Global Green and Bio Polyols Market 2025 – 2034

Reports Description

As per the Green and Bio Polyols Market analysis conducted by the CMI Team, the global Green and Bio Polyols Market is expected to record a CAGR of 9.4% from 2025 to 2034. In 2025, the market size is projected to reach a valuation of USD 5.65 Billion. By 2034, the valuation is anticipated to reach USD 12.65 Billion.

Green and Bio Polyols Market Overview

Bio and green polyols are environmentally friendly substitutes for the conventional petroleum-based polyols, which are widely used to manufacture polyurethanes for a variety of end-user applications from foams, coatings, adhesives, and sealants. The polyols from renewable resources such as soybean oil, castor oil, palm oil, and recyclables decrease the release of greenhouse gases as well as the use of fossil fuels. The manufacture of green and bio polyols facilitates the transition to a circular economy, enhancing sustainability across industries such as automotive, building, and furniture.

There is a rising demand for green and bio polyols based on rising environmental concerns, regulatory pressure from governments for carbon emissions, and consumer interest in sustainable products. With advancing technology, the performance and functionality of bio-based polyols have increased, and they are now more competitive than traditional ones. Governments across the globe are also providing incentives and support for the production of bio-based chemicals, which is likely to further escalate market growth in the future years.

Green and Bio Polyols Market Key Growth Drivers

The Green and Bio Polyols Market-Trends has tremendous growth opportunities due to several reasons:

• Rising In Environmental Awareness: Growing global needs for environmental conservation and global warming are driving growing demands for ecologically friendly, sustainable products, including a shift to petroleum-free to bio-based polyols from renewable raw materials. Industries and consumers alike are shifting attention towards products that reduce carbon footprints and contribute to an environmentally friendly agenda. Emery Oleochemicals, being a natural specialty chemical specialist, has been a long-time promoter of green polymer products. In October 2023, the company promoted its eco-friendly solutions at Vinyltec in Ohio and in April 2024 promoted its performance additives at Chinaplas in Shanghai, reaffirming its journey towards sustainable development.

• Supportive Incentives: Governments everywhere are increasingly using policies and incentives—such as tax credits, grants, and subsidies—to encourage bio-based product development and adoption, including the use of bio-based polyols. These efforts can help offset the high front-end costs and drive market expansion for green technologies. In August 2024, the U.S. Environmental Protection Agency (EPA) demonstrated its commitment by recognizing companies under its Pollution Prevention (P2) Recognition Project, which recognizes innovative and environmentally responsible technology. Such initiatives spur companies to invest in green technologies and bring government support to environmentally friendly industrial practices.

• Automotive Industry Demand: The automobile industry is leaning increasingly towards biobased and lightweight materials to save fuel and emissions, as green and biobased polyols are employed in automobile seat and headrest polyurethane foam and interior panels. This is part of the larger trend towards sustainability material usage. In July 2024, Emery Oleochemicals furthered its leadership in doing so with the launch of a portfolio of ester base stocks and electric vehicle (EV) fluid building blocks, consisting of thermal fluids, transmission, and motor oils, evidencing its focus on sustainable innovation within the transportation industry.

Green and Bio Polyols Market Key Threats

The Green and Bio Polyols Market-has a number of primary threats that will influence its profitability and future development. Some of the threats are:

• Involvement of High Production Costs: Bio-based and green polyol production is also more expensive than conventional petroleum-based ones, subject to renewable raw material price, high technologies necessary, and low economies of scale. These high prices can be an adoption barrier, especially in price-sensitive markets. Companies are beating this by exploring R&D investments to improve efficiency and avoid the high prices. In April 2024, Emery Oleochemicals further strengthened its worldwide R&D capabilities in product innovation with a new cutting-edge application lab in Rayong, Thailand, to drive green polymer additives and leverage the highest economic sustainability of green polyols.

