CO2 to Propylene Oxide Global Market Report 2025

The CO₂ to propylene oxide market size has grown rapidly in recent years. It will grow from $1.0 billion in 2024 to $1.14 billion in 2025 at a compound annual growth rate (CAGR) of 13.9%. The growth in the historic period can be linked to rising demand from the automotive industry, increasing applications in construction, growing need for polyurethane foams, increasing use in packaging materials, and rising environmental regulations.

The CO₂ to propylene oxide market size is expected to see rapid growth in the next few years. It will grow to $1.9 billion in 2029 at a compound annual growth rate (CAGR) of 13.5%. The growth in the forecast period can be driven by increasing adoption of green production methods, growing investments in catalyst technology, rising demand across various regions, increasing integration with downstream industries, and growing focus on sustainability and efficiency. Major trends in the forecast period include advancements in the hydrogen peroxide process, integration with digital technologies, innovations in catalyst efficiency, development of bio-based propylene oxide, and progress in sustainable manufacturing processes.

Rising environmental regulations and net-zero goals are expected to drive the growth of the CO₂ to propylene oxide market in the coming years. Environmental regulations and net-zero goals refer to mandatory legal requirements and voluntary commitments for businesses to achieve carbon neutrality. These regulations are increasing as governments intensify climate policies to meet international decarbonization commitments under the Paris Agreement, imposing stricter emission reduction targets across industries. The CO₂ to propylene oxide process supports these goals by converting captured carbon dioxide into valuable chemical intermediates, reducing industrial emissions, and promoting circular carbon utilization in manufacturing. For example, in December 2023, the UK Department for Energy Security and Net Zero reported that under the United Kingdom’s Net Zero Strategy, emissions from public sector buildings are targeted to be reduced by 50% by 2032 and 75% by 2037. As a result, rising environmental regulations and net-zero goals are fueling the growth of the CO₂ to propylene oxide market.

The increasing adoption of sustainable chemical processes is driving the CO₂ to propylene oxide market. Sustainable chemical processes involve production methods that minimize environmental impact by reducing waste, conserving energy, using renewable feedstocks, and lowering greenhouse gas emissions across the chemical lifecycle. Their adoption is rising due to stringent regulatory measures promoting industrial decarbonization, encouraging industries to implement cleaner technologies for compliance and competitiveness. The CO₂ to propylene oxide process exemplifies this transition by converting captured carbon dioxide into a valuable chemical intermediate, supporting sustainability objectives through carbon utilization and reduced reliance on fossil-based raw materials. For instance, in November 2023, the U.S. Department of Energy reported that the industrial sector, responsible for nearly one-third of total U.S. emissions, is a key focus of IEDO, whose 2050 mission emphasizes accelerating advanced technology adoption to achieve net-zero emissions. Therefore, the growing adoption of sustainable chemical processes is boosting the CO₂ to propylene oxide market.

The increasing shift toward sustainable and bio-based production fuels market growth. Sustainable and bio-based production uses renewable biological resources and environmentally friendly methods to reduce carbon emissions, lower fossil fuel dependence, and promote circular economy principles. This shift is driven by environmental and policy efforts to reduce reliance on fossil fuels, encouraging innovation in renewable feedstocks and low-carbon technologies to meet climate goals and enhance industrial resilience. The CO₂ to propylene oxide process contributes by converting captured carbon dioxide into a valuable industrial chemical, integrating carbon utilization into production, and advancing sustainable, bio-based chemical manufacturing. For example, in March 2024, the University of Sheffield reported that chemical and plastic manufacturing, which accounts for 6% of global CO₂ equivalent emissions, remains largely dependent on virgin fossil resources, with around 88% of production derived from them. Achieving fossil independence by 2050 would require producing at least 20% of these materials from biomass. Therefore, the shift toward sustainable and bio-based production is driving the CO₂ to propylene oxide market.

