Industry Analysis: Chemical Trends in 2025
This article discusses key trends to track changes in the chemicals industry throughout 2025 and beyond.
This article discusses key trends to track changes in the chemicals industry throughout 2025 and beyond. A Valona analyst wrote this report using Valona’s platform.
Major changes like Chemicals 2.0 and heavy investment in green chemistry will fundamentally change the way you do business.
Learn more about the economic incentives and market opportunities offered to companies that can swiftly adapt.
Key trends impacting the chemicals industry
Gain valuable insights and preparatory guidance with this analysis outlining 4 key trends impacting the Chemical industry. Stay up to date on trends to avoid noncompliance penalties, keep market access, and maintain your reputation.
By the end of this analysis, you will have an in-depth understanding of the following trends:
- Circular economy practices
- Digital transformation & Industry 4.0
- Green chemistry
- Regulations & policies
Read on to learn more about the challenges and opportunities driving this evolving sector forward.
1. Circular economy practices
What is it?
A switch to bio-based raw materials to replace fossil-based materials. Solvent-based recycling startup ReSolved Technologies illustrates this by offering a closed-loop plastic recycling solution. Larger firms like Unilever, IKEA, and H&M also heavily invest in circular economy strategies, with Unilever using SAP for supply chain tracking and H&M’s switching to 30% recycled materials by 2025.1
Why are companies heading this way?
Primarily due to its dual advantage, it provides environmental sustainability and economic benefits. The transition to bio-based raw materials, promoting industrial symbiosis, and optimizing chemical leasing can prove cost-effective and offer new revenue streams. It also promotes a positive brand image, catering to eco-conscious customers and investors.
How does this affect the industry?
It requires changes in traditional production processes and supply chains and precipitates innovation, like closed-loop recycling. There are high initial investment costs and a necessity for cross-industry collaboration, but companies can enjoy both economic and environmental benefits.
What can you do to prepare?
- Track competitors’ integration of circular economy practices and gauge their impact. Implement these sustainable practices into your own production and waste management processes – IoT implementation could provide valuable data on waste generation and facilitate optimization.2
- Consider transforming your suppliers from providers into essential partners. Chemical manufacturers stand to gain by helping their entire supply chain become more sustainable, thereby responding more quickly to shifting consumer demands.3
- Pursue innovations by actively seeking and adopting innovative strategies like industrial symbiosis, chemical leasing, and biobased materials. Invest in research and development of new processes or materials that enable recycling or waste reduction to stay ahead of industry trends.
“There are high initial investment costs and a necessity for crossindustry collaboration, but companies can enjoy both economic and environmental benefits.”
2. Digital transformation & Industry 4.0
What is it?
The adoption of AI, the Internet of Things (IoT), and cloud computing. Navigance, a German firm, leverages an AI-driven SaaS platform to automate and digitize chemical production. It draws on data from chemical facilities to identify unusual trends using cloud computing, AI, and advanced analytics.4
Why are companies heading this way?
Enhanced operational efficiency, flexibility, and productivity. Advanced data analysis tools enable real-time monitoring, predictive maintenance, and targeted resource allocation, while IoT manages process control and maintenance recommendations. AI and predictive modeling will transform to provide precise insights into chemical formulation that could vastly improve output quality.
How does this affect the industry?
It integrates digital intelligence into every aspect of operations. Digitalization leads to increased asset longevity and promotes sustainable manufacturing by identifying and addressing potential issues proactively. Other benefits include transparency and traceability in supply chain operations, as well as environmental impacts. Firms that fully embrace digital transformationcan boost efficiencies enough to cut off around 10% on supply chain costs alone.5
What can you do to prepare?
- Analyze and adapt starting with an evaluation of your production process for areas that can be digitally enhanced. This is a good opportunity to gather information on your competitors’ digital maturity and discern the most impactful technologies for potential applications.