• Slow Adoption in Developing Countries: Adoption of green and bio-based polyols is restricted in most developing nations by paltry levels of know-how, infrastructural issues, and costs, discouraging their market development despite anticipated environmental gain. In an effort to bridge such gaps, firms such as Emery Oleochemicals are doing a good job in encouraging green solutions in emerging economies. In April 2023, Emery’s Green Polymer Additives demonstrated its newest natural-based additives at Chinaplas 2023, such as the biodegradable plasticizers EDENOL 1208 and EDENOL 2178. The innovations will help support industries to become more sustainable while further consolidating the company’s leadership in the Asia-Pacific market.

Green and Bio Polyols Market Opportunities

• Expansion into New Sectors: Green and bio-based polyols are opening up new markets beyond their traditional applications, as sectors like textiles, electronics, and medical devices seek to examine the potential for creating sustainable, high-performance materials. Migration is driven by growing environmental regulation and consumer demand for environmentally friendly products. For instance, Covestro launched bio-circular polyether polyols for the production of insulation and cooling systems, and at Techtextil 2024, it exhibited biobased alternative leathers and breathable vegan paints for the textiles sector. These products illustrate how bio-based polyols are facilitating cleaner solutions for various industries with wider sustainability objectives.

• Partnerships & Collaborations: Collaborations between companies, research institutions, and governments are accelerating the development of green polyols through resource sharing, technology transfer, and wider market visibility. For instance, Mitsui Chemicals’ May 2023 collaboration with Sanyo Chemical Industries saw the formation of Japan Polyol LLP 50-50 joint venture formed to produce polypropylene glycols (PPGs), key in polyurethane end-use applications like automotive parts and insulation. This collaboration is intended to boost productivity and ensure a reliable source of sustainable raw materials, a sign of how strategic collaborations are driving growth and innovation in the bio-based polyol sector.

Green and Bio Polyols Market Category Wise Insights

By Type

• Polyester Polyols: Polyester polyols formed by polycondensation between diacids and diols produce polymers with ester linkages having high mechanical strength, chemical resistance, and thermal stability. Because of these properties, they are significant in coatings, adhesives, sealants, and elastomers. In December 2023, Lecron Group of China halted expansions for its 45 ktpa polyether polyol plant and shifted focus towards amine-terminated polyethers. The chemicals, prized for their high strength and low viscosity, are increasingly gaining acceptance in wind power usage, spurring China’s shift towards renewable energy development.

• Polyether Polyols: Polyether polyols are made through polymerization of epoxides such as ethylene oxide or propylene oxide using a multifunctional initiator, which results in low viscosity polymers that are hydrolytically stable. Such properties make them suitable for use in the manufacture of flexible polyurethane foams. In December 2023, Dow Chemical expanded the capacity of its 120 ktpa polyether polyol plant at Zhangjiagang, China, to make waterborne polyurethane dispersions (PUDs). These PUDs are eco-friendly alternatives to traditional polyurethanes and help the industry shift toward sustainable options.

By Application

• PU Rigid Foam: Rigid polyurethane (PU) foam is a high-performance insulant with a low thermal conductivity and a high compressive strength and is used extensively in building insulation, refrigeration, and many industrial applications. In May 2025, manufacturers were more active in developing environmentally friendly alternatives for rigid PU foam, an area of interest being such developments as bio-based polyols and recyclable chemicals. These innovations aim to reduce the environmental impacts of production and end-of-life disposal, in keeping with growing sustainability standards in various industries.

• CASE (Coatings, Adhesives, Sealants, Elastomers): The CASE market—coatings, adhesives, sealants, and elastomers—is polyurethane-based materials since they are robust, flexible, and hard to degrade environmentally, thus positioning them in a state of dominance once industrially used. They are utilized to their best advantage for their capacity to deliver better performance under tough conditions. In October 2023, Ashland launched a new series of silicone-free, high-performance oligomeric alkyl polyether polyols for premium industrial coatings. These products are designed to present ecologically responsible, cleaner products of greater performance by improved wetting and low foam, agreeing to the clean, efficient, and chemical-oriented trend of the company.

