LIGNIN MARKET ANALYSIS

Global lignin market was accounted for US$ 941.1 Million in 2022, and is expected to reach at US$ 1178.3 Million by 2030. The market is expected to grow at a CAGR of greater than 2.8% during the forecast period 2023-2030

Global Lignin Market: Drivers

• Increasing Supply of Raw Materials: The market's potential market is expected to grow by expansion by increased access to raw materials and simplicity of manufacturing of raw materials. A range of extraction methods including sulfite pulping, Kraft pulping, organosolv pulping, soda pulping, and hydrolysis procedures can be used to remove lignin. All of these methods have a significant influence on market expansion. The agriculture sector's development and growth directly affect the rate of market expansion. Rising demand for concrete additives in construction projects and expanding usage of lignin as an animal feed component are expected to drive the market growth. For instance, in May 2023, Hosokawa Alpine Group, a Germany-based machine and plant manufacturer, collaborated with Lignopure GmbH, a Germany-based startup Lignopure GmbH , to boost the valorisation of the natural raw material lignin for industrial use.
• Growing Demand for Paints and Coatings: Lignin is an ideal substitute for crude-oil-derived naphtha, and this drives the market growth. Lignin is a primary source of aromatic substrate, and aromatic compounds are vital for the production of paints and coatings, and this is expected to drive the market growth. For instance, in 2022, Asian Paints, a India-based paint & coating producer,   announced its plans to invest USD 128 million to expand the installed capacity at its facility situated at Ankleshwar in the state of Gujarat, India.

Global Lignin Market: Restraints

• Gap between R&D and Consumer Products Widening: Costs associated with R&D and pre-treatment for high-purity lignin are substantial. High-purity lignin is still used worldwide, at least in terms of volume. There has been ongoing research towards development of new products and lowering the price of already existing ones. Despite being the second most abundant chemical after cellulose, lignin's utilization is still limited due to its greater cost. Since the R&D process is expensive, there are fewer research efforts that makes it difficult for manufacturers to produce products at reasonable prices. Lignin and other waste products such as fresh proteins, unfermented sugars, and biomass components are used as rich fuel sources to generate electricity and heat. For instance, in 2021, according to Fisher International, Because of the high price of oil, phenol can range in price from $1100 to $2,000 per ton. The cost of phenolic resins can range from US$ 1100 per ton to US$ 2300 per ton, depending on the final resin's grade, purity, and intended use. The EC research claims that phenols extracted from lignin will provide 40% yield that would result in a raw material price of about US$ 800/ton alone for the lignin-based phenol. Lignin-based phenolic resins' current pricing is not made known to the general public. It is predicted that technological advancements might lower the cost of bio-based resins relative to phenolic resins.
• Global Lignin Market: Impact of Coronavirus (COVID-19) Pandemic: The market was negatively impacted by COVID-19 due to closure of the factories and plants as a result of the lockdown and limitations. Disruptions in the transportation and supply chains increased market's challenges. The sector experienced a backlash, as a result of the disruptions in the value chain that included job losses, delay in supply of raw materials, commerce, and transportation, as well as ambiguous customer demand. Manufacturers in the lignin industry are working to make up for their losses. Though growing demand for lignin as an organic ingredient and increased manufacturing of concrete additives are both encouraging signs for the Global Lignin market growth. Due to the rising prevalence of internet and e-commerce platforms, the market's future is also looking up.

Global Lignin Market: Market Opportunities

• Lightweight products increasing demand for carbon fiber: Growing demand for lightweight products from the aerospace industry is boosting demand for carbon fiber as it increases fuel efficiency. This is attributed to growing need for high performance and fuel-efficient aircraft. Increasing investment in the aircraft industry coupled with the growing adoption of durable and advanced materials for aircraft components is expected to serve major growth opportunities to the market.
• New market opportunity: Increasing use of naturally derived raw materials for the production of polymers is expected to offer new market opportunities. Lignin is used in the manufacturing of phenolic resins, BTX, vanillin, and phenol. Moreover, the expansion of the chemical industry coupled with t rising awareness regarding greenhouse gas emissions is further propelling the market growth of the lignin.

Global Lignin Market: Market Trends

• Increase in Investment: Increasing investment by key manufacturers for developing bio-based carbon products is a growing trend in the market. For instance, in July 2020, Stora Enso  which develops and produces solutions based on wood and biomass for a range of industries and applications worldwide invested US$ 10.8 million to build a pilot facility for developing bio-based carbon materials based on lignin. Wood-based carbon can be used as a crucial component in batteries that is typically used in consumer electronics, the automotive industry, and large-scale energy storage systems.

• Growing product innovation: Continuous product innovation by the key manufacturer is one of the major trends in the market. For instance, in April 2020, Stora Enso launched 'Lineo' bio-based lignin as a renewable replacement for oil-based glue. The newly launched product can be used in a range of applications where fossil-based materials are currently used such as in resins for plywood, oriented strand board (OSB), laminated veneer lumber (LVL), paper lamination, and insulation material.

Global Lignin Market:  Regional AnalysisThe market has been segmented into North America, Europe, Asia Pacific, Latin America, and Middle East & Africa.

Figure 1: Global Lignin Market, Revenue Share (%), By Region, 2022

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North America region dominated the global lignin market in 2022, accounting for 34.2% share in terms of value, followed by Europe and Asia Pacific, respectively.

Global Lignin Market: Segmentation

Among product, the market is segmented into lignosulfonates, kraft lignin, and other. Out of which, lignosulfonates segment dominated the global Lignin market in 2022, accounting for 91.3% share in terms of value, followed by kraft lignin and others segment respectively.

Figure 2: Global Lignin Market, Revenue Share (%), By Product, 2022

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Global Lignin Market: Recent Developments

• In March 2022, Latvijas Finieris, a global manufacturer of birch plywood products sold under the trade name of Riga Wood, started manufacturing of plywood by using bio-based glue. Stora Enso has been working with Latvijas Finieris a leading plywood and its products' manufacturer in Baltic States, to replace fossil-based phenols in the glue with Lineo, a bio-based lignin.
• In September 2021, The City of Thunder Bay in Northern Ontario, Canada, announced its plans to pave its roads with lignin, an experimental “green asphalt” that is a forestry byproduct from the pulp making process.
• In December 2021, Nippon Paper Industries Co., Ltd. is a Japanese paper manufacturing company and Stora Enso signed a partnership agreement to use trees to revolutionize the battery industry. The research concentrates on the replacement for lithium-ion and rare-metal batteries by lignin.
• In April 2023, Ahlstrom is a global leader in fiber-based materials, supplying innovative and sustainable solutions launched a new range of renewable and sustainable lignin based filtration for automotive application

Global Lignin Market: Key Companies

Borregaard LignoTech, Changzhou Shanfeng, Chemical Industry Co., Ltd., Domsjo Fabriker AB, Domtar Corporation, MeadWestvaco Corporation, Nippon Paper Industries Co., Ltd., Tembec, Inc., and UPM Kymmene Corporation

*Definition: Lignin, also referred as monolignols, is a class of complex polymer, and are widely used across industries such as construction, oil drilling, pulp & paper, and agriculture. These are a key ingredient that are used in the concrete admixtures, in order to enhance the shelf-life of the structure. These are also used in the production of carbon fibers and polyurethane foams.