TAGS: Waterborne Adhesives Sustainability / Natural Adhesives Acrylic Adhesives Sealants
Markets and Markets (M&M) anticipates that the global water-based resins market which is valued at USD 56.5 billion in 2024 and is projected to reach USD 73.7 billion by 2029, growing at 5.5% CAGR from 2024 to 2029 forecast period. The market for water-based resins is experiencing notable growth, driven by increasing demand across various applications such as paints and coatings, adhesives and sealants, and inks.
Encouraging Manufacturers to Invest in Water-based Solutions
This global market expansion is primarily fueled by rising environmental concerns and regulatory pressures to reduce volatile organic compound (VOC) emissions. Water-based resins, which emit minimal or no VOCs, are becoming the preferred choice in many industries over solvent-based alternatives.
Key sectors such as automotive, construction, furniture, packaging, textiles, and printing are increasingly adopting water-based resins for applications like paints and coatings, adhesives and sealants, and inks, due to heightened consumer awareness and a push for eco-friendly technologies. This surge in demand is encouraging manufacturers to invest in water-based solutions for a wide range of applications.
While solvent-based resins still hold a significant market share in developing economies due to their superior performance, the global trend is shifting towards greener products, offering growth opportunities for water-based resins, especially in emerging applications. However, challenges such as high production costs and lower performance compared to solvent-based options may impede market growth.
Increasing Shift Toward Environmentally Friendly Products
Water-based resins are becoming popular substitutes for solvent-based resins in applications like paints, coatings, inks, and adhesives due to their environmentally friendly properties. Historically, solvent-based resins with high volatile organic compounds (VOCs) were preferred, but stricter regulations aimed at reducing VOC emissions have curtailed their use.
VOCs, found in harmful substances like benzene and formaldehyde, pose significant health and environmental risks. Many countries, including the US, the UK, and Germany, have established stringent laws to regulate VOC emissions. For instance, the US EPA limits indoor coating VOCs to 380 grams per liter. Similarly, China mandates water-based coatings in various applications to reduce VOC emissions, given its significant role in the paints and coatings sector.
The European Parliament also regulates VOCs in decorative paints and automotive refinishes. Regulatory bodies such as BPR, EU Ecolabel, BCF, TSCA, CAA, ASTM, and REACH have enacted standards for VOC limits in paints and coatings. These regulations drive the shift from high-VOC solvent-based resins to water-based resins, spurring innovation and shaping the market as manufacturers develop products that comply with these environmental standards while maintaining high performance and quality.
Restraint: High-cost and Low-performance of Water-based Resins
Water-based resins, which utilize water as the primary solvent, are deemed more environmentally friendly than their solvent-based counterparts. However, transitioning to these resins presents significant challenges for manufacturers, primarily due to the high switching costs involved in converting from solvent-based to water-based resin production. The capital expenditure and fixed costs required to adopt the new technology are substantial, leading many small-scale manufacturers, particularly in developing regions, to continue using solvent-based resins due to these prohibitive costs.
Furthermore, the market growth for water-based resins is constrained by their relatively lower performance compared to solvent-based resins. Using water as the main solvent introduces certain disadvantages, such as longer evaporation times. Additionally, applying water-based coatings to metals can lead to corrosion in tanks, pipes, and other metallic surfaces. These factors collectively pose significant challenges and are expected to impede the growth of the water-based resins market.
Increasing Use of Water-based Resins in Emerging Applications
The development and utilization of water-based resins are gaining significant momentum, presenting substantial growth opportunities. Resin manufacturers are continually exploring innovative applications for these environmentally friendly resins. Notable uses include fireproof coatings, building protection materials, sealants, underwater paints, and flexible coatings for walls and floors, as well as automotive applications. Additionally, the demand for water-based adhesives and sealants is rising in various industries such as automotive, bookbinding, footwear, foam fabrication, and rubber-to-metal bonding. The automotive sector, in particular, is poised for robust growth, further enhancing the market for water-based resins in adhesive and coating applications.
According to the Organisation Internationale des Constructeurs d'Automobiles (OICA), global vehicle production reached 85.02 million units in 2022, marking a significant 6% increase compared to 2021. This surge in vehicle production is expected to drive the demand for water-based resins in automotive applications.
