Steady growth in the two largest biorenewable chemical market segments, in addition to key regulatory and research developments, will spur the industry to a high of $7 billion in 2015, more than twice the anticipated 2011 market value of almost $3 billion, according to SBI Energy's latest study "Biorenewable Chemicals World Market."
"The ever increasing price of oil is not the only driver pushing sales in the biorenewable chemicals market. In the near term, more support within regulations and legislations for funding and research and development is key to keeping the biorenewable chemicals market a lively and growing concern," says Robert Eckard, SBI Energy analyst.
Pacing the industry will be the platform biorenewable chemicals segment, which will continue to be worth approximately two-thirds of the overall biorenewable market by climbing to more than $4 billion in sales in 2015 and achieving a compound annual growth rate (CAGR) of 22% for the five year period. Slower to pick up in 2011, sales will continue to grow steadily from 2012 through 2015 for all major selling chemicals within the category. Glycerin and lactic acid will continue to be the main chemicals within the segment.
Meanwhile, the intermediate biorenewable chemicals segment will see slightly stronger growth than the platform biorenewable chemicals segment, approaching $3 billion in 2015 and showing a CAGR of 33% between 2011 and 2015. Bioethylene will be the largest intermediate biorenewable chemicals category by sales volume in 2015, although polyhydroxyalkanoates (PHA) will be the largest market by revenue due to its much higher production cost. SBI Energy estimates annual production of polylactide (PLA) will more than double between 2011 and 2015, while production of 1,3-propanediol (PDO) will triple, and PHA production will quadruple.
The world biorenewable chemicals market was rocky between 2007 and 2009. After an absolutely amazing year in 2008 in which biorenewable chemicals grew an astonishing 72% to almost $3 billion, market value dropped by 26% to $2 billion.
Global platform biorenewable chemicals were worth $1.7 billion in 2009, down 27% from $2.3 billion in 2008. This drop was entirely due to the bottom falling out of glycerin prices, heavily slashing overall revenue for the chemical despite a slight increase in production. However, 2010 proved to be a boon for the platform biorenewable chemicals segment, with total sales expected to reach an estimated $1.8 billion by year's end, up 11%. Despite the slump in 2009, the segment is managing a respectable CAGR of 12% between 2006 and 2010, primarily due to strong growth in the biorenewable lactic acid market. SBI Energy calculates that glycerin and lactic acid together will make up 96% of the platform biorenewable chemicals market in 2010.
From $232 million in 2006, the intermediate biorenewable chemicals market grew to $486 million in 2008, a growth of 110% caused by unprecedented biobutanol sales. SBI Energy forecasts the intermediate biorenewable chemicals market to reach an estimated $575 million in 2010 as all major categories within the segment apart from biobutanol are expected to show growth. Polylactic acid and PHA are the key biorenewable chemicals in the segment, capturing 72% of the market in 2009.
The U.S. and European Union were the top two biorenewable chemicals markets in 2009, capturing 22% and 19% of product sales respectively. Both regions were strong markets for almost all types of biorenewable chemicals, but it is the larger sales of polymers such as PLA and PHA in the U.S. keeping the country as the top biorenewable chemicals market. China continues to be a strong market for glycerin and lactic acid, but has yet to become a strong contender for other biorenewable chemicals segments such as bio-based polymers.