Natural Oil Polyols Market

Natural Oil Polyols Market Size

The global natural oil polyols market was valued at USD 2.5 billion in 2025. The market is expected to grow from USD 2.7 billion in 2026 to USD 6 billion in 2035, at a CAGR of 9.2% according to latest report published by Global Market Insights Inc.

• Increasing environmental regulations, consumer preference for eco-friendly products, and growing adoption across automotive, construction, furniture, and industrial sectors are the primary growth drivers. Manufacturers are innovating bio-based formulations that enhance mechanical, thermal, and chemical properties, supporting high-performance applications while reducing carbon footprints.
  
• Polyester polyols dominated the market in 2025 with a 54% share due to their superior chemical resistance and mechanical strength. They are projected to grow at a CAGR of 8.1%, reaching USD 2.9 billion by 2035. Polyether polyols, offering excellent flexibility and moisture resistance, are expected to grow faster at a CAGR of 10.3%, driven by demand in flexible foams, coatings, adhesives, and elastomers.
  
• Soybean oil-based polyols led the market in 2025 with a 35.7% share and are projected to grow at 5.8% CAGR. Castor oil-based polyols will reach USD 1.5 billion at an 8.3% CAGR, while emerging feedstocks like canola, sunflower, and alternative oils are expanding rapidly, reflecting innovation and sustainability trends.
  
• Flexible PU foams dominated in 2025 with 31.2% share and are expected to reach USD 1.5 billion by 2035 at 7.1% CAGR, supported by furniture, bedding, and automotive applications. Rigid PU foams will reach USD 1.7 billion at 9.5% CAGR, driven by insulation and energy-efficient construction demand.
  
• North America leads with USD 821.8 million revenue in 2025, supported by strong R&D and sustainability adoption. Europe holds 30.9% share due to strict environmental policies. Asia Pacific is the fastest-growing region at 9.7% CAGR, fueled by industrialization and construction growth. Latin America and MEA are emerging markets, benefiting from renewable feedstock availability and green initiatives.
  

Natural Oil Polyols Market Trends

• Increase in demand for planet-friendly products has produced a dramatic increase in the use of bio-polyols. This trend has resulted from the enactment of numerous federal environmental statutes and regulations worldwide and the growing consumer desire for socially responsible products. Many industries including but not limited to the automotive, construction and furniture industries have begun using naturally based polyols in the manufacture of PU foams, coatings and adhesive products to enhance sustainability, lower their carbon footprint and encourage innovation in procurement and production processes.
  
• The manufacturers have now developed a wide range of bio-polyols with unique advanced characteristics and benefits. The new development includes bio-based polyols for premium coating products, adhesive products, elastomer products and flexible or rigid foam products that pop the industry's development of eco-friendly, high-performance solutions into the next decade or greater. With the development of the new natural bio-based polyols, companies are now able to diversify their product portfolio to include these new natural bio-based polyols and open up their business to premium product markets.
  

Natural Oil Polyols Market Analysis

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Based on type, the market is segmented into polyester polyols, and polyether polyols. Polyester Polyols dominated the market with an approximate market share of 54% in 2025 and is expected to grow with a CAGR of 8.1% by 2035.

• Polyol are widely used in the production of both flexible and rigid PU foam products, as well as various other applications such as coating and adhesive formulations, elastomers, etc. As such, it is anticipated that demand will reach USD 2.9 billion by the end of 2035, with an expected CAGR of 8.1%.
  
• The polyether polyols have also shown a CAGR of 10.3% per annum between 2025 and 2035. The growth in the market can be attributed to various factors including increasing consumer consciousness about sustainable high-performance materials in the automotive sector and elsewhere, as well as innovations in biobased formulation technology, and advances in customizing specific functions within polyol formulations which together are driving total revenue growth to USD 6 billion by 2035.
  

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Based on source, the natural oil polyols market is segmented into soybean oil-based polyols, castor oil-based polyols, palm oil-based polyols, canola/rapeseed oil-based, sunflower oil-based polyols, others. Soybean oil-based polyols held the largest market share of 35.7% in 2025 and is expected to grow at a CAGR of 5.8% during 2025-2034.

• The natural polyols market is primarily segmented by feedstock, including soybean, castor, palm, canola/rapeseed, sunflower oils, and others. Soybean oil-based polyols dominate the market, valued for cost-effectiveness and availability, projected to reach USD 1.5 billion by 2035 at a 5.8% CAGR. Castor oil-based polyols, known for excellent reactivity and mechanical properties, are expected to grow to USD 1.5 billion at 8.3% CAGR.
  