Moreover, the flexographic printing and packaging industries are recognizing the potential of water-based inks. These inks are increasingly used for printing on folding cartons, plastic grocery bags, department store bags, multi-wall bags, corrugated materials, and envelopes. This trend is anticipated to propel the water-based resins market.
Environmental and health regulations are prompting a shift towards eco-friendly products within the industry. Consequently, water-based resin manufacturers are expected to make substantial investments in research and development. This trend is underscored by the efforts of major players such as Dow, BASF SE, The Lubrizol Corporation, and Allnex GMBH.
These companies are introducing various water-based resins with enhanced properties aimed at reducing reliance on traditional solvent-based resins. In summary, the increasing focus on R&D, coupled with the discovery of new applications and a growing preference for environmentally sustainable products, is driving the expansion of the water-based resins market.
Challenges: Growing Use of other Environmentally-friendly Technologies
Governments worldwide are increasingly prioritizing the reduction of volatile organic compound (VOC) emissions, leading to a decline in the use of solvent-based technologies. This shift is driving a greater focus on environmentally friendly alternatives, such as water-based resins. However, the production of water-based resins can be more expensive, prompting the exploration of other eco-friendly options like high-solid coatings, powder coatings, and radiation-cured coatings.
These emerging technologies are challenging the growth of water-based resins in coating applications. Additionally, in various other applications, alternative technologies such as hot-melt adhesives, ultraviolet (UV) and electron beam (EB) adhesive technology, hybrid solutions, and low-VOC solvents are competing with water-based options. This competitive landscape compels manufacturers to invest heavily in research and development to create cost-effective alternatives to solvent-based resins.
Despite the push toward environmentally friendly solutions, manufacturers face several challenges. These include the high capital costs associated with transitioning to water-based technology, scalability of production, and market acceptance of new products. Consequently, R&D facilities of leading companies are focusing on developing innovative alternatives to solvent-based resins to meet both regulatory requirements and market demands.
Acrylic Segment is Projected to be Larger Segment of Water-based Resins
The water-based resins market is categorized into various types including acrylic, epoxy, alkyd, polyurethane, vinyl, polyester, and others. Among these, acrylic resins are anticipated to dominate during the forecast period. This dominance is attributed to the high demand for water-based acrylic resins, which offer superior chemical and physical resistance, thereby extending the lifespan of the materials they coat.
Particularly in the paints and coatings sector, water-based acrylic resins are increasingly favored, primarily in architectural coatings, due to their enhanced durability. Moreover, the stringent environmental regulations concerning volatile organic compound (VOC) emissions are expected to accelerate the shift from solvent-based to water-based acrylic resins in the paints and coatings industry.
The water-based resins market boasts a versatile array of applications, with its primary sectors encompassing paints & coatings, adhesives & sealants, inks, and various other applications. Notably, within the domain of paints & coatings, there has been a discernible surge in demand, particularly in developing economies. This upswing can be attributed to the rapid expansion witnessed in the building & construction industry. Moreover, a significant driving force behind the pervasive adoption of water-based resins across all application domains is the growing imperative for environmentally conscious solutions, characterized by low solvent content.
Manufacturers and consumers alike are increasingly cognizant of the detrimental effects associated with volatile organic compound (VOC) emissions, thereby prompting a notable shift away from traditional solvent-based formulations towards water-based alternatives. This shift is particularly pronounced in the realm of paints & coatings, where the environmental benefits and regulatory compliance offered by water-based resins have positioned them as the preferred choice. Consequently, paints & coatings emerge as the foremost application segment within the expansive landscape of water-based resins, propelled by the imperative for sustainability and the quest for eco-friendly solutions in modern industrial practices.
Highest Growth in Asia Pacific Region
The Asia Pacific region's water-based resins market is experiencing significant growth, primarily propelled by heightened demand within the paints and coatings sector. This surge in demand is not only limited to paints and coatings but extends to other key applications like adhesives, sealants, and inks as well. The region's burgeoning infrastructural development projects are a major catalyst for this demand surge, particularly in the paints and coatings segment. With increased urbanization and industrialization, there's a growing need for construction and renovation activities, further boosting the requirement for paints and coatings.
Consequently, the demand for water-based resins, favored for their eco-friendly attributes and low volatile organic compound (VOC) content, is on the rise. This trend is expected to persist as the region continues its trajectory of infrastructural expansion and economic development, underpinning the sustained growth of the water-based resins market in the Asia Pacific.
Source: Markets and Markets (M&M)