|
Forecast
Period
|
2026-2030
|
|
Market
Size (2024)
|
USD
4.48 Billion
|
|
CAGR
(2025-2030)
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5.28%
|
|
Fastest
Growing Segment
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Automotive
|
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Largest
Market
|
North America
|
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Market
Size (2030)
|
USD
6.03 Billion
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Market Overview
Global Eco-Friendly (Green) Polyols Market was valued at USD 4.48 Billion in 2024 and is expected to reach USD 6.03 Billion by 2030 with a CAGR of 5.28% during the forecast period. The global market for eco-friendly (green) polyols is experiencing strong growth, driven by heightened environmental awareness, evolving regulatory standards, and rising demand for sustainable alternatives to traditional petrochemical-based polyols. Sourced from renewable inputs such as natural oils (including soybean, castor, and palm), carbon dioxide, and recycled materials, green polyols are primarily used in the production of polyurethanes.
In response to mounting climate concerns, governments worldwide are tightening emissions regulations and promoting the use of renewable resources. This regulatory shift is prompting industries to transition toward bio-based polyols. Companies across key sectors such as automotive, construction, and consumer goods are increasingly adopting green materials to support ESG initiatives and achieve sustainability targets.
Advancements in chemical processing and raw material technologies have enhanced the efficiency and scalability of green polyol production, improving their commercial attractiveness. North America currently leads the market, supported by advanced industrial capabilities and favorable regulatory frameworks. Meanwhile, Asia-Pacific is expected to see the highest growth rate, driven by rapid industrialization, rising environmental consciousness, and expanding manufacturing activities in countries like China and India. Europe also remains a key proponent of renewable chemicals, underpinned by strong climate policy and a robust recycling infrastructure.
Despite their promise, green polyols face challenges such as higher production costs and volatility in the availability and pricing of bio-based feedstocks due to agricultural and geopolitical factors. Continued investment in research and development, alongside supportive policy environments and increasing corporate sustainability commitments, is set to further propel the market’s expansion in the years ahead.
Key Market Drivers
Growth of the Automotive Sector
The ongoing growth and evolution of the global automotive sector is a key driver behind the increasing demand for eco-friendly (green) polyols. In response to mounting regulatory pressure to lower carbon emissions, improve fuel efficiency, and meet global sustainability objectives, automakers are progressively incorporating renewable and lightweight materials into vehicle design and manufacturing.
According to the European Automobile Manufacturers’ Association, global car sales reached 74.6 million units in 2024, a 2.5% increase over 2023. The EU automotive market expanded modestly by 0.8%, reaching 10.6 million units sold, while North America posted a solid 3.8% growth. In contrast, sales in Japan and South Korea declined by 7% and 5.1%, respectively. Meanwhile, China experienced a strong rebound in the final quarter of 2024, bringing total vehicle sales to nearly 23 million units representing 31% of the global market. Green polyols are widely utilized in the production of polyurethane-based components such as seat cushions, interior trims, headrests, thermal and acoustic insulation, and other comfort-enhancing features. These materials contribute to both vehicle performance and energy efficiency.
The shift toward electric vehicles (EVs) has further accelerated demand for sustainable materials, as automakers seek alternatives that are not only high-performing and lightweight but also environmentally responsible. As EV production scales globally, bio-based polyols offer a viable substitute for traditional fossil-derived inputs. The upward trajectory of the automotive industry—bolstered by electrification and green mobility trends—continues to be a major contributor to the rising uptake of green polyols.
Growth of the Packaging Sector
The global packaging sector is experiencing strong growth, largely fueled by the rapid rise of e-commerce, shifting consumer preferences, and increasingly stringent sustainability requirements. In India, packaging represents the fifth-largest industry within the national economy and stands out as one of the fastest-growing sectors. According to the Packaging Industry Association of India (PIAI), the sector is expanding at a robust compound annual growth rate (CAGR) of 22% to 25%.
