RESEARCH REPORT
Future demand: opportunities for chemicals to capture growth
5-MINUTE READ
March 18, 2025
In brief
- The industry is seeing a major shift toward sustainability-related chemical products, projected to reach $570 billion by 2028, with an 11% CAGR.
- Consumer preferences and companies aligning their offerings are driving this change, with both willing to pay more for eco-friendly options.
- To capture growth and secure price premiums, chemical companies must reinvent how they go-to-market, from business models to value propositions.
Demand for eco-friendly products
Demand for sustainability-related offerings includes two types of chemical products: sustainable chemicals used to produce eco-friendly products and conventional chemicals used to manufacture products that reduce environmental impact, such as solar panels or electric vehicles. Research by Accenture shows that demand for sustainability-related chemical products has been growing, and we expect that pattern to continue.
The increase in demand starts with end-consumers. Our global research indicates that more than half of consumers are motivated to purchase eco-friendly products and are increasingly willing to pay a premium price for them (Figure 1).1 A US survey by PDI Technologies reveals that the share of consumers willing to pay more for sustainable products grew by 2 percentage points, from 66% in 2022 to 68% in 2023, and then by 12 percentage points to 80% in 2024.2
PRICE PREMIUM
80%
Consumers willing to pay more for sustainable products in 20243
Chemical customer industries commit to sustainability
Business-to-consumer (B2C) companies are responding with innovations that address this demand. They are also setting and publicly communicating their sustainability-related goals and commitments.
For example, L’Oréal pledges to use 95% bio-based ingredients in its formulas, derived from minerals or from circular processes, by 2030.4 H&M Group plans to use recycled or sustainably sourced materials for 100% of its packaging by the same year.5 Beyond acting as suppliers, chemical companies can also position themselves as strategic partners, helping customers meet their sustainability commitments.
As chemical customers strive to meet their decarbonization targets, the demand for sustainability-related chemical products and solutions will continue to grow. We estimate that demand for sustainability-related chemical products will increase by about 70%, rising from $340 billion in 2023 to $570 billion by 2028.6 This increase reflects an 11% compound annual growth rate (CAGR), expanding at a rate 4.5 times greater than the 2.4% CAGR projected for conventional products.7
OPPORTUNITY
4.5X
Faster projected growth in demand for sustainability-related chemical products compared to conventional products8
Growth in sustainability-related business segments
Looking closely at the chemical sector’s customer industries, we found that consumer demand is driving higher growth in sustainability-related segments than conventional ones. Analyzing global sales growth from 2021 to 2023 for 69 companies across 10 industries revealed that sustainability-related segments consistently outpaced overall growth,9 including conventional segments (Figure 2).10
For example, from 2021 to 2023, global sales of recycled or low-carbon-based textiles grew in double digits, while overall growth, including conventional textiles, was negative. In the automotive industry, sales of electric and hybrid vehicles worldwide grew almost 40%, whereas overall sales grew slightly less than 10%, slowed by conventional autos. The top five sectors for sustainability-related growth were automotive (37.9%), utilities (16.6%), textiles (16.0%), home and personal care (14.2%) and paper (13.3%).11
How to capture the future of demand
Given the shift in demand and the fact that price premiums for sustainability-related products may not be shared across the value chain, chemical companies will need to reinvent how they go to market.
We’ve pinpointed three key actions to help chemical companies capture future demand:
01
Accelerate innovation by reinventing R&D, based on digital, data and AI
Meeting demand for sustainable chemical products will require substantial innovation, and constrained budgets mean chemical companies will need to increase innovation effectiveness. Advanced digital technologies, such as generative AI, can boost R&D success rates by up to 70%.12 These tools allow researchers to spend less time on repetitive, manual tasks and more time on activities that create value. Innovation is becoming more tech-enabled, predictive and prescriptive.
For example, a major chemical producer, teaming with Accenture, used generative AI to streamline patent analyses, significantly reducing search times and improving accuracy. This advancement led to more effective intellectual property filings and defense, as well as reduced product lead times.
02
Develop and communicate a compelling value proposition, including traceability and transparency
Sustainable chemical offerings face an inherent challenge: Changes to the feedstock, greenhouse gas footprint or other elements of the product to be more environmentally friendly may not be immediately apparent to buyers. To justify premium pricing and stand out in the market, it’s critical for chemical companies to develop and communicate a value proposition that provides full transparency and traceability for sustainability-related features.
Technologies such as blockchain, digital product passports and business networks can provide end-to-end traceability and transparency. Blockchain creates a transparent ledger of the chemical production process, while digital passports give detailed information about a product’s value chain. Additionally, business networks connect companies within a supply chain through a digital platform, facilitating traceability.
03
Build value-chain partnerships
Capturing the growth opportunity will require collaboration across the value chain, with partnerships becoming more crucial than solo efforts by chemical companies. Co-creation, shared innovation, investment commitments and risk- and profit-sharing will be essential. Collaborations can be formed with chemical customers, governments and new partners such as technology companies or non-governmental organizations.
For inspiration, consider an example in an adjacent industry: Shell, American Express Global Business Travel, Energy Web Foundation and Accenture collaborated to boost green premiums by creating new green products and markets. They developed a green fuel platform, launching a digital solution to scale up the sustainable aviation fuels (SAF) market. This platform unites airlines, corporations, cargo players and SAF suppliers in one secure environment to capture demand.13
The path to growth
The chemical industry faces a substantial opportunity to capture the growing demand for sustainability-related products and solutions. As consumers increasingly prefer and pay more for eco-friendly products, industries are committing to reduce their greenhouse gas footprint, driving the need for sustainability-related chemical solutions.
To capture growth and secure price premiums, chemical companies can accelerate innovation with advanced technologies, develop compelling value propositions with clear traceability and build robust value-chain partnerships. By reinventing their go-to-market strategies, chemical companies will position themselves to seize their share of the growing market for sustainability-related chemical products.
To learn more about how well-established sustainability-related business segments are influencing chemical demand, read the full report.
Sources
1 Accenture Green Consumption Survey 2023
3 Ibid
4 L'Oréal social and environmental performance
5 H&M Group Sustainability Goals & Ambition
6 Accenture Research analysis of data from market reports, Oxford Economics. Note: Chemical market based on Oxford Economics chemical sales in real US$: 2023 US$4.4T, 2028 US$5.2T, difference US$800B
7 Ibid
8 Ibid
9 When overall growth lags sustainability-related growth, it indicates that the growth rate of conventional product sales is diminishing the overall figure.
10 Accenture analysis based on data derived from company annual and sustainability reports, Capital IQ and AlphaSense
11 Ibid
12 Accenture, Reinventing innovation for chemical research & development, August 2024, estimate based on Accenture project experience and market research