Global sales of green solvents stood at USD 1,944.0 million in 2023. The industry is further projected to exhibit a y-o-y growth of 6.9% in 2024 and reach USD 2,099.5 million in the same year and surging at a CAGR of 8.0% between 2024 and 2034, demand for the green solvents is estimated to reach USD 4,532.7 million by 2034.
Among these type, bio-alcohols are anticipated to find applications in industrial and domestic cleaners, paints, coatings, adhesives and pharmaceuticals with improved sustainability and performance. Bio-alcohols segment is projected to remain a leading segment from 2016 to 2024 accounting for around a share of 30.2% in terms of value as of 2024.
Green Solvents is expected to be the largest as well as significant growing market among the product types, with highest revenue in coming years because of its increasing use in all the key end user industries such as Industrial cleaner formulation, paints and coatings formulation and pharmaceuticals.
| Attributes | Key Insights |
|---|---|
| Estimated Size, 2024 | USD 1,944.0 million |
| Projected Size, 2034 | USD 4,532.7 million |
| Value-based CAGR (2024 to 2034) | 8.0% |
As of 2024, paints and coatings applications will account for more than 25% of the overall demand in the global market. The rising environmental concerns and consumer preference for bio-based products are the reason behind this. Governments in USA, Mexico, Germany, and other countries have imposed stringent regulations on VOC emissions, compelling producers to opt for sustainable solutions.
Green solvents having low toxicity and biodegradability, fit perfectly into this regulatory setup. In addition, sustainability trends are becoming evident in the construction and automotive industries that use a large amount of paints and coatings.
The environmentally friendly production and performance capabilities of green solvents have made this the largest segment in the green solvents market. Industrial shift toward highly efficient and environment-friendly paints and coatings, along with the ongoing trend of sustainable practices are projected to be the most driving factor for the growth of global green solvents market.
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The annual growth rates of the global green solvents market from 2024 to 2034 are illustrated below in the table. Starting with the base year 2023 and going up to the present year 2024, the report examined how the industry growth trajectory changes from the first half of the year, i.e. January through June (H1) to the second half consisting of July through December (H2).
This gives stakeholders a comprehensive picture of the sector’s performance over time and insights into potential future developments.
The figures provided show the growth of the sector for each half-year between 2023 and 2024. The market was projected to increase at a CAGR of 6.4% in the first half (H1) of 2023. However, in the second half (H2), there is a noticeable increase in the growth rate.
| Particular | Value CAGR |
|---|---|
| H1 2023 | 6.4% (2023 to 2033) |
| H2 2023 | 6.6% (2023 to 2033) |
| H1 2024 | 6.8% (2024 to 2034) |
| H2 2024 | 6.9% (2024 to 2034) |
Moving into the subsequent period, from H1 2024 to H2 2024, the CAGR is projected to slightly decrease to 6.8% in the first half and relatively increase to 6.9% in the second half. In the first half (H1), the sector saw an increase of 20 BPS while in the second half (H2), there was a slight increase of 10 BPS.
Growing Consumer Adoption of Green Solvents in the Paints and Coatings Industry, Driving the Market
The rising focus on green and eco-friendly products in the paints and coatings industry is one of the key reasons behind the rise in demand for green solvents. The conventional petroleum-based solvents release harmful volatile organic compounds (VOCs) that have adverse effects on air quality, as well as human health.
Regulatory pressures pertaining to environmental issues have compelled companies operating in regions such as Europe and North America to shift to bio-based solvents.
Green solvents, including bio-alcohols and lactate esters, offer equivalent performance with low toxicity and are also easily degradable. Moreover, customers are steadily becoming more aware of the impact of product-related footprints on the environment.
As a result, a rapidly increasing number of manufacturers of paints and coatings products are working actively to meet the growing market demand for eco-friendly and sustainable products by using green solvents.
Rising Sustainability Trends and Regulatory Support Drive Adoption of Green Solvents in Pharmaceutical and Cosmetics Industries
Pharmaceutical and cosmetics sectors are witnessing increasing demand for sustainability as consumers prefer health-conscious and environment-friendly products. Low-toxicity and biodegradable green solvents that comply with clean-label trends in the cosmetics industry, as well as with strict safety standards of pharmaceuticals by replacing conventional solvents constituted of harmful chemicals finds growing applications.
