass are termed renewable chemicals. Renewable chemicals are widely used as direct substitutes for petro-based chemicals due to their lower carbon footprint.

The growth is expected to be driven by increasing environmental concerns and a shift towards sustainable alternatives to petro-based chemicals. The report highlights that the fine chemicals segment, which includes pharmaceuticals, agrochemicals, and cosmetics, accounted for over 34 per cent of the market in 2023. This dominance is attributed to the growing demand from these end-use industries.

The renewable chemicals market is projected to grow at a compound annual growth rate (CAGR) of 10.8 per cent between 2024 and 2028.

Geographically, the Asia Pacific region held the largest market share of over 34 per cent as of 2023. This is largely due to government initiatives promoting the development of bio-based industries, including renewable chemicals. However, other regions are also expected to see growth.

The Middle East and Africa accounted for 0.8 per cent of the market share in 2023. Renewable chemicals, produced from sources such as agricultural feedstock, organic wastes, and biomass, are gaining popularity as direct substitutes for petro-based chemicals due to their lower carbon footprint. The market's expansion indicates a positive trend towards sustainability and a reduced reliance on fossil fuels in the chemical industry.