The biobased solvents market is expected to reach $13 billion globally by 2020, according to a new report from Allied Market Research. Market volume is expected to reach 3.3 million tons by 2020, registering a compound annual growth rate (CAGR) of 4.3 percent during 2015–2020 forecast period.
The paints and coatings application segment contributed 43.6 percent share of the overall market, a trend that is expected to continue through 2020.
The primary drivers of market growth are volatility in crude oil prices, lower volatile organic compound (VOC) content and environmental friendliness. However, high production cost due to capital-intensive production techniques coupled with heavy research and development investments is the major barrier to market growth.
The ester solvents segment accounted for the highest consumption in 2014 due to its high solvency rate, easy availability and lower price compared to other solvents.
Other key findings from the report:
- The industrial and domestic cleaner application segment is projected to register the highest CAGR (7.3 percent) in terms of volume during the forecast period.
- Solketal is projected to be the fastest growing segment in the alcohols, glycols and diols market during the forecast period.
- The lactate esters segment accounted for about 25 percent of the total consumption in the overall market in 2014.
- North America was the largest consumer of D-limonene across the globe in 2014.
North America and Europe lead the market, accounting for a combined total of about 70 percent share of the market in 2014; this is expected to continue over the forecast period. Favorable government regulations and rapid adoption of innovative technologies are the key factors responsible for market growth in these regions. Rising environmental awareness among consumers and stringent environmental regulations on VOC emission of synthetic solvents have fostered the demand of biobased solvents in the North American region.
Asia Pacific is projected to be the fastest growing region during the forecast period due to increasing industrial activities and rising environmental awareness among consumers.