Regulatory bodies such as the USA FDA and European Medicines Agency also promote use of green solvents thereby driving market growth potential across both these end-use industries. Shifting to greener raw material alternatives is not motivated only because of rising consumer awareness but many times companies themselves are willing to improve their environmental footprints.
Stricter Environmental Policies and Corporate Social Responsibility Drive Adoption of Green Solvents in Adhesives, Inks, and Industrial Cleaners
Across industries such as in adhesives, printing inks, and industrial cleaners, the use of green solvents is driven by an increasingly stringent regulatory environment. Governments have been encouraging adoption of environmentally friendly solutions to restrict emissions from industries particularly volatile organic compounds (VOC) emissions and endorsing sustainable manufacturing processes.
It has also been observed that green solvents are increasingly being used to substitute traditional chemical solvents for their better performance characteristics.
Rising number of firms are prospecting on these bio-based solvents to arrest escalating regulatory fines and maintain a positive public image with regard to environmental hazards. Growing production activities that adopt greener production process coupled with increasing corporates’ social responsibility initiatives is expected to fuel growth of green solvents market in other applications as well over the forecast period.
High Production Costs of Green Solvents Due to Complex Processes and Raw Material Fluctuations Limit Market Expansion
One of the major impediments restraining the green solvents market is their high cost of production as compared to conventionally used petroleum-based solvents.
The production of green solvents requires advanced technology and processing techniques that involve the derivation of these solvents from renewable sources such as agricultural produce, which makes it more costly than most present-day commodity chemicals derived from crude oil.
Raw materials (such as corn, sugarcane, and other feedstocks for deriving bio-based chemicals) price is highly volatile, contributing to the overall cost unpredictability.
Although industries recognize the potential long-term benefits associated with the usage of green solvents in terms of lowering their environmental footprint and ensuring regulatory compliance, they are reluctant to do so until/unless they are compelled by strict regulations or driven by economic indexing methods because of its higher costs compared to conventionally used organic solvents.
This factor hamstrings greater adoption particularly in geographies or industries where there is less-stringent pressure/regulation or consumer/patient preferences for using eco-friendly alternatives making them bear higher costs.
Technological breakthroughs leading to reduced production costs and increased economies-of-scale could prove instrumental for making green solvent products more affordable in future capitalistic competitive markets but as yet remains a key challenge within this domain.
Limited Availability of Bio-Based Feedstocks and Agricultural Constraints Create Supply Challenges for Green Solvents Market Growth
Reliance on the use of renewable agricultural resources, such as corn, soy, sugarcane, and other bio-based feedstocks, is a major hurdle faced by the green solvents market. These resources are not uniformly available in all geographies. Resource production is dependent on agriculture that can be impacted by climate, availability of land for cultivation, and other conditions beyond control.
Low crop yields or changes in agricultural focus may lead to shortage or non-availability of these resources; this also holds true if there is increased demand for these resources from other applications in the market (for example biofuels or food).
The cost and inefficiency associated with transportation and logistics when resources are sourced from limited geographies contributes to higher costs thus reducing profitability for manufacturers. Inadequate resource availability has hindered manufacturers from expanding production capacity of green solvents to meet global demands thus restricting their use and growth vis-à-vis substitute petroleum-derived products.
Principal Consultant
The global green solvents industry recorded a CAGR of 6.4% during the historical period between 2019 and 2023. The growth of green solvents industry was positive as it reached a value of USD 1,944.0 million in 2023 from USD 1,476.0 million in 2019.
During the historical period under study, the market faced fluctuations due to economic instability prevailing in the overall economy at that time. Issues including global trade disputes, fluctuating currency rates and geopolitical issues influenced various industries dependent on green solvents and created ambiguity with regard to supply and demand.
This whole scenario was further worsened with the advent of COVID-19 pandemic. The pandemic disrupted global supply chain and industrial activities which caused slowdowns in production process and reduced manufacturing capacities, especially during lockdowns where transportation, logistical issues as well as declining supply of bio-based raw materials affected the smooth supply and distribution of green solvents.
As a consequence, the industry witnessed a slight decline temporarily as the manufacturers had to face challenges on the production and supply side. It led to an extremely fluctuating market scenario during that time frame.
