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Bio Polyols Market Overview
Bio Polyols
market size is forecast to reach US$7.8 billion by 2026, after growing at a
CAGR of 10.2% during 2021-2026. The increasing awareness about the environment
and the rising prices of petroleum are the reasons for soaring demand of bio
polyols. Bio polyols, also known as natural oil polyols, are polyols derived from vegetable oils. A
polyol is an organic compound containing multiple hydroxyl groups. Bio
polyols are extracted from natural oils like castor oil, soybean oil, canola
oil, coconut oil and others. Out of these oils only castor oil is the only
commercially available bio polyol that is produced directly from a plant source
while the others require chemical modifications. The two types of bio polyols
are polyether polyols and polyester polyols. The
primary use of polyols is in the production of polyurethanes. Traditional
polyols are petroleum based but growing environmental concerns and
sustainability have led to the development of natural oil polyols from renewable resources. The eco-friendly
and sustainable nature of bio polyols, supply of bio-based feedstock and
fluctuations of crude oil prices are driving the global bio polyols market.
COVID-19 Impact
Owing to the
pandemic, the core industries such as automotive and construction industry are
impacted. Lockdowns and social distancing have caused many manufacturing plants
to shut down. The construction industry has been majorly hit due to labor
shortages and the lockdown imposed by governments during COVID-19, which is
aggravated by the resulting supply chain issues and financing pressures due to
the non-adherence to the completion times. According to a report by European Construction
Industry Federation (FIEC), the total investment in construction declined by
5.8% in 2020 and amounted to $13.48 trillion, which equals 10.7% of EU GDP, the
decrease was particularly dramatic in Spain, France, Italy, Czech Republic and
Poland. This in turn has impacted the bio polyols market in 2020.
Report Coverage
The report: “Bio Polyols Market – Forecast (2021-2026)”,
by IndustryARC, covers an in-depth analysis of the following segments of Bio
Polyols Market.
By Raw Materials: Soybean
oil, Canola oil, Castor oil, Palm oil, Corn oil, Coconut oil, Sunflower oil,
Linseed oil, Sawgrass oil, Mustard oil and Others
By Type: Polyester polyols
and Polyether polyols
By Application:
Foam, Coatings, Adhesives, Sealants, Elastomers and
Others
By End-Use Industry: Automotive,
Construction, Electricals and
Electronics, Furniture, Packaging,
Footwear, Pipes & fittings, Textiles and Others
By Geography: North
America (USA, Canada, and Mexico), Europe (UK, Germany, France, Italy,
Netherlands, Spain, Russia, Belgium, and Rest of Europe), Asia-Pacific (China,
Japan, India, South Korea, Australia and New Zealand, Indonesia, Taiwan,
Malaysia, and Rest of APAC), South America (Brazil, Argentina, Colombia, Chile,
and Rest of South America), Rest of the World (Middle East, and Africa)
Key Takeaways
- North America dominates the bio polyols market, owing to the increase in production of soy-based polyols which result in increased usage of bio polyols in the region.
- The escalating use of polyurethanes in the automotive industry consecutively increases the demand for bio polyols. Thus, driving the market growth.
- Increasing applications for environmentally friendly polyols in various end use industries notably in automobiles, technological advancements in the construction industry are expected to drive the demand for bio polyols through the years to come
- The major opportunity for this
market is high research spending and growing environmental awareness about bio
polyols. This has a positive impact on the market.
Figure: Asia-Pacific Bio Polyols Market Revenue, 2020-2026 (US$ Billion)
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Bio Polyols Market Segment Analysis – By Raw Material
The soy-based
segment held the largest share in the bio polyols market in 2020 and is
expected to grow at a CAGR of 8.9% during the forecast period. The bio polyols
market continues to expand as manufacturers look for alternatives to
high-priced petrochemicals. Soy polyols perform like their highly priced petrochemical
counterparts and enable manufacturers to increase the sustainability of end
products without compromising on performance. The products made with these natural oil polyols have
lighter weight, more strength and better durability. Castor oil polyol is one
of the cleanest natural oil polyols available commercially in the market. When
compared to other bio polyols castor oil-based polyols require minimal
modifications. Owing to their high purity and hydrolysis resistance properties,
castor oil polyols are expected to witness lucrative growth over the forecast
period. The cost-effective extraction of plant oils and their widespread use as
polyols has increased the demand for other natural oils polyols including canola oil, corn
oil and sunflower oil-based polyols.