In response to mounting pressure to reduce environmental impact and comply with regulations targeting single-use plastics and packaging waste, companies across the value chain are turning to more sustainable material solutions. Green polyols sourced from renewable feedstocks such as natural oils or recycled materials are increasingly being adopted in the production of flexible foams, thermal insulation, and protective packaging.
According to the International Trade Administration, since 2020, more than 90% of B2B companies have transitioned to digital sales models, leveraging improved efficiency and automation tools. This shift, along with the growing trend in direct-to-consumer logistics, has intensified the need for packaging that is not only functional but also sustainable lightweight, recyclable, and biodegradable.
Green polyols enable manufacturers to meet these evolving requirements by facilitating the production of polyurethane foams with lower environmental impact. As the packaging industry continues to prioritize eco-friendly design, waste reduction, and circular material use, demand for renewable polyols is expected to grow substantially positioning them as a key driver in the advancement of the eco-friendly polyols market.
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Key Market
Challenges
Volatility
in Availability of Raw Materials
The
global eco-friendly (green) polyols market is currently facing a major
challenge in the form of volatility in the availability of raw materials. Green
polyols, which are renewable chemicals used in the production of foam
insulation, coatings, adhesives, and elastomers, have gained significant
traction in various industries due to their environmentally friendly
properties. However, the availability of raw materials has become a concern,
driven by factors such as fluctuations in the availability of crude oil and the
higher cost associated with green and bio-based polyols.
The
availability of raw materials, such as soybeans, castor oil, and corn, which
are essential for the production of green polyols, is limited. This creates a
gap between the growing demand for eco-friendly products and the limited supply
of raw materials, resulting in increased costs for green and bio-based polyols.
As a consequence, these polyols may face challenges in terms of competitiveness
within the market.
Furthermore,
the green and bio polyols market heavily relies on the cultivation of
commercial crops. However, this dependency can lead to an imbalance between the
production of crops for commercial purposes and those for food consumption.
This imbalance can potentially result in shortages of raw materials required
for the production of green and bio-based polyols, ultimately impacting their
price and availability.
In
summary, the global green and bio polyols market faces significant challenges
related to the availability and cost of raw materials, as well as the potential
imbalance between commercial and food crops. Addressing these challenges is
crucial for the sustainable growth and competitiveness of the eco-friendly
polyols industry.
Key Market Trends
Advancements in Bio-Based Polyol Technology
Technological progress is a key enabler in driving the adoption and scalability of bio-based polyols. Recent innovations in chemical engineering, biocatalytic processes, and production optimization have enhanced the efficiency, performance, and market readiness of green polyol solutions. Modern bio-based polyols are now being developed from a diverse array of renewable sources including non-edible oils, agricultural byproducts, carbon dioxide, and lignocellulosic biomass offering greater feedstock flexibility and improving supply chain stability. For example, in October 2024, Mitsubishi Chemical Group announced that its plant-based polyol, "BioPTMG," has been adopted by Kahei Co., Ltd. for use in bio-synthetic leather applications. Consumer products such as shoulder bags and wet tissue cases made from this sustainable material will be sold through "tonto," a retail brand by Triple A Co., Ltd., which specializes in eco-friendly merchandise. Developed in 2021, BioPTMG enhances the flexibility, strength, and resilience of polyurethane and polyester materials.
Emerging technologies such as enzymatic polymerization, microbial fermentation, and carbon capture integration enabling greener production methods with reduced energy inputs and lower emissions. At the same time, advancements in molecular design are allowing for the creation of polyols with tailored performance attributes such as greater durability, thermal stability, or faster curing—making them suitable for a wide range of advanced applications across sectors like automotive, electronics, and sustainable construction. With rising R&D investments and the scaling of innovative technologies from lab to industrial production, the evolution of bio-based polyol technology is set to be a key growth catalyst for the global green polyols market in the years ahead.
Segmental Insights
Type
Insights
Based on type, polyether has emerged as the dominating segment in the Global Eco-Friendly (Green) Polyols Market in 2024. Polyether
polyols are versatile compounds widely employed in the production of
polyurethane (PU) foams. These foams can be formulated into various types,
including stiff foam, soft foam, and moulding foam. The use of polyether
polyols extends beyond foams, as they are also utilized in the manufacturing of
hard polyurethane foaming polymers. These polymers find extensive applications
in refrigerators, freezers, refrigerated vehicles, thermal baffles, pipe
insulation, and other industries.
