CO2 to Propylene Oxide Market Report 2026

The co₂ to propylene oxide market size has grown rapidly in recent years. It will grow from $1.14 billion in 2025 to $1.3 billion in 2026 at a compound annual growth rate (CAGR) of 13.7%. The growth in the historic period can be attributed to propylene oxide demand growth, petrochemical dependency, polyurethane market expansion, early catalyst research, industrial co2 emissions.

The co₂ to propylene oxide market size is expected to see rapid growth in the next few years. It will grow to $2.15 billion in 2030 at a compound annual growth rate (CAGR) of 13.4%. The growth in the forecast period can be attributed to green chemistry adoption, regulatory emission limits, sustainable materials demand, catalyst efficiency improvements, circular economy investments. Major trends in the forecast period include rising adoption of co2 based chemical processes, growing demand for sustainable polyurethanes, expansion of advanced catalyst technologies, increased focus on emission reduction, development of pilot scale conversion plants.

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, BASF, Repsol, Dow, SABIC, Linde, Wanhua, Asahi Kasei, Sumitomo Chemical, INEOS, Evonik, Covestro, Mitsui Chemicals, Tosoh, Huntsman, Tokuyama, Manali Petrochemicals, Jiangsu Zhongneng Chemical, RTI International, Topsoe A/S, Econic Technologies, Novomer Inc. / Danimer Scientific, Newlight Technologies, LanzaTech, Carbon Clean Solutions Ltd., Global Thermostat, Carbon Engineering Ltd., Svante Inc.

North America was the largest region in the CO₂ to propylene oxide market in 2025. Asia-Pacific is expected to be the fastest-growing region in the forecast period. The regions covered in the co₂ to propylene oxide market report are Asia-Pacific, South East Asia, Western Europe, Eastern Europe, North America, South America, Middle East, Africa. The countries covered in the co₂ to propylene oxide market report are Australia, Brazil, China, France, Germany, India, Indonesia, Japan, Taiwan, Russia, South Korea, UK, USA, Canada, Italy, Spain.

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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