Bio Polyols Market Segment Analysis – By Type
The polyether polyols segment
held the largest share of more than 55% in the bio polyols market in 2020. Polyether polyols are the
key components used in the production of polyurethanes. Polyether-based
polyurethanes provide enhanced hydrolytic stability and excellent resistance to
weak acids and bases compared to polyester-based polyurethanes. So, polyether
polyols are used in coating, adhesive, sealant, and elastomer applications. To
make polyurethanes more versatile, higher molecular weight polyol with
molecular weights from 2000 to 10,000 are used, whereas lower molecular weight
polyol is used to make more rigid products. The lower cost of polyether polyols in
comparison to polyesters
polyols further drives the growth of the market globally. Owing to the
increasing use of polyether polyols in flexible foams for the production of
cushioning applications such as furniture, bedding, and car seats, and in
carpet underlay, the market is estimated to grow in the forecast period.
Bio Polyols Market Segment Analysis – By Application
The foam segment held the largest share in
the bio polyols market in 2020 and is estimated to grow at a CAGR of 8.5%
during 2021-2026. Polyether
polyols are used as a raw material in the manufacturing polyurethane
foams. Polyurethane (PU) foam is a highly flexible material that finds a wide
range of applications in end-use industries such as automotive, furniture,
construction, and packaging. Foam is widely used in high resilience flexible
foam seating, rigid foam insulation panels, microcellular foam seals and
gaskets, durable elastomeric wheels and tires, auto suspension bushings,
electrical potting compounds, seals, gaskets, carpet underlay, and hard plastic
components. PU foams provide good thermal and sound insulation which in turn increase
their use in construction industries for soundproofing applications. In
the automotive industry, PU foams provide cushioning as well as insulation against heat and noise
of the engine. They also reduce the weight of the vehicle thus improving fuel
efficiency and lowering emission levels. According to figures from the KBA
federal motor transport authority, sales of fully-electric vehicles in Germany
increased three-fold to 194,163 units in 2020. A total of 230,635 new passenger
cars were registered in Germany, up 37 percent from May 2020. Thus, increase in
electric vehicles also increases the use of PU foams for headrest, seats,
armrest, etc. substantially boosting the growth of PU foam market and thereby,
driving the bio polys market
Bio Polyols Market Segment Analysis – By End-Use Industry
The construction
industry held the largest share of more than 22% in the bio polyols market in
2020. The increasing demand for foam used in the design and construction sector
as a thermally insulating material is expected to stimulate the growth of the
bio polyols market. Construction initiatives based on sustainable solutions are
fueling the demand for advanced building materials encompassing superior energy
efficiency and reduced carbon footprint. A relevant step within this trend is
the use of bio polyols to replace polyols. The construction industry is one of
the major consumers of plastics with pipe fittings and insulation among its
major applications. Bio polyol-based polyurethane thus has major opportunity in
this segment as a preferred alternative offering additional advantages such as
reduced cost structures, long life span, corrosion resistance and light weight.
Among the various properties offered, the thermal insulation value of the bio
polyol-based polyurethane is the most preferred. According to the U.S.
Department of Energy, heating and cooling account for about 56% of the energy
use in a typical U.S. home, making it the largest energy expense for most
homes. To maintain uniform temperature and lower noise levels in homes and
commercial properties, rigid polyurethane foams are used. These foams are
effective insulation materials that can be used in roof and wall insulation,
insulated windows, doors and air barrier sealants. Owing to these myriad
applications and benefits the bio polyols market is expected to show
significant growth during the forecast period.
Bio Polyol Market Segment Analysis – By Geography
North America
held the largest share in the bio polyol market in 2020 up to 35%. The US is
North America's largest market for bio polyols, which accounted for a major
share of the industry in 2020. Growing end-use industries in US, Canada, and
Mexico has a direct positive impact on the overall bio polyols market. This
region is the largest market in the world for soy-based bio polyols, owing to
the high availability of soy. The increasing awareness about the use of eco-friendly
and sustainable materials for the production of polyurethane foams which are
used in various end use industries such as construction, automotive, packaging,
and others is expected to drive growth of bio polyols market. Government regulations like the Weatherization
Assistance Program (WAP) that promote the use of thermal insulation will also
foster the demand in the region. Thereby, impacting the market positively.