• PU Flexible Foam: Flexible polyurethane (PU) foam is an open-cell, loose material highly valued for its excellent cushioning capacity and suitability to use in furniture, bedding, automobile seat cushions, and packaging. Its durability, lightness, and comfort have rendered it universally accepted across all industries. Huntsman Corporation acquired Foamex Products in April 2023. Foamex Products is a company that manufactures polyether polyols which find applications in flexible PU foams. This strategic deal is expected to enhance Huntsman’s technology and market position in the flexible polyurethane foam market, paving the way for future growth and supply chain resiliency.

By End-User Industry

• Carpet Backing: Carpet backing gives carpets the structural stability and support they require, conventionally through man-made solutions. There is, however, growing indication of a movement towards using eco-friendly solutions produced with green polyols from renewable feedstocks. Interface, Inc. launched a carbon-negative rubber floor prototype in its nora brand during January 2025. This innovation captures more carbon than it emits when produced, as a portion of the company’s approach towards being carbon negative by 2040. With the use of bio-based and carbon-sequestering material, Interface demonstrates its firm commitment towards flooring and carpet back sustainability.

• Automotive: The automotive sector is heavily dependent on polyurethane elastomers and foams for interior parts, seats, and insulation. Due to improved environmental regulations and sustainability, the industry is increasingly using green and bio-based polyols to reduce carbon footprints and enhance recyclability. In December 2024, Jaguar Land Rover (JLR), Adient, and Dow came together to make closed-loop PU foam seats using the recycling of end-of-life vehicle seat foam for making new foam material. The process reduces carbon emissions and landfill waste and helps in achieving circular economy goals without compromising comfort and performance levels.

• Packaging: Polyurethane finds extensive application in packaging because it is lightweight, has insulating properties and protective functions. Since sustainability is now a concern, environmentally friendly polyols that are made from renewable sources are being used to manufacture sustainable packaging materials. In January of 2025, scientists created a recyclable thin-film soft electronic material using a water-based polyurethane dispersion. This is a breakthrough that promises new applications for smart packaging, where a balance of environmental stewardship and high functionality can be achieved. The innovation tracks increased calls for sustainable but high-performing materials in the packaging sector, enabling efforts to cut plastic waste and enhance recyclability.

• Furniture and Bedding: Polyurethane foams are widely applied in furniture and mattresses for their cushioning and comfort characteristics. Green polyols are applied in such applications to mitigate environmental effects and achieve sustainability. The advances in the bio-based polyols have made it possible to create more environmentally friendly options over the conventional petroleum-based foams. For example, Scandinavian startup Agoprene has led the development of eco-friendly furniture foam based on seaweed, which also solves environmental issues tied to traditional polyurethane foams. Moreover, the furniture and bedding industry accounts for approximately 25% of the green and bio polyols industry, with nearly 40% of new products within this industry now using bio-based polyols, an increasing consumer desire for sustainable and renewable materials. These advances underscore the commitment of the industry to incorporating sustainable practices and materials in furniture and bedding uses.

• Construction: Polyurethane materials are one of the most significant materials in the construction industry, especially for insulation materials, sealants, and coatings, with the benefits of energy saving and reducing environmental impact. The use of green polyols in such materials enables the formation of environmentally friendly building materials. Researchers in February 2023 developed a strain-tunable polyurethane nanofiber membrane for thermal management. The novel material can alternate between solar heating and radiative cooling, offering energy-efficient technology for buildings. The breakthrough is a significant step towards the use of less environmentally damaging materials in the building industry and towards greater sustainability.

Green and Bio Polyols Market Impact of Latest Tariff Policies

Current tariffs by leading players like the United States and the European Union have played a major role in the global green and bio polyols market. Tariffs imposed on raw materials being exported from other nations, including vegetable oils and bio-based chemicals, have escalated the cost of production for manufacturers using such materials. For instance, the United States applies tariffs on numerous bio-based feedstocks, affecting activities in supply chains and mechanisms of pricing throughout the sector. It has led to an incentive for businesses to go back to sourcing practices and try alternate vendors or geographic locations as a way of hedging the rising costs.

