Sustainability:

Where’s the
Money?
Insights for the
chemical industry
In the chemical
from upstream raw material providers to
end customers—and the industry is
looking for ways to thrive in this changing
environment. This is evidenced by a

industry, the drive fivefold increase in the number of

sustainability-related project and product
announcements made by chemical

for sustainability is companies and their customers over the

last five years. However, there has also
been a significant increase in

reshaping entire sustainability-related regulation, including

mandatory targets for greenhouse gas
emissions and plastics recycling. This has

value chains
prompted many industry executives to
question whether the shift to sustainability
will bring real value to the industry.
The answer is clearly “yes.” Over the next five years, sustainability-related offerings will account for nearly one-third of industry growth, creating a potential US$200
billion opportunity, according to recent Accenture research. These offerings will encompass existing and new products, and both sustainability-enabling products—
such as materials for windmills and solar panels—and products involving sustainable production—such as bio-based products or products made from recycled
materials (See Figure 1). This broad range means that companies across the industry can participate in this growth.

Figure 1: Growth opportunities for existing and new markets and products
Preliminary findings Solar panels
1.6 speciality coatings
3.4 EV battery gaskets
"Today‘s business"
8.8
2.0 Windmill blades 2.9 CC Absorbent
New New EV battery materials
(LFP & Silicon Anodes) ORC systems - “NEW”
8.9 Plastics for EVs 0.1 heat recovery
$72B
Sustainable Membrane materials
3.2 footwear for fuel cells 0.2 $128B
Enzymatic bio-catalysis 0.2 2.2 Bio-based rigid packaging
Markets
Bio-based
3.8 flexible packing
1.0 Bio-based inks Absolute growth
Other RP 6.7 & coatings 5.0 2022-2027 in US$B
1.9 RP for electrical & electronics
Green Polymer
Additives 0.7 Sodium-Ion Legend:
battery materials 1.1 RP for CC: Carbon Capturing
(non-EV) 5.9 packaging
EV: Electric Vehicles
RP for building
Existing and construction 3.6 LFP: Lithium Iron Phosphate
Bio & green 2.4 2.1 Polymer stabilizers
polyols OCR: Organic Rankine Cycle
Advanced polymer 1.1 RP for textiles Bio-based RP: Recycled Plastic
composites - Aviation parts 1.5 4.7 surfactants
Self-healing polymers 2.0 3D printing
polymers 1.5 RP for
automotive
and coatings 0.3

Existing Products New

Source: Accenture Research, Market reports
Demand for sustainability-
related offerings is strong
but Accenture’s research clearly shows that the
industry is already struggling to keep up with that
demand, which could limit chemical companies’
ability to take advantage of this growth opportunity.
However, companies can take several steps now—
from building plants to strengthening supply-chain
relationships—to ensure that they have access to the
resources, technology and knowledge needed to
deliver the sustainability-related offerings that
customers want. Starting out on these actions today
will help chemical companies thrive and profit from
the growing demand for sustainable offerings.
 The industry’s various sustainability announcements “traditional” industry products—making sustainability-

Where is have included initiatives focusing on new plants and

offerings, new partnerships and collaborative
agreements, and operational changes in existing plants
related offerings an especially attractive opportunity
(See Figure 2).

growth to increase efficiency and thereby reduce greenhouse

gas emissions. There is a belief that these plans have
been driven by pressure from stakeholders and
About two thirds of this growth will come from
existing products and markets related to
sustainability—insulating materials for buildings,

coming
governments for increased sustainability in the industry. plastics for electric vehicles, polyurethane foams
However, there are also sound business reasons behind used in windmill blades, and so forth. To a great
them, according to Accenture’s research. extent, these offerings will take advantage of
existing infrastructure, and thus involve relatively

from? Demand for sustainability-related chemical offerings is

growing rapidly. The market for such offerings, which
stood at approximately US$300 billion in 2022, is
expected to reach about US$500 billion by 2027—an
low levels of investment and risk.

About one third of the coming growth will come

from new markets and offerings, such as new
additional US$200 billion of the US$700 billion total electric battery materials, carbon-capture materials
expected chemical industry growth over that period. and bio-based inks and coatings. Altogether, this
broad mix of traditional and new offerings means
This translates to a compound annual growth rate of that sustainability is creating growth opportunities
11% through 2027, compared to a 2% rate for for companies across the chemical industry.

Figure 2: Projected chemical industry demand

$5.1T $500B
Sustainability-related demand
$0.5T “Traditional” demand

$4.4T Note: Chemical market based on Oxford

Economics chemical sales in real US$: 2022
$0.3T $200B US$4.4T, 2027 US$5.1T, difference US$700B
Source: Accenture Research, Market reports,
$4.6T Oxford Economics
$4.1T

2022 2027 11% CAGR 2% CAGR

The
Not surprisingly, chemical companies have been an unprecedented development in the industry. As the
expanding their operations to prepare for this plants are sold out, there are offtake agreements for
opportunity. An analysis of company announcements feedstock such as naphtha alternatives as well as
shows that over the last five years, the chemical intermediates and chemicals for customers such as

challenge industry has invested an estimated US$60 billion to

US$90 billion in new plants that produce sustainability-
related products (See Figure 3 on next page). What’s
polymers. These early agreements give chemical
companies a high level of certainty that that their
products and new plants will be profitable.