• Palm oil-based polyols, which are utilized in the manufacturing process of coatings and foams, will grow to approximately USD 722 million at a CAGR of about 5.7%. Emerging feedstocks such as canola/rapeseed oil and sunflower oils will show rapid growth rates as a result of their availability and their sustainability attributes, respectively, with projected CAGRS of 10.1% and 7.2%.
  
• The "Others" category contains new innovative biobased oils which is currently the fastest growing segment at 22.1% CAGR as a result of innovation occurring within alternative feedstock sources. Thus, increased demand for environmentally safe, high-performance materials will drive the total segment to approximately USD 6 billion by 2035.
  

Based on application, the natural oil polyols market is segmented into flexible PU foams, rigid PU foams, coatings, adhesives, sealants, elastomers, and others. Flexible PU foams segment dominated the market with an approximate market share of 31.2% in 2025 and is expected to grow with the CAGR of 7.1% by 2035.

• The polyol market is comprised of a plethora of application segments, each of which helps to drive the market. These segments are flexible and rigid polyurethane foam, elastomer sealants, adhesives, coatings and others. The flexible PU foam market is experiencing strong growth and is expected to reach 1.5 billion by the year 2035, growing at a CAGR of 7.1%. This type of foam, which can be used for mattresses, cushion seats in vehicles, has grown in popularity due to its properties of softness, resilience and environment-friendliness.
  
• Rigid PU foam accounts for a significant portion of consumption in construction as insulation panels and structural components. Demand for this segment is also expected to grow rapidly, reaching 1.7 billion at a 9.5% CAGR through 2035. The demand for rigid PU foam is being driven largely by the continuing tightening of energy efficiency standards for buildings and continued increasing demand for thermal insulation products.
  
• Coatings and adhesives constitute two very important sub-markets for polyol manufacturers. Coatings are used primarily in applications that require protective or decorative properties and adhesives are used mainly for their bonding capabilities as required by automotive, construction and industrial sectors. The coatings market is projected to be valued at 0.9 billion at a 9% CAGR, while adhesives will be valued at approximately 0.7 billion at an expected CAGR of 10.2%.
  

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North America natural oil polyols market leads the industry with revenue of USD 821.8 million in 2025 and is anticipated to show lucrative growth over the forecast period.

• High rates of adoption of sustainable materials are leading North America to have the highest share of the market. The U.S. and Canada are driving the demand for bio-based polyols used in the production of flexible and rigid PU foams, coatings, adhesives, sealing and other related products due to government support for green chemistry, plus a vibrant research and development organization, to deliver sustainable and eco-friendly alternatives to the marketplace.
  

The Europe natural oil polyols industry is growing rapidly on the global level with a market share of 30.9% in 2025.

• Europe has emerged as a key region for natural polyols in PU foams, coatings, adhesives, etc., with Germany, France, and the U.K. being the leaders. The demand for these products is driven primarily by regulations regarding the environment, and the strong initiatives to promote sustainability within these countries.
  
• The EU supports the production of bio-based chemicals by way of policies and financial assistance through subsidies. Furthermore, technological advancements in the area of feedstock sourcing and processing technology have been leading to increased product performance.
  

The Asia Pacific natural oil polyols market is anticipated to grow at a CAGR of 9.7% during the analysis timeframe.

• The APAC Region has the highest rate of growth for natural polyols, driven mainly from China, India and Japan. Increased rates of urbanization, construction activity and the expansion of the transportation, automotive, and furniture industries have driven up demand for natural polyols.
  
• The increasing rates of industrialization, coupled with government initiatives supporting initiatives for renewable materials, and the competitiveness of low-cost manufacturing in some regions, are contributing to growing consumer acceptance of natural polyols in the marketplace.
  

Latin America natural oil polyols market accounted for 6% market share in 2025 and is anticipated to show highest growth over the forecast period.

• The region of Latin America, with its prominent players Brazil and Mexico, is seeing solid growth as a result of renewable feedstocks, specifically in the construction and furniture industries. The use of flexible and rigid PU foam and coatings is being driven up by the industries, with the greater interest from consumers regarding environmentally friendly products.
  
• In addition, support from governments to promote bio-based chemical products is expected to help facilitate the growth of these industries. There is, however, a limitation on the expansion of these markets due to difficulties within the supply chain and limitations on infrastructure.
  

Middle East & Africa natural oil polyols accounted for 3.9% market share in 2025 and is anticipated to show lucrative growth over the forecast period.

