Bio-based Aromatics Market: Global Outlook & Market Dynamics

Bio-based Aromatics Market Synopsis

Bio-based Aromatics Market Size Was Valued at USD 2.63 Billion in 2023 and is Projected to Reach USD 4.26 Billion by 2032, Growing at a CAGR of 5.50% From 2024-2032.

Bio-based aromatics are chemicals that are synthesised from biomass constituents, as opposed to hydrocarbons which are formed from petroleum. They are utilized in production of a number of products including plastics, resins and various fragrances. These compounds can also be employed as green chemistry solution to provide a shift from conventional petrochemical aromatics to raw materials that decrease the utilization of fossil fuels and the resultant carbon footprint that accompanies their use. Some of uses include production of sustainable packaging materials, creating biodegradable plastics, production of natural flavors and fragrances. Bio-based aromatics offer an opportunity for industries to increase sustainability and address consumer’s expectations for more environmentally friendly products.        

Bio based aromatics are a rapidly growing market due to the shift towards renewable and environment friendly chemicals over petrochemicals. Aromatics, which are necessary for many industries with applications in producing plastics, pharmaceuticals, and adhesives are derived from fossils. However, due to increasing concern regarding environmental factors and the switch towards utilizing environmentally friendly products, bio-based aromatics are appearing on the horizon. These chemicals are produced from renewables including biomass, lignin and other organic carbon sources, making them environmentally friendly, and responsive to global concerns on carbon footprints. The market is further driven by increasing awareness of greenhouse gas emission standards set by the government to boost the bio-based economy. Therefore, by embraced sustainability strategies, bio based aromatics market is likely to receive escalation of advancement and investments in the next coming years.

Among regions, Europe and North America are leading in the adoption of bio based aromatics due to enhanced regulations in the promotion of renewable chemical. Also protracted, the level of sophistication during biotechnological processes is getting cheaper and thus making bio based substitute more cost effective. Other regions, such as Asia-Pacific especially, with a growing chemical and pharmaceutical industries, is also expected to experience tremendous growth in the bio-based aromatics market. The growth of the market is also driven by partnerships between biotechnology companies and big chemical players looking at means to ramp up capacities. However, the following challenges still persist; high production cost, scarcity of raw materials and competitiveness of the petrochemical products. Nonetheless, the report argues that the bio-based aromatics market shows great potential in the next ten years because of the continued efforts being made in the research area geared towards enhancing the manufacturing process and exploiting new uses of bio-based aromatics.

Bio-based Aromatics Market Trend Analysis

Key Trends Shaping the Bio-based Aromatics Market

• The change in chemical feedstock from petrochemical to bio sources is mostly driven by the increasing concern due to the effects of petrochemicals on the environment and Climate change. Many industries are now also on the lookout for microreplacements that can help them offset their carbon emissions while retaining the properties of regular chemicals. This shift is being induced by the government regulations as well as the customer awareness on more environmentally friendly products. The governments around the world are coming up with policies and regulation that check their carbon footprint; things like carbon taxes, emission capping and outlawing other hazardous chemicals are forcing companies to embrace sustainable production. Also, numerous promotion schemes such as incentives for green technologies, financial supports, grants, and subsidies help businesses to step up investments in the developing and enhancing of bio-based materials. They are a favourable policy environment enabling the bio based aromatics to be embraced in industries where the effects are keenly monitored such as cosmetics and packaging.
• Lignin, cellulose and other biomass derived bio-aromatics are gradually finding a place in many applications because they are biodegradable and non toxic. In the context of cosmetics business where the usage of natural and organic products is on the rise, bio-based aromatics are more favorable than SYNTHETIC chemicals, in consonance with the buying trends of consumers who are increasingly willing to pay for ‘green’ products. Likewise in food and beverages the bio-based flavoring and preservation agents are increasing use due to the clean label and renewable resources trends. Another area more and more affected is packaging where bio-based materials, which allow a lower environmental impact with respect to conventional plastics, are emerging. Market players are, therefore, focusing their research and development on making bio-based aromatic production as efficient and scalable as possible, by deploying more efficient biotechnologies. The acquisition provides a clear benefit to both participants and the global move towards a circular, bio-based economy.

Advancements in R&D and Industry Collaborations Fueling Bio-based Aromatics Market Growth

• Bio based aromatics market is known to be influenced to a greater extent by research and development with emphases on production efficiency and costs. Leading this progress is one among the most significant technological revolutions such as the fermentation and the catalytic conversion through biotechnological practices . These processes allow producing high purity bio-aromatics from renewable biomass feedstocks that compete or overcompete with the petrochemical products on the quality-performance scale. These fermentation techniques also make it possible to generate selective aromatic compounds important in processes such as cosmetics, packaging and food supplements. At the same time, catalytic conversion technologies are also being fine-tuned to make more quantities of bio-based aromatics more affordable for use in other industrial processes by shrinking their production costs into more manageable ranges. Therefore, the scale up of these technologies is leading more companies to invest in industrial biorefineries and pilot plants, thus propelling the market forward.
• Furthermore, the partnership between bio-based chemical manufacturers and large downstream industries is increasingly emerging as a market development imperative. These are promoting product innovation and market application which enable chemical manufacturers to introduce bio-aromatic products that match the requirements of automotive, textile and personal care industries. Such collaborations are important, as they not only allow clients to adapt solutions based on bio aromatics but also help to introduce them into various segments more broadly. Especially in places like Europe and North America where they are bringing out strict policies on green chemistry and sustainability, there has been a call for bio-based raw material. Growing environmental standards as well as corporate responsibility initiatives are demanding industries to turn to bio-based options, which is blessing with state funding and financial grants to develop environmentally-friendly materials. These collaborations are only expected to strengthen further in the coming years and as R & D introduces more cost effective methods of producing bio-based aromatics, the market is expected to grow in the next years.

