Polyols And Polyurethane Market Analysis & Forecast: 2025-2032

The polyols and polyurethane market size is expected to reach USD 27.7 Bn by 2032, from USD 18.42 Bn in 2025, exhibiting a CAGR of 6% during the forecast period.

Key Takeaways

• Based on Type, the Polyether Polyols segment is dominating the market, accounting for around 59.9% of the market share, owing to its versatile features.
• Based on Application, the Flexible Foams segment is expected to dominate the market in 2025, owing to an increase in home furnishings and interior décor.
• Based on the Region, the Asia Pacific region is leading the market, holding around 35.2% of the market revenue, owing to a rapid urbanization in countries like India and China.

Market Overview

The polyols and polyurethane market is an emerging market, which is projected to grow in the coming years. The market is driven by various factors such as an increase in the demand for efficient building materials, a rise in infrastructural development, etc. Polyols and Polyurethanes find their applications largely in the construction, automotive, furniture, and packaging industries.

Current Events and Their Impact

Uncover macros and micros vetted on 75+ parameters: Get instant access to report

End User Feedback and Unmet Needs in Polyols and Polyurethane Market

End-Use Feedback

1. Performance Expectations
   • Users often praise polyurethanes for their durability, flexibility, and insulation properties.
   • Polyols contribute to excellent foam quality and mechanical strength.
   • There is high demand for materials that maintain performance under extreme conditions (temperature, humidity).
2. Sustainability Concerns
   • End users increasingly prefer bio-based and recyclable polyols and polyurethanes.
   • Demand for products with lower VOC emissions and reduced environmental impact is growing.
3. Cost Efficiency
   • Many industries require cost-effective solutions without compromising quality.
   • End users often balance performance with affordability, especially in construction and automotive sectors.
4. Processing and Handling
   • Ease of processing and compatibility with existing manufacturing equipment is important.
   • Consistency in raw material quality impacts end product reliability.

Unmet Needs

1. Enhanced Sustainability
   • Fully recyclable or biodegradable polyurethane materials remain limited.
   • More scalable bio-based polyols with consistent performance are needed.
2. Improved Thermal and Chemical Resistance
   • Some applications require better high-temperature stability and chemical resistance.
   • Innovation in specialty polyols for demanding environments is still lacking.
3. Lightweight Yet Durable Materials
   • Industries like automotive and aerospace seek lighter materials that don’t sacrifice strength or durability.
   • Ultra-lightweight polyurethanes with superior mechanical properties are in demand.

Segmental Analysis

To learn more about this report, Request sample copy

Polyols and Polyurethanes Market Insights, by Type: The Excellent Versatility is Driving the Polyether Polyols Segment’s Growth.

The Polyether Polyols segment holds the largest share of 59.9% in the market by type. The growth of this segment is attributed to the excellent versatility and widespread applications. The polyether polyols mostly find their applications in the creation of polyurethane foam. There are several benefits of using these polyols, including lower volatility, hydrolytic stability. These advantages make it a popular choice in most applications. They are not only cost-effective but are also easy to handle and are available in different molecular forms and weights. For instance, in August 2024, Cargill rolled out 3 new 100% bio-based polyols at the FEICA 2024 conference, held in the Netherlands. It is a next-gen polyol that helps in eliminating the need for isocyanates. It is a bio-based polyol that serves as an alternative to petroleum-based products. 

Polyols and Polyurethanes Market Insights, by Application: Increase in Home Furnishings is Driving the Flexible Foam Segment’s Growth. 

Based on Application, the Flexible Foam segment is expected to dominate the market in 2025. The flexible foams are used widely in products that are designed to provide comfort, such as furnitures, cushions, mattresses, seatings, carpets, etc. The segment is primarily driven by the rise in home furnishings, an increase in demand for interior comfort, and the increase in disposable income. This segment finds its application in the automotive industry, too, with a high number of manufacturers opting for flexible foams that are lightweight and can help in reducing the weight of the vehicle while providing utmost comfort to the passengers. For instance, in 2024, BASF launched a new generation of flexible polyurethane foam at the UTECH. It is designed for thermoplastic recycling at the end of its life cycle. It can be recycled and used in new foams as a raw material. It also supports the circular economy in the automotive, footwear, etc. industries.