However, post efforts by economies toward recovery and changes in industries, rebound of demand for sustainable products such as green solvents supported with regulations and consumer preference toward greener alternatives was observed.
Once economic activity reaches pre-crisis levels, industrial activity is expected to reach its trend performance after a delay of 3-years, growing for following 4 years before stabilizing post-2030. The green solvents demand pattern is anticipated to reflect the same trend during the period.
Tier 1 companies include industry leaders with annual revenues exceeding USD 1,000 to USD 1,100 million. These companies are currently capturing a significant share of 55 to 60% globally. These frontrunners are characterized by high production capacity and a wide product portfolio.
They are distinguished by extensive expertise in manufacturing and a broad geographical reach, underpinned by a robust consumer base. The firms provide a wide range of products and utilize the latest technology to meet regulatory standards. Prominent companies within Tier 1 include : BASF SE, Archer Daniels Midland Company, Vertec Biosolvents Inc., Stepan Company, Solvay, and among others.
Tier 2 companies encompass mid-sized participants with revenues ranging from USD 500 to USD 1,000 million, holding a presence in specific regions and exerting significant influence in local economies. These firms are distinguished by robust presence overseas and in-depth industry expertise.
They possess strong technology capabilities and adhere strictly to regulatory requirements. However, the firms may not wield cutting-edge technology or maintain an extensive global reach. Noteworthy entities in Tier 2 include GF Biochemicals, Cargill Inc., Circa Group, and others.
Tier 3 encompasses most of the small-scale enterprises operating within the regional sphere and catering to specialized needs with revenues below USD 50 to USD 100 million. These businesses are notably focused on meeting local demand and are hence categorized within the Tier 3 segment.
They are small-scale participants with limited geographical presence. In this context, Tier 3 is acknowledged as an informal sector, indicating a segment distinguished by a lack of extensive organization and formal structure in comparison to the structured one. Tier 3 includes Astrobio, The Dow Chemical Company, India Glycols Limited, SHANGHAI TOPFINE CHEMICAL CO., LTD., and others.
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The section below covers assessments of green solvents sales across key countries. Countries from North America and East Asia are anticipated to exhibit promising double-digit growth over the forecast period. All the below-listed countries are collectively set to reflect a CAGR of around 6% through the forecast period.
| Countries | Value CAGR (2024 to 2034) |
|---|---|
| United States | 7.9% |
| Germany | 7.3% |
| China | 6.4% |
| India | 6.3% |
| Japan | 5.9% |
United States are projected to surge at a CAGR of 7.9% from 2024 to 2034.
The United States green solvents market is expected to be driven by the stringent environmental regulations especially for VOCs in the paints and coatings and industrial cleaners application segments.
The USA EPA has implemented various policies and acts to reduce emissions and induce sustainable development practices in the industries that use petroleum based solvents, thereby forcing industries to shift to more sustainable options such as bio based and green solvents, further augmenting industry growth.
People are becoming more aware and inclination towards bio based products due to their minimal impact on environment will boost demand especially in skin care and medicine.
Companies are actively seeking to reduce their environmental footprints, opting for bio-based solvents that meet regulatory requirements while ensuring product safety. The combination of regulatory pressure and evolving consumer preferences continues to push the demand for green solvents in the USA, making it one of the most prominent markets for these sustainable solutions.
Germany are projected to surge at a CAGR of 7.3% from 2024 to 2034.
The green solvents market in Germany is expanding, because of various factors. The rising environmental consciousness across the automotive, chemicals, and industrial sectors in the country is one of the factor.
The government of Germany provides several incentives and subsidies for the adoption of clean technologies and reduction of industrial emissions. This has led to a shift toward sustainable solvents in the production of adhesives, paints and coatings especially in the automotive sector which needs to meet stringent environment norms set by the regulatory bodies.
Being a hub of Research and development activities focused on innovation based on bio-based chemical processes also boost the growth of this market in this country. Germany’s circular economy concept specifically promotes utilization of raw materials derived from renewable resources and those that are biodegradable thus aiding expansion of green solvents further. Industries within
Germany actively seek strategies to reduce their carbon footprints considering not only stringent regulations but also more educated customers looking out for products that have lesser environmental impact. Reflecting all such factors together makes Germany one among leading consumers for green solvent adoption.