Government authorities have developed policies of import moderation and indigenous production to address these problems. The National Bio-Energy Mission of the government of India is one such policy that aims at indigenous development of bio-based industries and green polyol production as a part of it. The European Union Green Deal also prescribes means of instilling support for green chemical manufacturing in members to enable them to cut reliance on external suppliers. Such interventions are aimed at inducing self-sufficiency and resilience in the face of uncertainty in global trade.

These aside, the bio and green polyols sector continues to face difficulties in the aftermath of changed tariff landscapes and shifting world trade policy. Producers are compelled to engage in a sensitive game of rule-making compliance, cost management, and supply chain remodeling. Companies are investing in research and development to develop new production methods and broaden their product lines as a way of staying competitive. It requires constant partnership of industry players and the government to tackle such challenges and enable sustainable development for the green and bio polyols sector.

Report Scope

Green and Bio Polyols Market Regional Perspective

The Green and Bio Polyols Market can be divided across different regions such as North America, Europe, Asia-Pacific, and LAMEA. This is a cursory overview of each region:

• North America: In North America, the use of green and bio-based polyols is on the move in several industries. In the United States, the Environmental Protection Agency (EPA) has been a mainstay, with its environmental policies of 2024 facilitating CASE industries to shift towards utilizing greener material, and the United States becoming the leading consumer of green polyols. The government in Canada provides incentives to business firms using bio-based polyols to minimize carbon footprints and facilitate eco-friendly production. Back in Mexico, the construction and automotive sectors in the country are increasingly adopting green polyols in response to both sustainable-oriented trade agreements and the environment.

• Europe: Germany’s strong green measures have driven the consumption of green polyols, particularly for its automobile industry, whose buyers’ needs and regulatory necessities are rooted in bio-based content. Incentivization of green energy and greener materials has been encouraged in France by new 2025 EU state aid rules, allowing industries to transition towards green polyols. The United Kingdom, after Brexit, has imposed its own environmental regulations and is targeting net-zero by 2050, encouraging the use of green polyols even more. Across Italy, Spain, Russia, the Netherlands, and the remainder of Europe, countries are coming on board with the EU sustainability agenda, transferring to bio-based materials to reduce emissions of greenhouse gases and facilitate a circular economy.

• Asia-Pacific: Increased industrialization and urbanization in China have, to a large extent, raised the level of demand for green polyols, especially in the building sector, due to the government focus on energy-efficient buildings. Joint ventures between organizations and institutions in Japan have raised the level of production of green polyols, as well as Japan’s environmental protection goals. Government incentives in India to promote bio-based products have grown, and industry has been encouraged to adopt green polyols. South Korea, New Zealand, Australia, Taiwan, and the broader Asia-Pacific, however, have brought policy interventions and invested in research to promote the use of sustainable materials, including green polyols, in the automotive, construction, and electronics industries.

• LAMEA: Brazil’s abundant natural resources, combined with government support, in the guise of sustainable agriculture, bio-based industries, and expansion in green polyols, have resulted in Brazil becoming the biggest producer of bio-based polyols. In the Middle East and Africa, nations are increasingly adopting sustainable practices. Expenditure on renewable energy, as well as on green products, is growing, with those countries’ governments beginning to understand the importance of moving to a green economy. This aligns with global sustainability goals and the need for environmentally friendly solutions across all industries.

Green and Bio Polyols Market Key Developments

In recent years, the Green and Bio Polyols Market-has experienced several crucial changes as the players in the market strive to grow their geographical footprint and improve their product line and profits by using synergies.

• In April 2025, Arkema announced that its entire range of acrylic thickeners produced in Europe will now contain up to 30% bio-based content, resulting in up to a 25% reduction in product carbon footprint compared to standard grades, while maintaining the same high performance and cost for customers. These new bio-based rheology additives-sold under the Rheotech, Thixol, and Viscoatex brands-are designed for use in paints, coatings, adhesives, and sealants, supporting more sustainable solutions for homes and industry. This move, enabled by Arkema’s bio-sourced ethyl acrylate production in France, reflects the company’s commitment to sustainability and helping customers achieve their carbon reduction goals.