Regional Analysis

To learn more about this report, Request sample copy

Asia Pacific Polyols and Polyurethane Market Trends

Asia Pacific accounted for a market share of 35.2% in 2025. The polyols and polyurethane market in the Asia Pacific region is propelled by the significant growth of the large end-use industries, such as construction, automotive, furniture and interior, electronics, and appliances, and packaging.  It is the largest market led by a strong demand from two countries- China and India. While China is leading the market due to a large manufacturing base and rise in domestic consumption in beddings, furniture’s, and the automotive sector. For instance, in 2024, at the PU China, Changhua Chemical showcased new products in the polyether segment. Some of the products are bio-based polyols derived from castor oil, carbon dioxide-based polyols, etc. India also follows closely, the growth here is boosted by a rapid urbanization, rise in disposable income, and the expansion in the furniture industry.

North America Polyols and Polyurethane Market Trends

North America accounted for 26.8% of the market share in the global polyols and polyurethane market in 2025. It is the second largest market, with countries like United States and Canada leading the market. The high demand for furniture’s, automotives, and beddings, strong consumer spending, technical advancements is driving the U.S. polyols and Polyurethanes market. Meanwhile, in Canada, increase in residential constructions, increase in energy-efficient and green buildings is primarily driving the market. The key factors that contribute significantly include innovations in bio-based foams, sustainable regulations, etc. For instance, in March 2024, Huntsman Building Solutions launched its new Icynene Series spray polyurethane foam insulation product line at the SprayFoam 2024 Convention & Expo in Las Vegas.

United States Polyols and Polyurethane Market Trends

Manufacturers are increasingly adopting bio-based polyols derived from renewable resources like vegetable oils and sugars. These alternatives reduce reliance on petroleum-based feedstocks and lower the carbon footprint of end products. For instance, companies like Dow and BASF are advancing the development of bio-based polyols to meet growing environmental concern.

Polyols and Polyurethane Market Trends

Shift towards sustainable and eco-friendly products

The growing demand for sustainable and eco-friendly products among both manufacturers and consumers has significantly impacted the polyols and polyurethane market in recent years. As one of the largest and most widely used types of plastics, polyurethane faces increased scrutiny over its non-biodegradable nature and potential health impacts. Many major brands and retailers have pledged to eliminate or reduce conventional plastic use to meet societal expectations of greater corporate environmental stewardship and sustainability. This has driven strong interest within the polyols and polyurethane industries to develop new bio-based and recyclable product solutions.

This shift signals that consumer brands are increasingly willing to pay a slight premium for the sustainability claims of bio-based materials. In the U.S., the automotive industry's voluntary pledge to increase bio-based plastics content sparked early commercialization of bio-polyol cocktails able to meet stringent specifications for seating, instrument panels, and headliners (according to the U.S. Department of Agriculture (USDA) bio-based product portal). As economies of scale are realized and production costs decline, bio-based alternatives are expected to gain broader market acceptance across construction, consumer goods, electronics, and others. Overall, the trend towards sustainable materials is undoubtedly reshaping innovation priorities, production methods, and applications within the polyols and polyurethane sectors.

Innovation of reactive polyurethanes

The innovation of reactive polyurethanes is having a significant impact on the polyols and polyurethane market. Reactive polyurethanes are more sustainable and environment-friendly compared to traditional polyurethanes, as they can be reused and recycled more easily. They are manufactured by reacting polyols such as polyether polyols or polyester polyols with diisocyanates or polyisocyanates to form polymers that have isocyanate groups attached to the backbone. These reactive groups allow the polyurethane to repolymerize or recycle more effectively.

The ability to reuse and recycle reactive polyurethanes is leading to greater acceptance of these materials from manufacturers as well as customers. It meets the growing demand for sustainable and eco-friendly products.

Polyols and Polyurethane Market Drivers

Rise in construction activities

The rise in construction activities across the globe is one of the key factors fueling the growth of the global polyols and polyurethane market. With increasing urbanization and infrastructure development projects, the demand for buildings and construction has seen a significant upsurge over the past few years. Polyols and polyurethanes are widely used in the construction industry for applications like insulation, glazing, roofing, and sealing, among others.

Polyurethane insulation provides highly efficient thermal insulation and helps reduce energy costs. It has low conductivity and allows builders to use thinner insulation layers. This has increased the preference for polyurethane over traditional insulation materials. Furthermore, polyurethane is used in fiberglass-reinforced plastic panels, which are gaining prominence in the construction of walls, floors, and roofs, due to their lightweight and durable properties. They provide an aesthetically pleasing look and can be molded into intricate designs. The use of such composite polyurethane panels is expected to rise exponentially in the coming years. For instance, according to World Bank data, the global construction output is projected to increase by 85% between 2016 and 2030, with major contributions expected from China, the U.S., and India.

