Energy and basic hydrocarbon raw materials such as methane play an integral role in the chemical and related manufacturing industries to produce chemicals. Fossil fuels are valuable sources of energy and feedstock. However, high prices and depletion of fossil feedstock reserves such as natural gas, coal, and crude oil have demanded exploration for alternatives to energy and feedstocks for the chemical industry. The rise in energy prices and growing awareness of hazardous effects of conventional energy sources has led governments to invest in alternatives such as green chemicals. Green chemicals can help in meeting the increasing demand for energy without adversely affecting the environment. Government initiatives concerning sustainable energy are also driving the need for green chemicals globally. Sustainable alternative fuels such as hydrogen, bioethanol, and biodiesel (made from vegetable oil) are developed to curb harmful emissions. These alternatives will produce negligible quantities of exhaust pollutants or greenhouse gases. analysts have predicted that the green chemicals market will register a CAGR of almost 10% by 2023.
Stringent government regulations and policies
Rising air and water pollution levels are adversely affecting all countries of the world. Premature deaths were among the 40% of the health risks. The worsening air quality has prompted the government to introduce policies to reduce pollution and protect health. The imposition of stringent regulations by the government agencies is prompting chemical manufacturers to achieve a green environment with minimum or zero harmful emissions. The increased demand for sustainable products has encouraged chemical manufacturers to use bio-based raw materials to produce alcohols, polymers, and other products. Bio-based chemical manufacturers have started following these regulations to achieve sustainable growth in the future.
Barriers in the implementation of green chemicals
Manufacturers of green chemicals have promising opportunities in the growing chemical industry globally. However, there is still a significant gap in the application of green chemicals in many end-user industries, such as electronics and construction. Many barriers are associated with green chemicals such as price and performance issues, supply chain complexities, market chaos, switching costs, and lack of analytical data on economic opportunities. However, the supply chain is unreliable. To overcome the supply chain crisis, there should be a better understanding of the marketplace, smooth collaboration across various levels, development of smart policies for procurement, and consumer awareness by providing product knowledge to chemical industry leaders.
For the detailed list of factors that will drive and challenge the growth of the green chemicals market during 2019-2023, view our report.
The market appears to be moderately fragmented. The presence of several companies, including BASF SE and Cargill Inc., makes the competitive environment quite intense. Factors such as the high demand for green chemicals from emerging economies and scarcity of non-renewable sources will provide significant growth opportunities to the green chemical’s manufacturers. DowDuPont Inc., INEOS AG, and Koninklijke DSM NV. are some of the major companies covered in this report.