Bio-Acetic Acid Market size is forecast to reach $182.5 million by 2026, after growing at a CAGR of 5.2% during 2021-2026. Acetic acid is a colorless compound with a strong pungent smell and is commonly used as a reagent to manufacture chemicals such as vinyl acetate monomer, acetate esters, purified terephthalic acid, acetic Anhydride, and more. A significant amount of research has led to increased environmental concerns regarding the use of petroleum-based feedstock and an increasing focus on sustainable development to establish greener alternatives, which acts as an opportunity for the bio-acetic acid market growth. Furthermore, the rising crude oil prices and stringent government regulations are also projected to be a major driver for the bio-acetic acid industry during the forecast period.
There was a decline in the amount of acetic acid available on the global market in 2020 due to the covid-19 pandemic. While manufacturers have been able to meet the requirements of contract customers, the spot market has been reasonably tight, as suppliers have prioritized their contractual obligations, in some cases with the difficulty, with one of them requiring recourse to their global network of facilities to ensure this result. Throughout the time, this became more apparent, reflected in modest price increases in November and December 2020. Sales management and price increase announcements have been seen by different manufacturers in 2020. During the prolonged coronavirus pandemic in the western countries, acetic acid supplies were seen as much tighter but steady demand, and domestic production rates persisted. With upward movement in spot methanol, overall market activity remained sluggish, a likely counter to supplies.
Bio-Acetic Acid Market Segment Analysis – By End-Use Industry
The chemical segment held the largest share in the bio-acetic acid market in 2020 and is expected to grow at a CAGR of 6.3% during 2021-2026, owing to an increase in demand for bio-acetic acids to manufacture various chemicals. Bio-acetic acid is used for the processing of substrates in many manufacturing processes and is also used as a chemical reagent for the production of a variety of chemical compounds such as acetic anhydride, ester, monomer vinyl acetate, vinegar, and many other polymer products. In general, bio-acetic acid is used in the preparation of vinyl acetate, used in the manufacture of plastics; cellulose acetate, used in the manufacture of photographic films and textiles; and volatile organic esters, commonly used as solvents for resins, paints, and lacquers (such as ethyl and butyl acetates). It is also used in the purification of organic compounds as it can be used for re-crystallization as a solvent. Thus, these extensive applications of bio-acetic acid are accelerating its demand in the chemical industry, which is fueling the bio-acetic acid market growth during the forecast period.
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Bio-Acetic Acid Market Segment Analysis – By Geography
Europe region held the largest share in the bio-acetic acid market in 2020 up to 32% and is growing at a CAGR of 5.8% during 2021-2026, owing to spiraling demand for bio-based products to ascertain European sustainability. Bio-based products will improve the productivity of the economy and reduce its reliance on fossil fuels. The bio-based share of all chemical sales grew from 12.3% in 2015 to 22% in 2020, according to EU estimates, with a compound annual growth rate of close to 20 percent. For this reason, the EU has identified a high-potential focus area for the bio-based products sector for future growth, reindustrialization, and addressing societal challenges. Therefore, owing to this the demand for bio-based products such as bio-acetic acid is anticipated to increase, which will then drive the market growth in the European region during the forecast period.
Bio-Acetic Acid Market Drivers
Volatility in Crude Oil Prices and Health Hazards Related to Acetic Acids
Acetic acid is manufactured by aerobic fermentation of ethanol. Ethanol is dehydrogenated catalytically or oxidized into acetaldehyde, which, in turn, is oxidized into acetic acid. Ethanol is a derivative of crude oil and thus the domestic price of acetic acid is highly susceptible to the prices of its crude oil. So, the price fluctuation of crude oils also hinders the price of acetic acid raw material. In the last year, the price volatility of crude oil, such as the price of crude oil, has increased from $43.73/bbl in 2016 to $71.31/bbl in 2018 and then decreased to $64.21/bbl in 2019, according to the BP Statistical Review of World Energy. And because of this uncertainty in crude oil prices, the price of acetic acid also increases. Owing to which companies are shifting their focus on bio-based acetic acids. Furthermore, acetic acid can be a hazardous chemical if not used safely and appropriately. This substance is extremely corrosive to the skin and eyes and must be treated with great caution. On being swallowed or in the event of vapor inhalation acetic acid may be toxic to the internal organs. By harmonized classification and marking by the European Chemicals Agency (ECHA), the product is classified as hazardous to human health as it causes serious eye damage, skin burns, and more. Thus, these disadvantages related to acetic acid are unlatching door for its bio-based counterpart.
