Lignin Market Size, Share & Trends Analysis Report By Product (Lingo-sulfonates, Kraft Lignin, Organosolv Lignin, Others), By Application, By Region, And Segment Forecasts, 2023 - 2030

Report Overview

The global lignin market size was estimated at USD 1.04 billion in 2022 and is expected to grow a compound annual growth rate (CAGR) of 4.9% from 2023 to 2030. Increasing demand for lignin in animal feed and natural products is anticipated to drive the growth. The product is widely utilized in the production of macromolecules used in the development of bitumen, biofuels, and bio-refinery catalysts. This factor is likely to support market growth. COVID-19 had a negative impact on the market. This was because of the shutdown of the manufacturing facilities and plants owing to the lockdown and restrictions. Supply chain and transportation disruptions further created hindrances for the market. In other words, the industry faced a backlash owing to disruptions in the value chain, including workforce losses, raw material supply, trade and logistics, and uncertain consumer demand.

Manufacturers in the lignin market are making efforts to recover from the losses. However, the increase in production and demand for concrete additives and rising demand for lignin as an organic additive is a positive sign. The future as well of the market is on the brighter side owing to the increased proliferation of internet and e-commerce channels.

Lignin is manufactured by traditional processes of blending certain specific chemicals in order to create lignin, cellulose, and sweet liquor from wood and their products. This process involves the use of biomass pretreatment process from all plant sources, including hardwood, softwood, sawdust, low-grade wood chips and hemp. Extracting lignin from black liquor is one of the most convenient options to ensure that the capacity of the boiler does not hamper pulp production.

The market for lignin in North America is led by the U.S. owing to the presence of an extensively developed manufacturing industry and government initiatives. In the U.S., the demand for lingo-sulphonates accounted for the largest market share of 77.0% in 2022 and is expected to expand at a CAGR of 6.2% over the forecast period. In addition, the well-established market for the production of pulp and paper in North America is likely to further support the market.

Rising trend of using lignin as fuel for burning to use it in multiple applications like dispersants, binders, and adhesives is anticipated to augment the market growth in the forthcoming years. On a macro-level, factors such as increasing construction expenditure and rising demand for automobiles, electronics, and equipment manufacturing are expected to support the demand for lignin.

In Europe, the presence of a favorable regulatory framework for the use of lignin in a wide array of commercial applications is expected to be a key factor driving the market growth. Asia Pacific, on the other hand, is anticipated to witness the fastest growth over the forecast period as a result of rapid industrialization and rising demand for electronics and automobiles.

Numerous players operating in the market engage in the full service for lignin and its applications. For instance, Nippon Paper is engaged in pulp and paper manufacturing and derives lignin during the pulping process. In addition, the company is engaged in forest cultivation and industrial plantations.

Product Insights

Lingosulfonates emerged as the largest product segment in the market in 2022 and is estimated to maintain its dominance with a CAGR of 4.4% throughout the forecast period. Increased application of concrete mixtures in China, India, and the U.S. on account of improvements in the construction sector are anticipated to fuel demand for lignosulfonates, thereby supporting the growth of the product segment.

Kraft lignin demand is expected to be promoted as a raw material for the production of the aforementioned chemically derived products owing to its application as an intermediate to manufacture numerous compounds, including cement additives, biofuels, BTX, activated carbon, phenolic resins, carbon fibers, and vanillin. Increasing awareness towards reducing reliance on crude oil has forced chemical manufacturers engaged in manufacturing BTX, phenolic resins, and carbon fibers to deploy bio-based raw materials.

Increasing demand for manufacturing various potential products including activated carbon, carbon fiber, phenol derivatives, vanillin and phenolic resins is expected to boost organosolv lignin demand over the next seven years.  However, lack of industrial processes for manufacturing organosolv lignin is expected to hamper growth. Rising R&D related to the product in developing countries including India and China is expected to boost organosolv lignin demand over the forecast period.

Increasing demand for manufacturing various potential products, including activated carbon, carbon fiber, phenol derivatives, vanillin, and phenolic resins, is expected to fuel the demand for kraft lignin over the forecast period. Increase in the manufacturing of carbon fiber, activated carbon, vanillin, phenol derivatives, and phenolic resins is expected to boost the demand for organosolv lignin.

Application Insights

Based on applications, the dispersants segment led the market with the revenue share of 24.4% in 2022 and the segment is forecasted to expand at a CAGR of 3.3% from 2023 to 2030. Lignin-based dispersants are used as stabilizers and dispersants in concrete, ceramics, and drilling fluids. The dispersant properties of lignin are due to its unique chemical structure, which allows it to interact with and disperse particles in a variety of environments.

Europe and North America are currently the leading markets for lignin-based dispersants due to their well-established pulp and paper industries, which generate large quantities of lignin as a byproduct. The availability of lignin in these regions has led to significant research and development to find new use cases for this material, which is expected to enhance market growth over the forecast period.