In the forecast period, China’s green solvents industry is predicted to rise steadily at a CAGR of 6.4%.
The green solvents market in China is anticipated to expand at a rapid pace in the next few years. The country’s efforts to curb pollution and degradation of the environment have set it on a path of sustainable growth. Rapid industrialization in the past few decades has led to high levels of air and water pollution. To curb emissions, the Chinese government has introduced stringent regulations for industries.
China is thus fast becoming a lucrative market for green solvents, especially for applications demanding high levels of performance such as adhesives, paints, and coatings. The chemical industry in China is increasingly adopting bio-based chemicals or green solvents to attain its larger goal of sustainable manufacturing.
The increasing demand for consumer goods such as cosmetics and pharmaceuticals - where sustainability has become an important marketing tool - will further drive this market. As China focuses on protecting the environment and also achieving sustainable development goals, the use of green solvents in industrial applications will continue to increase over time.
The section explains the growth trajectories of the leading segments in the industry. In terms of type, the bio-alcohols category will likely dominate and generate a share of around 30.2% in 2024.
Based on application, the paints and coatings segment is projected to hold a share of 25.5% in 2024. The analysis would enable potential clients to make effective business decisions for investment purposes.
| Segment | Bio-Alcohols (Type) |
|---|---|
| Value Share (2024) | 30.2% |
In the green solvents market, bio-alcohols are witnessing the highest growth due to their versatility and wide applications across multiple industries. Bio-alcohols, such as ethanol and bio-butanol, are derived from renewable sources like corn and sugarcane, making them cost-effective and environmentally friendly alternatives to petroleum-based solvents.
Their increasing use in paints, coatings, adhesives, and industrial cleaners is driven by their biodegradability, low toxicity, and alignment with stringent environmental regulations. The growing demand for sustainable solutions across various sectors is propelling bio-alcohols to lead the market expansion.
| Segment | Paints and Coatings (Application) |
|---|---|
| Value Share (2024) | 25.5% |
The paints and coatings, with a projected value share of 25.5% in 2024, is poised to significantly impact the global industry.
This is attributed to rising environmental concerns and stringent government regulations pertaining to volatile organic compounds (VOCs), compelling manufacturers to switch to sustainable, eco-friendly alternatives such as green solvents.
Formulation industries such as paints & coatings are gradually shifting their focus toward bio-based and greener technologies in line with global trends. Green solvents emit lower volatile organic compound (VOC) emissions, which result in improved air quality and reduced risk of ozone layer depletion or smog formation.
The global construction and automotive sectors, major consumers of paints and coatings, are increasingly incorporating green solvents to enhance their sustainability credentials and reduce harmful emissions. As industries transition to more eco-friendly production processes, the demand for green solvents in paints and coatings is expected to rise steadily.
This shift is positioning the segment as the largest and fastest-growing application within the green solvents market, driving innovation and expansion in the industry.
The section provides comprehensive assessments and insights that highlight current opportunities and emerging trends for companies in developed and developing countries. It analyzes advancements in manufacturing and identifies the latest trends poised to drive new applications in the market.
A few key players in the green solvents industry are actively enhancing capabilities and resources to cater to the growing demand for the compound across diverse applications. Leading companies also leverage partnership and joint venture strategies to co-develop innovative products and bolster resource base.
Significant players are further introducing new products to address the increasing need for cutting-edge solutions in various end-use sectors. Geographic expansion is another important strategy that is being embraced by reputed companies. Start-ups are likely to emerge in the sector through 2034, thereby making it more competitive.
Industry Updates
In terms of Grade, the industry is divided into Bio-Alcohols, Bio-Diols, Bio-Glycols, Lactate Esters, and Others.
In terms of Application, the industry is divided into Industrial and Domestic Cleaners, Paints and Coatings, Adhesives, Printing Inks, Pharmaceuticals, Cosmetics, and Others.
Key countries of North America, Latin America, Western Europe, Eastern Europe, East Asia, South Asia, Middle East and Africa (MEA), have been covered in the report.
The global market was valued at USD 1,944.0 million in 2023.
The global market is set to reach USD 2,099.5 million in 2024.
Global demand is anticipated to rise at 8.0% CAGR.
The industry is projected to reach USD 4,532.7 million by 2034.
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