of meeting
more, that estimate does not include startups or
investments in GHG reductions at existing plants. Demand is not likely to abate any time soon. Chemical
companies’ customers from across industries have
In general, these new plant investments are focused made commitments and set targets for recycled

demand on products that are core to the industry, rather than

new or niche products. They include investments in
naphtha alternatives, such as chemically recycled,
content and increased sustainability. However, they are
falling short in meeting those commitments, running
the risk of reputational damage with investors and other
bio-based or mass balanced products, mechanically stakeholders. In part, this lack of progress is due to the
and chemically recycled standard polymers and bio- fact that they often find it difficult to find the
based intermediates and polymers. sustainability-related chemical industry offerings they
need. Across the packaging, food and beverage,
In spite of these large investments, it appears that the consumer goods and textiles industries, many large
industry will find it difficult to meet growing demand. companies are less than halfway to meeting the
Already, customers are looking for more sustainability- commitments they have set for 2025—which is rapidly
related offerings than the industry can supply. Indeed, approaching. This means that customers will continue
some new chemical plants that are not yet up and to search for sustainable packaging, plastics and other
running are reported to be sold out or nearly sold out— materials.
Figure 3: Sustainability-related new plant investments

2-4 <1 60-90

5
10

7-15
Estimate based on typical investment
for such an announcement
16-24
Estimate based on announced capacity

Announced investment

21-31
Investments in reduction of GHG
emissions from existing plants

Biobased (1) Chemical Pyrolysis Chemical Battery Mechanical Other (4) Total
recycling (2) recycling & recycling recycling
biobased (3)

Notes: 1. Biobased: incl. biobased raw materials and biomass, but excl. pyrolysis 2. Chemical recycling excl. pyrolysis 3. Investments with multiple feedstocks incl. chemically recycled and biobased raw materials 4. Other
incl. carbon capture and utilization, plastic waste sorting etc.
Source: Accenture Research, press and company announcements of major sustainability investments since 2018-2022; Selected announcements = 154, excludes start-ups and private companies, core focus on major
chemical companies, error calculation excluding outliers, assessment based on +/- 0.5 standard deviation
A blueprint for success
Overall, the market for sustainable products is highly
attractive, and it presents a clear growth opportunity
for the industry for years to come. Taking advantage
of this opportunity will require more than scaled-up
operations. As the industry evolves to meet the
demand for sustainable offerings, chemical
companies can take steps to occupy “sweet spots”
in future value chains and solidify their positions in
those chains. And the race to do so is already
underway.
 Ensure access to

To win this race, 1 sustainable feedstocks

chemical companies 2 Forge value chain partnerships

need to consider Secure IP and

several key success 3 proprietary knowledge

factors Develop compelling and

4 credible sustainability narratives
1. Ensure access to sustainable feedstocks

There is a shortage of the raw materials that will

be needed for sustainability-related offerings in
the industry. For example, companies with
recycled offerings will require sufficient
volumes of plastic waste, which could prove to
be challenging. In the U.S., the average resident
produces about 120 kg of plastic waste a year,
while a typical minimum efficient scale asset,
such as a steamcracker, might require about 1
million tons of waste a year. Thus, that plant
would need to access waste streams from
about 12 million residents. This could require
the plant to work with sources located some
distance away. In the U.S., for example, the
chemical industry is largely concentrated on
the Gulf Coast, while many metropolitan
centers are on the east and west coasts.
2. Forge value chain partnerships

Value chain partnerships will be critical. For

example, chemical companies will need to work
closely with logistics companies that can
collect, clean and sort that plastic waste and
ship it to chemical companies’ locations.
Partnering with customers will also be key, both
for understanding their needs and forming
offtake agreements, which customers seem to
be willing to make, given what has been
happening recently with new plants. Overall,
the ability to meet and exceed customer
requirements for sustainability-related
offerings—reliably, efficiently and at scale—will
depend on close collaboration with partners
across the value chain, from raw-materials
suppliers to the end customers.
3. Secure IP and proprietary knowledge

Chemicals with sustainability-related

properties—those with low carbon footprints or
made with bio-based feedstocks, for example—
will require new production processes, assets
and equipment. Thus, chemical companies that
focus on securing intellectual property (IP) and
proprietary knowledge will have an opportunity
to gain competitive advantage. This is
especially true for IP related to technology—
both production technology and information
technology. At the same time, companies can
monitor the startup landscape for opportunities
to acquire or license sustainability-related IP.
Such steps will be key to both improving core
operations and pursuing the growing segment
of new and innovative offerings.
4. Develop compelling and credible sustainability narratives

Last but not least, sustainability is an

increasingly important driver of share price and
enterprise value. That means that chemical
companies should shape their sustainability-
related narratives for investors and other
stakeholders. Communications should include
not only intentions and plans, but evidence of
actual action and progress on the sustainability
front—which will be key to building ongoing
support for the shift to sustainability.
 In the near future, the race to and missing out on the expanding products, coupled with its long
occupy the chemical industry range of sustainability-related history of successful, ongoing

The race value chain’s key hot spots can be

expected to accelerate. Thus, the
need to move ahead with the
growth opportunities.

Fortunately, the shift to

innovation. Chemical companies
that draw on those strengths to
reinvent themselves around

is on steps outlined above is urgent.

Chemical companies that don’t
act soon are likely to find
sustainability plays to the
chemical industry’s strengths—its
ability to use efficient large-scale
sustainability will be in position to
achieve significant profitable
growth for decades to come.
themselves being left behind— core operations to build quality
Author Contributors
Dr. Bernd Elser Ashley-Rachelle Horstman Serge Lhoste
Senior Managing Managing Director, North Managing Director,
Director, Global America Chemicals Global Chemicals
Chemicals Lead Strategy Lead Strategy Lead
Accenture Accenture Accenture
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Special thanks to
Dr. Karin Walczyk, Ganesh Patro, Asako Sakuma, Gaurav Sharma, Ashish Kumar
Gulgulia, Marek Jagiela and Pawel Kubik for their help with this research study.

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