Furthermore,
polyether polyols are essential components in the production of green polyols.
These green polyols are derived from natural oils and have a wide range of
applications. They are used to manufacture coatings, inks, castings, and
deformers. Additionally, the demand for polyether polyols is expected to grow
due to their increasing use in the production of adhesives, lubricants,
elastomers, sealants, surface active agents, and other products.
To
address environmental concerns, there is a growing focus on the development of
bio-based polyether polyols. These polyols are derived from natural oils,
making them environmentally friendly alternatives. The development of bio-based
polyether polyols not only aims to address environmental issues but also opens
up new business opportunities in the market.
End
User Insights
Based on end user, Automotive has emerged as the fastest growing segment in the Global Eco-Friendly (Green) Polyols Market during the forecast period. The accelerating global transition toward electric vehicles (EVs) is significantly boosting the demand for lightweight, high-performance, and environmentally sustainable materials. Bio-based polyols are gaining traction for use in EV components such as interior trims, battery insulation, and lightweight foams. According to the International Energy Agency, China accounted for nearly 60% of all new electric vehicle registrations globally in 2023. The country’s EV market penetration surpassed 35% of total car sales up from 29% in 2022 surpassing its 2025 target for new energy vehicles well ahead of schedule.
Automakers are under growing regulatory and consumer pressure to reduce emissions across the entire vehicle lifecycle. Incorporating green polyols into production allows manufacturers to meet these sustainability requirements without compromising on performance or durability. Bio-based polyurethane foams are widely applied in seating systems, armrests, soundproofing, and thermal insulation, providing enhanced comfort while reducing environmental impact. The recovery of automotive markets in China, the EU, and North America, coupled with strong momentum in EV adoption, continues to position the automotive sector as a major growth engine for the eco-friendly polyols market.
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Regional Insights
Based on the Region, North America has emerged as the dominating region in the Global Eco-Friendly (Green) Polyols Market in 2024.North America particularly the United States and Canada has established a robust regulatory framework aimed at advancing the use of sustainable and bio-based chemicals. Policies targeting carbon emission reduction, the promotion of renewable raw materials, and overall environmental stewardship have created a supportive environment for the growth of green polyols. The region also boasts a sophisticated and mature chemical manufacturing infrastructure, which enables the efficient scaling and commercialization of bio-based polyol technologies.
Across key sectors such as automotive, construction, and consumer goods, North American companies are at the forefront of implementing ESG (Environmental, Social, and Governance) initiatives. Their commitment to reducing carbon footprints, sourcing renewable materials, and enhancing sustainable supply chains continues to fuel demand for eco-friendly polyols. Additionally, the region has been an early adopter of green polyurethane applications particularly in electric vehicles, furniture, and building insulation driving steady downstream consumption. Furthermore, North America benefits from abundant agricultural resources like soybean and castor oil, commonly used as feedstocks for bio-based polyols. Its well-integrated and developed supply chain enhances production efficiency and supports continued market leadership in the eco-friendly polyols segment.
Recent Developments
- In
April 2025, SumiSaujana Group Bhd entered into a licensing and
commercialisation agreement with the Malaysian Palm Oil Board (MPOB) to utilise
MPOB’s proprietary technologies for the production and commercialisation of
palm-based intermediates, polyols, and bio-based polyester polyols. Developed
through extensive in-house research by MPOB, these technologies provide
sustainable, palm-derived alternatives to conventional petroleum-based
chemicals. The licensed compounds are key inputs in the production of
polyurethanes, which are widely used across various industries such as
automotive, construction, adhesives, coatings, and consumer goods.