Demand for insulation and renewable energy applications

The demand for insulation and renewable energy applications has significantly contributed to the growth of the polyols and polyurethane market in recent years. Polyurethane is widely used for insulation in construction as it provides effective thermal insulation and durable walls and roofs that help in reducing the energy costs of buildings. With growing awareness and concerns around climate change and energy efficiency, many countries have implemented stricter building codes and regulations that mandate higher insulation standards in buildings. According to the International Energy Agency, the buildings sector accounts for nearly 40% of global energy use and carbon emissions. Thus, tightening of energy efficiency norms is driving increased demand for better insulating polyurethane products from the construction industry.

Another major factor is the rising installation of renewable energy sources like wind turbines and solar photovoltaic (PV) panels. Polyurethane is a key material used in the manufacturing of wind turbine blades owing to its advantages, like corrosion resistance, lightweight, and high strength-to-weight ratio. For instance, according to the International Energy Agency (IEA), the buildings and construction sector accounted for 36% of final energy use and 39% of energy and process-related carbon dioxide (CO2) emissions in 2018.

Polyols and Polyurethane Market Opportunities

Development of bio-based and green polyols

The development of green and bio polyols presents a major opportunity for growth in the polyols and polyurethane market. Bio-based polyols are manufactured from renewable plant-based resources such as vegetable oils, carbohydrates, and natural fats instead of petroleum-based chemicals. They offer advantages over traditional polyols as they have lower toxicity, reduce dependency on fossil fuels, and generate fewer greenhouse gas emissions during production.

With rising environmental concerns and stricter regulations to curb carbon emissions, the consumer demand for sustainable and eco-friendly products is increasing exponentially. For instance, according to a 2020 report by the United Nations Environment Programme, over 90% of global consumers say that sustainability is an important factor when making purchase decisions. Polyurethane manufacturers have recognized this surging consumer preference for green alternatives and have started extensively investing in R&D to develop more bio-based product lines. For example, major players like BASF SE, Dow Chemical, and Covestro have dedicated bio-polyol facilities and product ranges that use feedstock such as palm oil, rapeseed oil, and crude glycerin.

The advantages of bio-based polyols directly impact the growth trajectory of the overall polyols and polyurethane market. As bio-based varieties continue to substitute petroleum-based polyols in various end-use industries like construction, automotive, furniture, and packaging, they will drive higher market revenue and volumes over the next few years. Additionally, supportive government policies like mandates for minimum bio-content in products and subsidies for sustainable innovation will encourage polyurethane producers to rapidly scale up their green manufacturing capacities and portfolios. As per a 2021 report by the European Polyurethanes Association, the European Union’s bio-economy strategy aims to increase domestic bio-based chemical production threefold from 2020 levels by 2030. Such initiatives clearly indicate strong future growth prospects for bio-polyols in the industry.

Advancements in nanotechnology

Advancements in nanotechnology have presented both opportunities and challenges for the polyols and polyurethane market. On one hand, nanotechnology has enabled the development of novel forms of polyurethanes like hydrophobic polyurethanes, self-cleaning polyurethanes, etc. that can open up new applications. However, at the same time, it is also restricting the growth of conventional polyols and polyurethane products.

Nanotechnology has led to the development of alternative materials that can substitute polyurethane in certain applications, like coatings, adhesives, and sealants. For example, the introduction of graphene-based coatings provides properties like anti-corrosion and barrier abilities that are superior to polyurethane coatings. These graphene coatings have lower permeability for water, oxygen, and other gases. For instance, according to the National Graphene Association, ships coated with graphene-based coatings were able to save 1,000 gallons of fuel in 2020. Similarly, in adhesives, nanocellulose and other nanocomposites are emerging as strong substitutes to polyurethane adhesives due to advantages such as higher strength, lighter weight, and sustainability.

