The Europe Green Chemicals Market was valued at USD 49.6 billion in 2024. The market is estimated to reach USD 54 billion in 2025 and is projected to grow to USD 122.3 billion by 2035, at a CAGR of 8.5% during the forecast period from 2025 to 2035.

Europe Green Chemicals Market - Key Highlights

Why is the Europe Green Chemicals Market Growing?

• The Europe Green Chemicals Market is growing mainly due to the European Green Deal, which aims to make Europe climate-neutral by 2050.
• The chemical industry is the fourth-largest manufacturing sector in Europe. It contributed over €655 billion in annual revenue in 2023 and plays a crucial role in reducing carbon emissions.
• Europe is a global leader in sustainable chemistry, featuring important regulations like REACH, the Circular Economy Action Plan (CEAP), and the European Chemicals Strategy for Sustainability (CSS).
• The broader EU climate strategy greatly supports the green transition. Green chemicals are vital for meeting EU goals, such as recycling 65% of municipal waste by 2035. The European Chemical Industry Council (Cefic) estimates that over €1 trillion in investments will be needed by 2050 for a sustainable, carbon-neutral chemicals industry.
• Germany is a leader in green chemistry investments within Europe. The German Chemical Industry Association (VCI) has set a goal for climate neutrality by 2045. Major companies like BASF have made significant commitments, planning for net-zero emissions by 2050 and investing in new technologies like electrically heated steam crackers. Other German firms, such as Bayer and Evonik, are also making substantial investments in sustainable chemicals and agriculture.
• The Netherlands is an important hub, particularly the Rotterdam chemical cluster, which is moving towards green and bio-based feedstocks. Dutch companies like DSM-Firmenich, AkzoNobel, and Shell are leading innovations in bio-based materials and sustainable coatings. The country has a strong public-private research ecosystem focused on sustainable chemistry.
• The Nordic region utilizes plentiful renewable energy and biomass resources for producing bio-based chemicals. Neste is a global leader in renewable diesel and sustainable aviation fuel in Finland. Perstorp in Sweden and Borregaard in Norway operate large bio-refineries that turn wood biomass into valuable chemical intermediates.
• The production of bio-based chemicals is growing in Europe, spurred by demand for renewable materials. The EU Bioeconomy Monitoring System provides socioeconomic indicators to measure the performance of this sector.
• Consumer demand heavily influences the market for green chemicals. The consumers are increasingly willing to pay more for sustainable products, especially those with certified environmental qualities like locally sourced or recycled content. Leading retailers are responding by increasing sustainability standards in their supply chains, boosting market demand further.
• The investment landscape for European green chemistry is strong. Public institutions like the European Investment Bank (EIB) are directing significant funds toward climate action, aiming to mobilize €1 trillion in sustainable investments by 2030. Established companies are using financing options like green bonds and sustainability-linked loans to support their transition projects. Private investments are also active, with venture capital and private equity flowing into green chemistry startups.

Market Segmentation

The Europe green chemicals market is segmented by product, application, end-user, feedstock source, and country.

Bio-alcohols Dominate the European Green Chemicals Market with 40-45% Share in 2025

By product, the overall green chemicals market is further segmented into Bio-alcohols (bio-ethanol, bio-butanol, bio-methanol), Bio-organic Acids (bio-lactic acid, bio-acetic acid, bio-citric acid, bio-adipic acid, bio-acrylic acid, bio-succinic acid), Bio-ketones, Bio-polymers (polylactic acid, bio-polyethylene), and other green chemicals.

Bio-alcohols are expected to hold the largest share of 40-45% of the overall European green chemicals market in 2025. This is mainly due to the existing production infrastructure in Europe, robust applications in various industries, and solid regulatory support for renewable fuel mandates. European bio-ethanol production is about 6 billion liters each year, with Germany, France, and Spain at the forefront with their integrated agricultural supply chains.

The segment includes bio-ethanol for fuel blending (E10, E85) and industrial uses, bio-butanol for better biofuels and chemical intermediates, and bio-methanol for shipping fuel and chemical production. Major European producers like Verbio, CropEnergies, and Pannonia Ethanol show commercial-scale operations and are expanding into second-generation feedstocks, such as agricultural residues and algae.

European bio-alcohol innovation focuses on improving fermentation technologies, optimizing enzymes, and creating integrated bio-refineries that maximize value from biomass feedstocks. Companies like Clariant, Novozymes, and Genencor (DuPont) lead in enzyme solutions that enable efficient conversion of lignocellulosic materials. This approach helps reduce production costs and environmental impact.

By Application, Industrial & Chemicals Lead the European Green Chemicals Market with 35-40% Share in 2025

The green chemicals market by application is further segmented into industrial & chemicals, pharmaceuticals, packaging, food & beverages, construction, automotive, and other applications.

In 2025, industrial and chemical applications are expected to hold around 35-40% share of the overall European green chemicals market in 2025. This demand comes from the large European chemical industry, which is valued at about €500 to €550 billion yearly. This industry increasingly needs sustainable feedstock options. It includes chemical intermediates, solvents, additives, and specialty chemicals that support manufacturing in key sectors like automotive, electronics, construction, and consumer goods.

Key Growth Drivers, Restraints, and Trends

The Europe green chemicals market is growing because of regulatory rules, industrial decarbonization needs, consumer demand for sustainability, and the use of circular economy practices.

Impact of Key Growth Drivers and Restraints

Base CAGR: 8.5%

Market Restraints

Competitive Landscape

• The European green chemicals market ecosystem includes major chemical industry leaders, specialized bio-based chemical companies, biotechnology innovators, and new cleantech startups. Top manufacturers like BASF, Dow Europe, Covestro, and Evonik continue to drive market growth with sustainability programs, integrated infrastructure, and partnerships with biotech firms to promote green chemistry innovation.
• Green chemistry specialists such as DSM-Firmenich, Corbion, Avantium, and Novamont focus solely on bio-based chemicals and sustainable materials. They use their expertise to serve growing areas like bioplastics and sustainable intermediates.
• Biotechnology companies like Novozymes and Chr. Hansen play a vital role by developing enzymes and fermentation technologies that are essential for producing green chemicals. Several startups across Europe also contribute significant innovations.
• Leading research institutions like the Fraunhofer Institute in Germany and TNO in the Netherlands, along with prominent universities, provide essential research and technology support. This foundation helps with commercialization and supports Europe’s leadership in sustainable chemistry.

Recent Developments in the Europe Green Chemicals Market

• August 2024: Arkema increased production capacity at its French site by 40% for Pebax bio-based elastomers. This move supports the growth of sustainable high-performance materials in various industrial applications. 
• January 2024: BASF and Envision Energy announced a partnership to speed up the conversion of green hydrogen and carbon dioxide into e-methanol. BASF provided its SYNSPIRE™ catalyst technology, while Envision Energy combined this with its AI-powered energy management system. 
• July 2025: The European Commission introduced an action plan in July 2025 to boost the competitiveness and modernization of the EU chemicals industry. The plan highlights the need for investment in innovation and sustainability. It includes strategies for resilience, affordable energy, decarbonization, tax incentives for clean chemicals, and simpler regulations to support green chemical manufacturers. 

Europe Green Chemicals Market Report Coverage and Summary