• In September 2022, Covestro introduced more sustainable polyether polyols made from bio-circular raw materials, allowing both key components for polyurethane (PU) foams- polyether polyols and isocyanates be produced using renewable resources like biowaste and plant residues via a mass balance approach. These new materials, certified under ISCC PLUS, offer the same high quality and can be used immediately in existing manufacturing processes as drop-in solutions, helping industries such as construction, furniture, and automotive reduce their carbon footprint without technical changes. This innovation marks a significant step toward Covestro’s climate neutrality and circular economy goals, enabling customers to meet their sustainability targets.

These important changes facilitated the companies to widen their portfolios, to bolster their competitiveness, and to exploit the possibilities for growth available in the Green and Bio Polyols Market. This phenomenon is likely to persist since most companies are struggling to outperform their rivals in the market.

Green and Bio Polyols Market Competitive Landscape

The Green and Bio Polyols Market is highly competitive, with a large number of product providers globally. Some of the key players in the market include:

• Emery Oleochemicals
• Cargill Inc
• Arkema SA
• Mitsui Chemicals
• BASF SE
• Dow Chemical company
• Convestro AG
• Bayer AG
• Stepan Company
• Biobased Technology
• JAYANT AGRO-ORGANIC LIMITED
• Novomer Inc
• PolyGreen
• Huntsman International LLC.
• Roquette Frères
• Mitsui Chemicals Inc
• Others

These firms apply a sequence of strategies to enter the market, including innovations, mergers and acquisitions, as well as collaboration.

The Green and Bio Polyols Market is led by market leaders like BASF SE, Covestro AG, Cargill Inc., and Emery Oleochemicals, with innovative, sustainable options for conventional petroleum-derived polyols. These industry leaders are pushing sustainability through the development of bio-based polyols made from natural oils, sugars, and crop waste. Covestro’s carbon-reducing polyurethane offerings and Cargill’s BiOH® polyols are achieving strong traction in automotive, furniture, and packaging markets, helping to reduce emissions and promote circular economy practices worldwide.

In addition to large industry players, regional innovators such as Jayant Agro-Organics and Stepan Company are leveraging renewable feedstocks like castor oil to develop cost-competitive niche solutions for regional markets. Collaborations with agricultural cooperatives ensure a sustainable supply base and build rural economies. With increasing global sustainable farming practices, biofertilizer companies like Symborg and Novozymes are researching polyol-based biodegradable packaging to minimize environmental impacts across the supply chain.

Parallelly, global and regional collaborations are shaping market expansion. In 2025, AkzoNobel and Jotun piloted green polyol-based powder coating for farm machinery in Asia and Africa. The growth in smart agriculture technology uptake and higher uptake of slow-release fertilizers also spurred demand for long-term, environmentally friendly coatings and materials. This intersection of worldwide R&D leadership and bottom-up innovation is propelling the uptake of green and bio polyols in construction, healthcare, and precision agriculture.

The Green and Bio Polyols Market is segmented as follows:

By Type

• Polyester Polyols
• Polyether Polyols

By Application

• PU Rigid Foam
• CASE
• PU Flexible Foam

By End-User Industry

• Carpet Backing
• Automotive
• Packaging
• Furniture and Bedding
• Construction

Regional Coverage:

North America

• U.S.
• Canada
• Mexico
• Rest of North America

Europe

• Germany
• France
• U.K.
• Russia
• Italy
• Spain
• Netherlands
• Rest of Europe

Asia Pacific

• China
• Japan
• India
• New Zealand
• Australia
• South Korea
• Taiwan
• Rest of Asia Pacific

The Middle East & Africa

• Saudi Arabia
• UAE
• Egypt
• Kuwait
• South Africa
• Rest of the Middle East & Africa

Latin America

• Brazil
• Argentina
• Rest of Latin America