Bio-based coating: Despite challenges, optimism prevails
According to Markets and Markets, the bio-based coatings market was valued at EUR 10.5 billion in 2022. It is projected to grow at a CAGR of 9.5 % to reach EUR 16.6 billion in 2027. The market is developing fast but manufacturers are still reporting a weak demand.
Kamila Vítek Derynková from Spolchemie, estimates the bio-based coatings market share to be less than 10 %. In the resins industry, the bio-based proportion “could be around 5 % or even less with further growth expected in the following years – mainly in connection with the growing importance of environmentally friendly and user-friendly solutions”.
Ray Gonzales from Clariant observes that “the adoption of bio-based solutions into markets is still in its early stages. There are some applications where there is a market pull, such as agriculture and cosmetics, but others are slower and may need more of a regulator push.”
Bio-based concept easier to grasp
While sustainability has become a buzzword in the industry and society, Marcello Vitale from IVM Chemicals notes that the concept of ‘bio-based’ or ‘biorenewable’ appears to be easier to explain to today’s consumer and has greater emotional impact than the generic description of ‘sustainable’. He has seen a “significant increase in enquiries for these products. However, it is not yet clear how to carry the sustainability message up the value chain to clients and final consumers of paints and varnishes, that are often a relatively small part of the final item.” He adds that “companies with a distinctive ‘green’ reputation and outlook could gain a market advantage in the eyes of consumers relative to those who are approaching the issue piecemeal.”
Awareness of the need for bio-based solutions and responding to this by developing products are two different things as Vincent Fritzemeier from Clariant discusses: “The market is at a turning point. On one side, the climate crisis has become a daily companion in the media either through natural disasters or campaigns. On the other side, the readiness to take a risk is extremely low particularly at times of economic and political uncertainties as we have now. A minority of companies have been dedicated to the development of bio-based products for years, in most cases with minor success.”
He adds, “At this stage, the route toward bio-based coatings only opens in the form of regulation such as the European Green Deal. The upcoming carbon tax scheme that will affect all companies producing within and those exporting into the European Union has triggered the demand for solutions that enable the reduction of CO2 emissions.”
Regulatory initiatives present opportunities
The industry experts view the regulatory initiatives as an opportunity that is driving development. As well as the European Green Deal in 2025, Derynková also cites the circular economy, zero pollution policy and reduction of carbon footprint (for both production and products) to be contributory factors and points out that along with the regulation of chemical substances these “add more incentives to search for alternatives. Together, this creates the conditions for innovation and the development of more sustainable solutions.”
Future legislation will come in countries that have so far only pledged sustainability action. The industry is already preparing and Vitale highlights those companies that have been innovating by increasing the content of truly sustainable biorenewable materials in their products will be in a strong position, especially if those products can meet the performance expectations of formulators and consumers. Fritzemeier agrees that companies need to prepare for a transition or lose access to a market that promises strong future growth and adds that “there are few players who are yet able to provide 100 % bio-based products from natural materials.”
Clear challenges for the market in the next few years
The performance of bio-based alternatives to conventional raw materials is one challenge and Derynková agrees that customers still prefer conventional materials for certain applications. However, achieving a price that customers are willing to pay is also a major challenge. “So far, only the most environmentally conscious customers are able to accept the higher costs of bio-based products.”
As the bio-based market is still relatively young, one issue is a lack of clarity regarding legislation and certification, as Fritzemeier highlights: “It is difficult to follow a standardised approach. For example, the lack of homogenization towards competing certification schemes creates confusion instead of contributing to a mutual understanding of the requirements within the industries’ multiple supply or value chains. Despite this, there are opportunities to foster cooperation and comparability.”
Swift action hampered by economic uncertainty
In the pursuit of a lower CO2 footprint, reducing emissions and responding to consumer demand typically requires producers to invest in new bio-based product lines as well as the time and resources for new approval processes along the supply chain as they transition to different raw materials.
Fritzemeier states “One of the biggest challenges in the mid-to-long run will be the availability of production capacity for bio-based materials. Now, companies are in their inception phase and can easily cover the momentary demand. To serve future demands, companies need to decide and invest now into the expansion of new capacities. However, the economic downturn does not favour relevant investment decisions.” In addition, “fossil-based solution providers have a vested interest in staying viable and can leverage their economic advantages to slow the pace of change.”
Sustainable bioeconomy for strong future growth
In developing new bio-based coatings and additives, the industry is keen to avoid any overlaps or conflict with food and feed production, a commonly expressed concern when innovating with plant-related solutions. Gonzales comments that “the industry is at the beginning of the conversion towards bio-based products. The overall agricultural surface occupied with plants for bio-based products is below 1 %. Even with the most positive projections, this space is only expected to grow to 5 % by 2027.” He suggests that suppliers to the coatings industry will focus on using byproducts and waste from the food industry to avoid any competition and incorporating third party organisations such as the Roundtable on Sustainable Palm Oil (RSPO) to help ensure value chains operate sustainably.
Derynková also stresses that bio-based content is just one aspect of sustainable chemical products. Besides the economic impact, the whole value chain needs to be considered and it’s vital for each company to ensure that all “sources of raw materials (both bio-based and conventional) are environmentally friendly, socially acceptable and economically feasible.”
All the industry experts are optimistic for the future of the market. Fritzemeier calls for the industry to work together on the further evolution of bio-based and sustainable solutions. Bio-based coatings may be in their infancy, but progress has begun.
Bio-based systems are also the focus of the EC Conference Bio-based and Water-based Coatings on November 14 and 15 in Berlin, Germany. At the conference, you will learn about the latest developments in bio-based and water-based coatings.