Major companies operating in the co₂ to propylene oxide market are Shell plc, BASF SE, Repsol S.A., Dow Inc., SABIC, Linde plc, Wanhua Chemical Group Co. Ltd., Asahi Kasei Corporation, Sumitomo Chemical Co. Ltd., INEOS Group, Evonik Industries AG, Covestro AG, Mitsui Chemicals Inc., Tosoh Corporation, Huntsman Corporation, Tokuyama Corporation, SKC Co. Ltd., AGC Inc., Manali Petrochemicals Limited, Jiangsu Zhongneng Chemical Technology Co. Ltd.

North America was the largest region in the CO₂ to propylene oxide market in 2024. Asia-Pacific is expected to be the fastest-growing region in the forecast period. The regions covered in CO₂ to propylene oxide report are Asia-Pacific, Western Europe, Eastern Europe, North America, South America, Middle East and Africa. The countries covered in the CO₂ to propylene oxide market report are Australia, Brazil, China, France, Germany, India, Indonesia, Japan, Russia, South Korea, UK, USA, Canada, Italy, Spain.

Note that the outlook for this market is being affected by rapid changes in trade relations and tariffs globally. The report will be updated prior to delivery to reflect the latest status, including revised forecasts and quantified impact analysis. The report’s Recommendations and Conclusions sections will be updated to give strategies for entities dealing with the fast-moving international environment.

The intensifying U.S. tariffs and escalating trade tensions in spring 2025 are expected to have a significant impact on the chemicals sector, which is bearing a disproportionate burden, particularly from tariffs on petrochemicals and intermediates, where affordable domestic substitutes are often unavailable. Producers of specialty chemicals, heavily dependent on Chinese raw materials, are experiencing production disruptions. At the same time, fertilizer manufacturers are seeing profit margins eroded due to tariffs on phosphate imports. In response, companies are ramping up R&D into bio-based alternatives, forming procurement alliances to consolidate buying power, and shifting production to tariff-neutral nations such as Saudi Arabia.

The CO₂ to propylene oxide market research report is one of a series of new reports that provides CO₂ to propylene oxide market statistics, including CO₂ to propylene oxide industry global market size, regional shares, competitors with a CO₂ to propylene oxide market share, detailed CO₂ to propylene oxide market segments, market trends and opportunities, and any further data you may need to thrive in the CO₂ to propylene oxide industry. This CO₂ to propylene oxide market research report delivers a complete perspective of everything you need, with an in-depth analysis of the current and future scenario of the industry.

Carbon dioxide (CO₂) to propylene oxide refers to a sustainable chemical conversion process that transforms carbon dioxide into propylene oxide, an important industrial chemical used in the production of polyurethanes and glycols. This process uses CO₂ as a carbon source, helping reduce greenhouse gas emissions while generating valuable products. Catalysts such as metal oxides or metal-organic frameworks are essential for enabling this conversion efficiently. Overall, it represents an innovative carbon capture and utilization approach within the chemical industry.

The primary technologies in CO₂ to propylene oxide include direct synthesis, indirect synthesis, catalytic conversion, and others. Direct synthesis refers to a catalytic process that converts carbon dioxide and propylene directly into propylene oxide in a single reaction step without forming intermediate compounds. These technologies are used in applications such as polyurethane production, glycol ethers, propylene glycol, and others across end-use industries including automotive, construction, textiles, chemicals, and more.

The CO₂ to propylene oxide market consists of revenues earned by entities by providing services such as process optimization, quality testing and certification, and downstream integration services. The market value includes the value of related goods sold by the service provider or included within the service offering. The CO₂ to propylene oxide market also includes sales of polyether polyols, propylene glycol, propylene oxide glycol ethers, and butanediol. Values in this market are ‘factory gate’ values, that is, the value of goods sold by the manufacturers or creators of the goods, whether to other entities (including downstream manufacturers, wholesalers, distributors, and retailers) or directly to end customers. The value of goods in this market includes related services sold by the creators of the goods.

The market value is defined as the revenues that enterprises gain from the sale of goods and/or services within the specified market and geography through sales, grants, or donations in terms of the currency (in USD unless otherwise specified).

The revenues for a specified geography are consumption values that are revenues generated by organizations in the specified geography within the market, irrespective of where they are produced. It does not include revenues from resales along the supply chain, either further along the supply chain or as part of other products.

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