- Champion digital transformation within your organization. Advocate for a digital culture to provide timely innovations in the industry. Steer strategic tech partnerships or investments to stay ahead of the curve.
- Use technology wisely. AI is not perfect and can have some niche use cases. Gather insights on successful tech adoption for the best ways to optimally implement AI, IoT and other technologies in your operations.6
“Digitalization leads to increased asset longevity and promotes sustainable manufacturing by identifying and addressing potential issues proactively.”
3. Green chemistry
What is it?
A shift towards sustainable and environmentally friendly materials and methods. Green chemistry uses renewable sources like plants and organic waste to reduce the harmful environmental impact traditionally associated with chemical manufacturing.
Why are companies heading this way?
Mounting environmental issues, regulatory pressures, and growing consumer demand for eco-friendly products are pushing companies towards green chemistry. The move carries economic advantages as well, including improved energy efficiency, waste reduction, and access to new market opportunities.
How does this affect the industry?
Green chemistry requires changes in manufacturing methods, raw material sourcing, and R&D focus. While the new direction opens opportunities for innovative, sustainable products, it also presents challenges such as the necessity for substantial investments and potential execution trade-offs.
What can you do to prepare?
- Monitor developments in green chemistry, discern adoption rates among competitors, and assess regulatory changes encouraging sustainability. Inform the company of the benefits and implications of switching to green chemistry.
- Develop an appropriate business model and technologies to support the transformation to green chemistry.7
- Pay attention to scientific developments to keep track of potential collaboration opportunities with research institutions. There’s a bonus of lucrative insights from advanced scientific research.
“While the new direction opens opportunities for innovative, sustainable products, it also presents challenges such as the necessity for substantial investments and potential execution trade-offs.”
4. Regulations and policies
What is it?
Shifts in laws and guidelines like the “Chemicals 2.0” initiative by the Joint Research Center in Europe. Regulations like Chemicals 2.0 can potentially affect everything from product composition to production processes.
Why are companies heading this way?
Incoming regulations like Chemicals 2.0. They want to avoid noncompliance penalties, protect market access, and maintain their reputation. It also offers economic incentives: companies that can swiftly adapt to new regulations and uphold standards of safety and environmental responsibility have swifter access to market opportunities.8
How does this affect the industry?
The corporate response to the introduction of the “Chemicals 2.0” concept will inevitably influence nearly every company in the world as it is EU-wide. It will lead to the reformulation of products, updates in production and safety protocols, and alignment with regulations to better exploit market trends
What can you do to prepare?
- Monitor regulations by staying on top of global regulatory changes. Chemical manufacturers, keeping an example like BASF in mind, who monitor updates rigorously, can adapt quickly and maintain compliance.
- Do a deep dive evaluation of new legislation and policy for its potential impact on your business operations. For instance, Chemours transformed their entire operations to comply with the low environmental impact standards set by regulatory authorities.9
- Predict and strategize using market intelligence to predict potential policy shifts. This foresight will allow early planning and strategic actions for future compliance, for example DuPont de Nemours, Inc. who increased their R&D investment to report and discover environmentally friendly methods to hit their ESG goals.10
“Companies that can swiftly adapt to new regulations and uphold standards of safety and environmental responsibility have swifter access to market opportunities.”
Sources
Valona has compiled this analysis by utilizing Valona Platform and global content sources, including government, media, and research institutions.
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1 Sustainability Magazine: Top 10 Brands Embracing the Circular Economy
2 PlugandPlay: Circular Economy Principles for Smart Waste Management
3 World Economic Forum: The chemical industry’s overlooked role
4 Research Report: Top Trends in the Chemical Industry
5 AirLiquide: Data and artificial intelligence driving Industry 4.0
6 CAS: Digital transformation in the chemical industry
7 TriplePundit: Will 2024 Be the Year the Green Chemistry Trend Takes Off?
8 EU Commission: Transforming EU Chemicals…
9 Chemours: Our 2030 Goals
10 Dupont: Sustainability Report 2023