Rigid polyurethane foam provides energy-efficient and versatile insulations and
can effectively limit energy costs. According to the report, Financing Clean
Energy Transitions in Emerging and Developing Economies, clean energy
investment needs to increase by more than seven times – from less than $150
billion in 2020 to over $1 trillion in 2030 to put the world on track to reach
net-zero emissions by 2050. The adoption of bio based polyurethane foam is one
step closer to this goal. So, this is one of the major factors accelerating the
market growth for bio polyols during the forecast period.
Bio polyols Market Drivers
Increasing environmental awareness and government regulations
Bio polyol or natural oil polyol is synthesized from various vegetable oils making them renewable. Bio polyols offer increased bio-based carbon content, reduced CO2 emissions, new marketing opportunities, and several technical advantages. Polyols obtained from renewable and sustainable resources, for example canola oil, usually are CO2 negative. This means, that plants and trees have absorbed more CO2 than it was produced during the synthesis of the polyols. Therefore, bio polyols are a great way to reduce CO2 emissions that can be beneficial for many different industries where tax breaks can be applied. Reduction of carbon footprint also opens doors for new marketing opportunities, especially for end-user products foams for DIY construction projects, footwear, automotive industry and others. Traditional polyols are synthesized from crude oil. The volatile prices of crude oil also boosted the market for bio polyols. For instance, the price of a barrel of West Texas Intermediate (WTI), fell as low as minus $37.63 a barrel as of 21 April 2020. The following factors such as - Government and regulatory bodies such as EPA and REACH compliances regarding the promotion of eco-friendly products relating to eco system and health; Government initiatives to reduce greenhouse gases emissions; are expected to drive the market for the forecast period.
Growth of construction industry
Bio polyols are used in the manufacture of polyurethane. The construction industry is one of the main end-users of polyurethane foam. The construction sector is one of the biggest contributors to climate change and buildings are responsible for much of the world’s energy waste. A green or sustainable building is the concept of creating structures that are environmentally responsible. The advantages of a green building that reduced overall energy use, whether from energy-efficient appliances, passive heating and cooling, or sustainable architecture, can dramatically reduce the overall carbon footprint of a building or even make it a net environmentally positive. According to a report by World Green Building Council, savings in a sustainable building can be very significant 25-35% energy savings compared to a conventional building. The increasing demand for foam used in the construction sector as a thermally insulating material is expected to stimulate the growth bio polyols. Furthermore, construction projects such as ‘100 smart cities’ and ‘Housing for All by 2022’ in India are influencing bio polyols demand.
Bio Polyol Market Challenges
Fluctuating prices
The
cost of bio polyols is much higher than the traditional petroleum-based polyols.
The reason behind this is its production cost. The increasing demand for
biodiesel has driven up natural oil prices and subsequently the cost of bio
polyols. These factors may hinder the market. High hydrocarbon production in
North America has helped in reducing petroleum related raw material prices for
the conventional polyols.
Bio Polyols Market Landscape
Technology launches, acquisitions,
and R&D activities are key strategies adopted by players in the bio polyols
market. Bio polyols market top companies are Arkema S.A., Global Bio Chem
Technology Group Co. Ltd., The Dow Chemical Company, BASF S.E, Stepan Company,
Bayer Material Science, Mitsui Chemicals Inc., Bio Based Technologies Llc,
Johnson Controls Inc., Cargill Inc., Jayant Agro Organics Ltd., E.I. DuPont de
Nemours & Co., Invista S.A.R.L., Polylabs and Emery Oleo Chemicals (M) Sdn
Bhd.
Acquisitions/Technology Launches
- In 2020 Mitsui Chemicals planned to hike its bio polyol capacity by almost four times by opening another systems house in India.
Relevant Reports
Polyether Polyols Market- Forecast (2020-2025)
Report Code: CMR 0512
Polyurethane (PU) Foam Market – Forecast (2021-2026)
Report Code: CMR 1059
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