- In
April 2025, EU antitrust regulators announced that a decision on Abu Dhabi
state oil company ADNOC’s proposed USD 17.2 billion acquisition of German
chemical manufacturer Covestro will be made by May 12, according to a filing on
the European Commission's website. The Commission, which oversees competition
policy across the 27-member bloc, may approve the deal unconditionally, impose
conditions, or launch an in-depth four-month investigation following its
initial assessment. As the transaction involves a non-EU entity acquiring an
EU-based company, it may fall under the EU’s Foreign Subsidies Regulation,
which aims to address concerns over unfair competitive advantages arising from
foreign state aid.
- In
October 2024, the Abu Dhabi National Oil Company (Adnoc) reached an agreement
to acquire plastics manufacturer Covestro for approximately USD 13.10 billion,
in addition to assuming Covestro’s net debt of USD 3.28 billion. The
state-owned energy company from the United Arab Emirates had been pursuing the
German firm for over a year as part of its broader strategy to diversify its
portfolio. This acquisition aligns with Adnoc’s ‘smart growth’ and
future-proofing strategy, supporting its ambition to become one of the world’s
top five chemicals’ companies.
- In
May 2024, Chimcomplex successfully completed an investment project focused on
implementing innovative technology for the sustainable production of polyols,
following the 2022 launch of one of Europe’s most advanced polyol manufacturing
facilities in Ramnicu Valcea. The initiative was co-financed under the
“Business Development, Innovation, and SMEs” program, governed by Innovation
Norway, under contract number 2021/331014. The project carried a total eligible
value of USD 2.65 million, including USD 1.32 million in non-repayable
financial support. The newly adopted technology enables the production of
environmentally friendly “green polyols” by substituting traditional
petrochemical inputs with cleaner alternatives or natural oils such as castor,
soybean, and palm oil. These eco-friendly polyols are subsequently used in the
manufacture of soft foams for products including pillows, mattresses, and
various automotive components.
- In
March 2024, global apparel retailer Hennes & Mauritz AB (H&M) announced
the establishment of a joint venture aimed at addressing carbon emissions
associated with polyester use in fast fashion. The new entity, named Syre, is
designed to meet over half of H&M’s long-term demand for recycled
polyester. The initiative is a collaboration with Vargas Holding AB an investor
known for its role in battery manufacturer, Northvolt AB and asset management
firm TPG. Syre plans to develop twelve large-scale production facilities
globally, with a combined output exceeding 3 million metric tons of circular
polyester derived from post-consumer textiles. The venture is backed by a
binding offtake agreement with H&M, valued at USD 600 million over a
seven-year period.
Key Market Players
- Synthesia
Technology Europe SL
- Unisol India Pvt Ltd
- BASF SE
- Cargill Incorporated
- Arkema SA
- Covestro AG
- IQS Inc
- BioBased Technologies LLC
- Emery Oleochemicals LLC
- Roquette GmbH
|
By
Type
|
By
End User
|
By
Region
|
|
|
- Furniture
- Automotive
- Packaging
- Others
|
- North
America
- Europe
- Asia
Pacific
- South
America
- Middle
East & Africa
|
Report
Scope:
In
this report, the Global Eco-Friendly (Green) Polyols Market has been segmented
into the following categories, in addition to the industry trends which have
also been detailed below:
- Eco-Friendly (Green) Polyols Market, By Type:
o Polyether
o Polyester
- Eco-Friendly (Green) Polyols Market, By End User:
o Furniture
o Automotive
o Packaging
o Others
- Eco-Friendly (Green) Polyols Market,
By Region:
o North America
§ United States
§ Canada
§ Mexico
o Europe
§ France
§ United Kingdom
§ Italy
§ Germany
§ Spain
o Asia-Pacific
§ China
§ India
§ Japan
§ Australia
§ South Korea
o South America
§ Brazil
§ Argentina
§ Colombia
o Middle East & Africa
§ South Africa
§ Saudi Arabia
§ UAE
§ Egypt
Competitive
Landscape
Company
Profiles: Detailed
analysis of the major companies present in the Global Eco-Friendly (Green)
Polyols Market.
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Customizations:
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Eco-Friendly (Green) Polyols Market report with the given market data, Tech Sci
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following customization options are available for the report:
Company
Information
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