Market Report Scope

Key Developments

• In May 2025, Rymbal launched FluidX, an innovative polyurethane material that is fully recyclable using both physical and chemical recycling processes. FluidX utilizes a completely water-blown system, resulting in a reduced carbon footprint and minimal environmental impact. Free of any harmful chemicals, this product is distinguished by its ultra-lightweight design, with a density ranging from 260 to 280 kg/m³, making it perfect for environmentally conscious manufacturing.
• In May 2025, South Korea’s Dongsung Chemical opened a new 81,000 m² polyurethane production plant in Karawang, Indonesia. The facility will produce 67,000 tons of PU materials annually—including prepolymers, polyester polyols, and polyurethane resins—tripling the company’s previous output across China, Korea, and Vietnam, marking a significant expansion of its global footprint.
• In September 2024, BASF and Future Foam announced the first commercial flexible foam for the bedding industry. It is made with 100% domestically produced Biomass Balance Lupranate® T 80 toluene diisocyanate.
• In October 2022, BASF SE collaborated with Remondis Electro recycling, RAMPF Eco Solutions, and machine and systems manufacturer, KraussMaffei. The project’s objective is to create an industrial method that produces high-quality recycled polyols on par with those made from main fossil raw sources. BASF SE, headquartered in Ludwigshafen, Germany, is a leading chemical company with a global presence.
• In October 2021, Huntsman Corporation, opened a new 22,000 tons TEROL aromatic polyester polyols factory at its systems house in Kuan Yin, Taiwan
• In August 2021, Huntsman Corporation expanded its production of specialty amines and polyurethane catalysts in Petfurdo, Hungary.

Analyst Viewpoint

• The polyols and polyurethane market is expected to witness steady growth in the coming years. The construction industry will be a key driver of demand given the wide range of insulation and sealant applications for polyurethane. Moreover, increasing building & construction activities across developing nations in Asia Pacific and Latin America are likely to boost the polyurethane foam consumption. On the other hand, stringent environmental regulations regarding the use of petroleum-based polyols may moderately restrain market expansion to some extent over the forecast period.
• Asia Pacific, led by China, India, and other ASEAN countries, holds immense growth opportunities owing to the rapid industrialization and urbanization rates coupled with rising disposable income in the region. Additionally, many manufacturing companies are shifting their polyurethane production plants to Asia Pacific because of lower labor and material costs. This is anticipated to make Asia Pacific the most lucrative as well as fastest-growing regional market.
• Polyols producers are investing heavily in Research & Development (R&D) to develop bio-based and eco-friendly product variants using castor oil, vegetable oil, and other renewable resources. This will help companies cater to the increasing customer demand for sustainable solutions and also comply with the tightening environmental mandates. The thriving automotive and footwear industries also open new vistas for polyurethane applications.

Market Segmentation

• By Type
  • Polyether Polyols
  • Polyester Polyols
• By Application
  • Flexible Foam
  • Rigid Foam
  • Coatings
  • Adhesives & Sealants
  • Elastomers
• By Region
  • North America
  • Latin America
  • Europe
  • Asia Pacific
  • Middle East & Africa
• Key Player Insights
  • BASF SE
  • Bayer Material Science AG
  • Chemtura Corporation
  • COIM
  • Dow Chemical Company
  • E.I. du Pont de Nemours & Company (DuPont)
  • Hebei Cangzhou Dahua Group Corporation Ltd.
  • Huntsman Corporation
  • Kumho Mitsui Chemicals Incorporation
  • Mitsui Chemicals Inc.

Sources

Primary Research Interviews

• In-depth interviews with manufacturers, suppliers, distributors, and industry experts in the polyols and polyurethane sector.

Databases

• Chemical Economics Handbook
• Statista
• UN Comtrade Database
• World Bank Data
• IMF Economic Outlook Database
• Global Trade Information Services (GTIS)

Magazines

• ICIS Chemical Business
• Chemical Week
• Plastics News
• PU Magazine

Journals

• Journal of Applied Polymer Science
• Polymer-Plastics Technology and Materials
• Industrial & Engineering Chemistry Research
• Journal of Cellular Plastics

Newspapers

• The Economic Times (Business Section)
• Business Standard
• Financial Times (Chemicals & Commodities)
• The Wall Street Journal

Associations

• American Chemistry Council (ACC)
• European Diisocyanate & Polyol Producers Association (ISOPA)
• Center for the Polyurethanes Industry (CPI)
• Polyurethane Manufacturers Association (PMA)

Public Domain Sources

• Company annual reports and investor presentations
• Government trade and industry portals (e.g., U.S. EPA, REACH, BIS India)
• Market and industry white papers
• Patent databases (e.g., Google Patents, WIPO)
• Academic theses and open-access repositories

*Definition: Polyurethane refers to a class of polymers composed of organic units joined by carbamate (urethane) links. It is produced from a wide range of starting materials, leading to various chemical structures, resulting in different forms such as rigid and flexible foams, coatings, adhesives, and electrical potting compounds. Polyurethane is commonly used in the production of flexible and rigid foams, elastomers, coatings, adhesives, and electrical insulation. It is a versatile material with applications in a wide range of industries, including furniture, clothing, packaging, and construction.