Chemical Market Trends and Projections
In an increasingly environmentally-conscious world, the chemical industry is gearing up for a significant transformation. Major players such as BASF, Dow, and Covestro have announced plans to boost demand for eco-friendly chemical products from 2023 to 2028, with goals including an increase in sustainable products, reduction of CO2 emissions, and investment in recycling technologies and biobased materials.
This shift towards sustainability is not just a passing trend. The demand for sustainability-related chemical products is projected to grow 4.5 times faster than conventional products, with the market size increasing from $340 billion in 2023 to a staggering $570 billion by 2028, reflecting an anticipated 11% compound annual growth rate (CAGR).
End-consumer demand is a key driver for this growth, with the trend expected to continue shaping future chemical demand. A US survey indicates that the share of consumers willing to pay more for sustainable products has grown from 66% in 2022 to 80% in 2024. Globally, 51% of consumers now prefer sustainable options.
The rise in consumer preference for environmentally friendly products is not going unnoticed by manufacturing and consumer goods companies. These companies are developing and promoting sustainable offerings and setting sustainability goals. For instance, L'Oréal has pledged to use 95% bio-based ingredients by 2030, while H&M Group aims to use recycled or sustainably sourced materials for 100% of its packaging by the same year.
Technology is also playing a crucial role in this transformation. Advanced digital technologies, such as generative AI, can boost R&D success rates by up to 70%. Additionally, blockchain, digital product passports, and business networks can improve traceability and transparency for sustainable chemical products.
To meet future demand for sustainable products, chemical companies must accelerate innovation, develop a transparent value proposition, and build value-chain partnerships. As the world moves towards a more sustainable future, the chemical industry is poised to play a vital role in this transition.
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