• In the MEA, there is moderate growth so far due to the markets for the construction, automotive, and industrial sectors. There is increased interest in using bio-based polyols within the developing areas of the MEA, which is primarily due to sustainability goals and regulations imposed by the local governments. The advantages for this region include both feedstock supply and government support for environmentally friendly initiatives.
  

Natural Oil Polyols Market Share

The top 5 companies in natural oil polyols industry include Cargill Inc., BASF SE, Covestro AG, Croda International PLC, and Oléon-Novance (Avril).These are prominent companies operating in their respective regions covering approximately 54.6% of the market share in 2025. These companies hold strong positions due to their extensive experience in natural oil polyols market. Their diverse product portfolios, backed by robust production capabilities and distribution networks, enable them to meet the rising demand across various regions.

• Cargill Inc. is a global agribusiness and bio industrial leader supplying soy based natural polyols for polyurethane foams, coatings, adhesives, and elastomers. Its integrated agricultural supply chains, sustainability certifications, and strong research capabilities enable scalable production of renewable polyols, supporting automotive, construction, furniture, and industrial applications worldwide with consistent global demand.
  
• BASF SE is a leading chemical company offering castor based natural polyols under Lupranol balance for polyurethane applications. The company provides drop in solutions for flexible foams, emphasizing performance, sustainability, and regulatory compliance. Global manufacturing scale, innovation leadership, and circular economic strategies strengthen BASF’s competitive position in natural polyols markets.
  
• Covestro AG is a global materials manufacturer developing partly bio-based polyols and polyurethane dispersions for coatings, textiles, and industrial uses. Focused on climate neutrality and circular economy principles, Covestro leverages advanced polymer science, digitalization, and global production capabilities to expand sustainable polyols adoption across automotive, construction, and consumer markets.
  
• Croda International PLC is a specialty chemicals company focused on renewable, naturally derived ingredients and oleochemicals. It supports natural polyols value chains through sustainable raw materials, innovation, and biotechnology. Serving polymer, coatings, and industrial markets globally, Croda emphasizes high performance solutions, responsible sourcing, and strong environmental, social, and governance commitments.
  
• Oléon-Novance (Avril) is a producer of vegetable oil based oleochemicals and bio intermediates. The company supplies renewable feedstocks supporting natural polyols, polymers, and industrial materials. Strong European manufacturing, sustainability expertise, and agricultural integration enable Oléon Novance to advance low carbon polyurethane solutions for global markets.     
  

Natural Oil Polyols Market Companies

Major players operating in the natural oil polyols industry include:

• BASF SE
• Biobased Technologies LLC
• Cargill, Incorporated
• Covestro AG
• Croda International Plc
• Econic Technologies
• Emery Oleochemicals
• Global Bio-chem Technology Group
• Oleon Novance (arvil)
• The Dow Chemical Company
  

Natural Oil Polyols Industry News

• In 2025, Emery Oleochemicals achieved mechanical completion of its new renewable and recyclable polyol manufacturing facility in Cincinnati, Ohio. This strategic investment significantly expands Emery’s capacity to produce bio-based polyols derived from renewable raw materials. The facility supports applications across automotive, furniture, and appliance industries, reinforcing Emery’s commitment to sustainability and circular economy principles.
  
• In 2025, Econic Technologies, in partnership with Changhua Chemical, advanced commercialization of CO?-based polyol technology by breaking ground on an 80,000-ton renewable carbon polyol plant in China. Utilizing Econic’s patented catalyst technology, the facility converts waste carbon dioxide into high-performance polyols for polyurethane foams, coatings, and elastomers.
  

This natural oil polyols market research report includes in-depth coverage of the industry, with estimates & forecasts in terms of revenue (USD billion) and volume (Kilo Tons) from 2025 to 2035, for the following segments:

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Market, By Type

• Polyester Polyols
• Polyether Polyols

Market, By Source

• Soybean Oil-Based
• Castor Oil-Based
• Palm Oil-Based
• Canola/Rapeseed Oil-Based
• Sunflower Oil-Based
• Others

Market, By Application

• Flexible PU Foams
• Rigid PU Foams
• Coatings
• Adhesives
• Sealants
• Elastomers
• Others

The above information is provided for the following regions and countries:

• North America
  • U.S.
  • Canada 
• Europe
  • Germany
  • UK
  • France
  • Spain
  • Italy
  • Rest of Europe 
• Asia Pacific
  • China
  • India
  • Japan
  • Australia
  • South Korea
  • Rest of Asia Pacific 
• Latin America
  • Brazil
  • Mexico
  • Argentina
  • Rest of Latin America 
• Middle East and Africa
  • Saudi Arabia
  • South Africa
  • UAE
  • Rest of Middle East and Africa