The transportation fuel application segment is forecasted to grow at the fastest CAGR of 8.2% over the coming years. Lignin is becoming an increasingly popular alternative to petroleum-based products as it is abundant and renewable. As the second most abundant biopolymer in nature after cellulose, lignin is widely available as a byproduct of the paper and pulp industry. This makes it a sustainable and renewable material that can be used to produce a wide range of products; this is expected to boost its market demand.

Lignin demand is increasingly being seen in construction applications due to its unique properties that make it a valuable ingredient in building materials. In recent years, there has been a growing interest in using lignin as a sustainable alternative to synthetic materials in construction applications. Using lignin in construction materials can reduce reliance on synthetic materials that are derived from non-renewable resources and have a significant environmental impact.

Regional Insights

Europe was the largest market for the consumption of lignin in 2022 with a revenue share of 38.8% and is anticipated to ascend at a CAGR of 4.3% over the estimated period. Regulatory norms for restriction of greenhouse gas emissions coupled with the prominent production base of biopolymers in France, Belgium, Germany, and the Netherlands are the factors anticipated to fuel the demand. Increasing demand for lightweight motor vehicles coupled with the presence of major vehicle manufacturing facilities is expected to positively influence the regional product demand. Additionally, ascending aromatic applications and extensive R&D by prominent players are the factors expected to benefit the growth.

The U.S. Environmental Protection Agency (EPA) has announced financial assistance to promote the growth of biopolymers and bio-refinery, which in turn is expected to fuel the demand for lignin. Moreover, shifting trends in the chemical manufacturing industry for the use of bio-based raw materials in manufacturing processes is projected to promote the application of bio-refinery and thus, fuel the demand for lignin as a catalyst.

Asia Pacific is expected to register the fastest CAGR of 5.0% from 2023 to 2030. Rising trends for the manufacturing of products through bio-based sources is predicted to drive the regional demand in the forthcoming years. Prominent market players in the region are engaged in the production of pulp and paper products, which is anticipated to augment the lignin production.

In Central & South America high grade lignin is expected to grow at a rapid rate over the forecast period. Growing demand for vanillin for the manufacture of fragrances, flavorings, cosmetics and skin-care products on account of the growing demand for natural ingredients in the food & beverages and skin-care industry is expected to benefit the market demand over the forecast period. In addition, the Latin American countries have huge forest covers that strengthens the raw material supply and drive the market growth of lignin in the region.

Key Companies & Market Share Insights

The market players are expected to witness a low threat of new entrants owing to the capital-intensive nature of the market. The key players are well-equipped with innovative technologies and advanced machinery to offer engineering solutions, which requires a high initial investment. However, the rising demand for innovative solutions is expected to open new avenues for market entrants.

Major players have a significant market share, in terms of revenue, through domestic and international projects. Players adopt collaboration strategy to increase the reach of their products in the market and increase the availability of their products & services in diverse geographical areas. Key market players adopting this inorganic growth strategy include UPM Biochemicals and Sweetwater Energy. Some prominent players in the global lignin market include:

• Stora Enso

• West Fraser

• UPM Biochemicals

• Sweetwater Energy

• Borregaard LignoTech

• Rayonier Advanced Material

• Domsjo Fabriker

• Changzhou Shanfeng Chemical Industry Co Ltd

• Domtar Corporation

• Nippon Paper Industries Co., Ltd

• Metsa Group

• The Dallas Group of America, Inc

• Liquid Lignin Company

• Burgo Group S.p.A

• Valmet Corporation

Lignin Market Report Scope

Global Lignin Market Report Segmentation

This report forecasts revenue growth at global, regional & country levels and provides an analysis on the industry trends in each of the segments from 2018 to 2030. For this study, Grand View Research has segmented the global lignin market based on product, application, and region:

• Product Outlook (Volume, Kilotons; Revenue, USD Million; 2018 - 2030)

  • Lingosulfonates

  • Kraft Lignin

  • Organosolv Lignin

  • Hydrolyzed Lignin

  • SODA Lignin

  • Others

• Application Outlook (Volume, Kilotons; Revenue, USD Million; 2018 - 2030)

  • Construction Material

  • Transportation Fuel

  • Biopolymer

    • Polyurethane Foam

    • Others

  • Bio-asphalt

  • Resins & Glues

  • Dispersants

  • Carbon Fiber & Bio-based Carbons

  • Others

• Regional Outlook (Volume, Kilotons; Revenue, USD Million; 2018 - 2030)

  • North America

    • U.S.

    • Canada

    • Mexico

  • Europe

    • Germany

    • U.K.

    • France

    • Italy

    • Spain

  • Asia Pacific

    • China

    • India

    • Japan

    • Indonesia

    • Malaysia

  • Central & South America

    • Brazil

  • Middle East & Africa

    • South Africa