Bio-based Aromatics Market Segment Analysis:

Bio-based Aromatics Market Segmented based on By Type, By End-Use and By Application.

By Type, Benzene segment is expected to dominate the market during the forecast period

• Aromatics Market, benzene being the most important product among aromatics, has a large share of the market because of its versatile uses in a number of industries. The largest utilization is to produce ethylbenzene which is used to make styrene for creating polystyrene plastics and resins. It is also used for creating cumene of phenol and Acetone which are important in making epoxy resins, polycarbonate and nylons. Cyclohexane is another important derivative of benzene which is used to produce adipic acid and caprolactam – both are used to create nylon fibers and plastics. The fact that benzene is widely usedainer these chemical processes places it aing a strategic location in the value chain of the chemical industry, thus really driving up its demand and therefore market share.
• Toluene, another mainstream aromatics, has sundry uses because of this reason; it is one of the key shakers in the market. It also finds usage as a powerful solvents for substances such as paints, coatings and adhesives, enhancing drying properties and appearance. Besides its function as a solvent, toluene is used as feedstock to manufacture benzene and xylene, the latter two being substantial intermediate chemicals. Toluene as an intermediate itself is widely used in chemical synthesis especially in nitration and alkylation in order to create diverse chemicals such as TNT and polyurethane foams. The use of toluene described as a solvent and as a chemical intermediate is large and varies in the paints and coating industry, the adhesive industry and in other applications and hence adding strength to its position in the market.

By Application, Paints & Coatings segment held the largest share in 2023

• Paints and coatings are some of the largest end-use segments for aromatics, such as toluene, and xylene as solvents that help determine the properties of these end products. Toluene, thanks to its great solubility, is used in the process of putting paint and coat since it enables the one putting it even out the pigments and other addendum smoothly. It leads to an optimum consistency of the suspensions as the result of achieving the right viscosity that is important when it comes to flow and leveling. Moreover, toluene is also used as a regulator of drying time with respect to the fact due to its high volatility, its action allows for quick evaporation to ensure proper and faster drying of paint films tried and tested to not affect the quality of the result. This fast evaporating characteristic is especially appreciated in processes that require quick drying of products and thus, toluene is highly in demand by producers.
• Other principal aromatic solvent, xylene is also used in combination with toluene in paints and coatings applications. It has similar solvency properties, but increases the depth and bond of paint films as well. Thus, its solvency expands the use of various resins and binders in coatings and contributes to better weather resistance and service life of the applied coating. Apart from the solvent manufacturing, xylene is also applied in paints and coatings, for automotive refinish and industrial protectant coatings to name but few demanding coatings. Toluene and xylene are addenda to paints to improve its luster and colour stability as well as to guarantee the painted surface to withstand extreme conditions as ordered by the paint industry. Therefore, the use of these aromatic solvents has proven crucial in formulation of quality paints and coatings that meet the various demands of its clients and various industries.

Bio-based Aromatics Market Regional Insights:

North America is Expected to Dominate the Market Over the Forecast period

• In North America, the market for the bio-based aromatics is mainly affected by the regulations of the environmental protection agencies in the region seeking to cut down on the level of emissions of carbon and minimize on the use of the fossil based resources. The same has been realized by the U.S by putting measures such as policies and funds towards encouraging the usage of bio based products. The two main driving forces that spearhead the development of renewable chemicals are USDA and the EPA, especially through the BioPreferred Program where federal agencies are required to procurement bio-based products. Furthermore, the Bipartisan Infrastructure Law has provided for the authorization of large funding for bio-refinery projects which boost research in the sector. Such regulation combined with the growing popularity of industries such as packaging, automotive, and personal care has made industries embrace the bio-based aromatics. There is an increasing utilization of lignin and bio-waste into the synthesis of aromatic compounds, while supply chains and emissions are being reduced.
• Canada market is also growing in bio-based aromatics due to the availability of the natural resources and high focus on renewable feedstock. Currently, Canada being committed to lowering down its CO2 emissions and achieving the net-zero mark by 2050 supports the bio-based market well. Currently, there are established bio-economy clusters in several provinces including Quebec, Ontario, and Alberta with the ultimate goal of promoting research as well as the development and commercialization of bio based products. The Canadian companies are now aiming to turn forestry and agricultural residues into valuable biochemicals, and have established themselves as leaders in the future bio based aromatics industry. The strong industrial base of Canada in chemical and material sectors smartly is utilizing bio-based solutions to cater the emerging consumer aspirations in green products. However, the enhanced cooperation between research institutions, government agencies, and private entities in Canada should open the market in the nearest years.

Active Key Players in the Bio-based Aromatics Market

• BASF SE (Germany)
• Chevron Phillips Chemical Company LLC (U.S.)
• Dow (U.S.)
• DSM (Netherlands)
• Exxon Mobil Corporation (U.S.)
• LG Chem (South Korea)
• LyondellBasell Industries Holdings B.V. (Netherlands)
• Neste (Finland)
• Reliance Industries Limited (India)
• SABIC (Saudi Arabia) and Other Key Players

Key Industry Developments in the Bio-based Aromatics Market

• Long-term supply agreement The Dow Chemical Company and New Energy Blue LLC report that in May 2023 they will start to deliver bio based ethylene for North America from renewable agricultural residues. Dow intends to secure this ethylene to reduce carbon emissions within the plastic goods production chain as well as in products such as transportation, footwear, packets among others which are recyclable. This is Dow’s first plan anywhere in North America to use corn stover and agricultural residues to manufacture plastic.