Bio-Butadiene Market Trends

Growth Drivers

• Expansion of bio-based product portfolios: Industries are investing and expanding bio-based product portfolios that are increasing the adoption rates of bio-butadiene. Companies diversifying their product offerings to include bio-based alternatives allows them to leverage the shifting consumer trends demanding sustainable supply chains and products. The younger demographics are at the forefront of demanding bio-based products. Bio-butadiene plays a crucial role in the transition by enabling the production of bio-based synthetic rubber, adhesives, and plastics. For instance, in June 2022, Dow signed an agreement with EcoSynthetetix to expand bio-based offerings for the global personal care sector. As leading market players continue to invest to improve the scalability of bio-butadiene production, the sector is projected to witness rapid growth.
• Rising demands for green tires: The growing demand from the automotive industry for green tires is a major driver of the global bio-butadiene sector. With the rising prevalence of electric vehicles (EVs) and hydrogen vehicles, the demand for low-emission, fuel-efficient green tires has surged. Bio-butadiene and acrylonitrile butadiene are crucial in the production of synthetic rubber for green tires. A demand surge of green tires benefits the bio-butadiene market as demand soars to increase production. For instance, in December 2023, Synthos and OMV signed a memorandum of understanding (MoU) to jointly produce sustainable rubber for high-performance tires.
  
  Additionally, government incentives and tax breaks to support eco-friendly transportation solutions is projected to further boost the global bio-butadiene sector as bio-based materials are positioned to be crucial for automotive supply chains.
• Growing sustainability initiatives and environmental regulations: Global sustainability initiatives to cut down greenhouse gas (GHG) emissions are a significant driver for the bio-butadiene market. Governments imposing environmental regulations make it imperative for industries to invest in sustainable solutions. For instance, in September 2020, Unilever announced plans to eliminate the use of fossil fuels in its cleaning products by 2030 with a USD 1 billion investment in this pursuit. The trends forecast more industries to shift from petrochemical-based products to bio-based alternatives. With a growing number of countries committing to net-zero emissions by 2050, the enforcement of environmental regulations is projected to become stricter, necessitating more companies to invest in building a robust sustainable supply chain.  

Challenges

• Feedstock volatility and competition with food supply chains: A major challenge of the bio-butadiene sector is the reliance on bio-based feedstocks such as biomass and agricultural waste. Feedstocks are susceptible to price volatility and supply fluctuations due to factors such as weather conditions. This can cause bottlenecks in bio-butadiene production, stifling the market’s growth. Additionally, livestock for bio-butadiene directly competes with food supply chains which can lead to increased prices, eventually increasing costs of production.
• Competition from petrochemical butadiene: The market faces challenges owing to competition with petrochemical butadiene and the latter has greater market penetration and adoption. Additionally, manufacturers face challenges in matching the quality of petrochemical-based butadiene. For industries, sustainability alone cannot be a viable feature for large-scale adoption of bio-butadiene. The global bio-butadiene market is poised to answer this challenge by achieving performance parity with petrochemical butadiene which is projected to hasten adoption.