Flourishing Construction Industry Accelerating the Demand for Paints & Coatings
The biggest consumer of paints & coatings and a large consumer of plastic & polymer products is the building industry. The main intermediate vinyl acetate monomer (VAM) is used in the manufacture of various polymers and resins for paints, coatings, adhesives, films, textiles, and other end-use items. And bio-acetic acid is generally used to manufacture vinyl acetate monomer (VAM), acetate esters, purified terephthalic acid, and acetic anhydride. Governments are heavily investing in expanding the construction sector. For instance, in 2019, the Thailand government allocated THB4 billion (US$125.6 million) to finance five low-cost housing projects in the country. In February 2020, the Department of Human Settlements allocated R95.9-billion, which will support the delivery of 22,696 housing subsidies in South Africa during 2020-2021. The residential construction in countries, such as Germany, India, and United States has been increasing, and the trend is likely to continue due to the increasing demand for residential dwellings. With this, the demand for paints & coatings, and plastic products are also expected to increase, which will then drive the market growth.
Bio-Acetic Acid Market Challenges
High Cost when Compared with Conventional Acetic Acid
In addition to the growing worldwide trend towards the use of bio-based products, the use of natural and/or biodegradable acetic acid with low toxicity and good compatibility with many plastics, resins, rubber, and elastomers as replacements for traditional acetic acid has attracted the industry. Bio-acetic acid is produced from raw materials made from vegetables and is used as an alternative to acetic acid based on petroleum. Corn, maize, and sugar are the raw materials used for making bio-acetic acid. The increasing use of natural sources is eventually increasing the prices of natural raw materials, owing to which the cost of bio-acetic acid is also on an upsurge. Thus it is anticipated that the higher cost of bio-acetic acid raw materials may restrain the bio-acetic acid market growth during the forecast period.
Bio-Acetic Acid Market Landscape
Technology launches, acquisitions, and R&D activities are key strategies adopted by players in the bio-acetic acid market. Major players in the bio-acetic acid market are Zea2, Godavari Biorefineries Ltd., Sucroal SA, Novozymes AS, and Wacker Chemie AG.
In July 2019, Godavari Biorefineries Ltd obtained a Certified Biobased Product label from the U.S. Department of Agriculture (USDA). NaturoBG (1,3-Butylene Glycol), Acetic Acid Glacial, Crotonaldehyde products are now able to display a special USDA mark highlighting the biobased content percentage.
Europe dominates the bio-acetic acid market. The growing demand growth in Europe has been driven by the use of bio-acetic acid as a raw material in industries such as plastics & polymers, food & beverages, inks, paints & coatings, and chemicals.
In the food, pharmaceutical, and chemical industries, bio-based acetic acid has widespread applications. Macroscopic factors lead to the growth of the chemical and food & beverage industries, such as rising population and industrialization, and the bio-based acetic acid industry flourishes in turn.
Furthermore, rising stringent regulations regulating the use of petroleum-based goods are also expected to stimulate the market for bio-based acetic acid.
In vinegar intake, an increase has been seen as it helps to reduce weight, control blood pressure, and regulate blood sugar and cholesterol levels. As acetic acid is used in the manufacture of vinegar, the overall growth of the market is propelled by it.
Related Reports :
A. Acetic Acid Market
B. Bio-organic Acid Market
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