Natural Oil Polyols Market Report 2026

The natural oil polyols market size has grown strongly in recent years. It will grow from $8.11 billion in 2025 to $8.74 billion in 2026 at a compound annual growth rate (CAGR) of 7.8%. The growth in the historic period can be attributed to development of vegetable oil-based polyols, increasing environmental regulations on petrochemical polyols, expansion of polyurethane foam applications, availability of agricultural oil feedstocks, growth of green chemistry initiatives.

The natural oil polyols market size is expected to see strong growth in the next few years. It will grow to $11.47 billion in 2030 at a compound annual growth rate (CAGR) of 7%. The growth in the forecast period can be attributed to rising demand for circular economy materials, expansion of bio-based plastics adoption, increasing investments in sustainable polymers, growing automotive electrification needs, rising focus on carbon footprint reduction. Major trends in the forecast period include increasing adoption of bio-based polyurethanes, rising use in sustainable construction materials, growing demand for low-voc coatings, expansion of automotive lightweight applications, enhanced focus on renewable feedstocks.

The increasing demand in the automotive sector is expected to propel the growth of the natural oil polyols market going forward. The automotive sector encompasses the design, development, manufacturing, marketing, and sale of passenger and commercial vehicles. Growth in this sector is largely driven by rapid urbanization and economic expansion, as rising disposable incomes and growing urban populations in developing regions increase vehicle ownership and production. Natural oil polyols support automotive demand as these bio-based materials are widely used in the production of lightweight polyurethane foams for vehicle seats, interior panels, and insulation. Their use helps manufacturers reduce vehicle weight, improve fuel efficiency, and comply with increasingly stringent environmental regulations. For instance, in March 2025, according to the European Automobile Manufacturers’ Association (ACEA), a Belgium-based automobile association, global car sales reached 74.6 million units in 2024, representing a 2.5% increase compared to 2023. Therefore, the increasing demand in the automotive sector is driving the growth of the natural oil polyols market.

The increasing demand in the construction industry is also expected to propel the growth of the natural oil polyols market. The construction industry involves activities related to the development, renovation, and maintenance of residential, commercial, and industrial buildings, as well as infrastructure projects. Rising urbanization driven by migration for improved employment opportunities, education, and living standards is fueling demand for new housing and infrastructure. Natural oil polyols play a vital role in construction by enhancing the sustainability and performance of materials such as insulation foams, coatings, adhesives, and sealants. These bio-based alternatives to petrochemical polyols support greener building practices and reduce environmental impact. For instance, in July 2024, according to the United States Census Bureau, a US-based government agency, privately owned housing units authorized by building permits reached a seasonally adjusted annual rate of 1,493,000 in June 2023, representing a 3.1% increase from May 2023. Housing starts also rose to an annual rate of 1,415,000, up 4.4% month-over-month. Therefore, growing construction activity is driving demand for natural oil polyols.

Major companies operating in the natural oil polyols market are focusing on technological advancements, such as the development of 100% bio-based polyester polyols, to meet rising demand for sustainable, low-carbon polyurethane materials across coatings, adhesives, sealants, elastomers (CASE), and foam applications. Bio-based polyester polyols are produced from renewable vegetable oils, including soybean and castor oil, and function similarly to conventional petrochemical polyols in polyurethane synthesis. These materials offer reduced carbon footprints, higher renewable content, and improved regulatory compliance. For instance, in September 2024, Cargill Incorporated, a US-based agribusiness and industrial chemicals company, launched three 100% bio-based polyols at FEICA 2024. The portfolio includes a fully bio-based polyester polyol for polyurethane foams and coatings, an rPET-derived polyol supporting circular-economy initiatives, and a next-generation polyol designed to eliminate the need for isocyanates, enabling manufacturers to maintain performance while strengthening sustainability credentials.

Major companies operating in the natural oil polyols market are Cargill Incorporated, Mitsui Chemicals Inc., BASF SE, Repsol S.A, The Dow Chemical Company, Wanhua Chemical Group, Covestro AG, Evonik Industries AG, Arkema, Huntsman International LLC., Stepan Company, Croda International Plc, Perstorp Holding AB, Sanyo Chemical Industries Ltd., Kukdo Chemical Co. Ltd., Jayant Agro Organics Ltd., Oleon NV, Emery Oleochemicals, Elevance Renewable Sciences Inc., Novomer Inc.

North America was the largest region in the natural oil polyols market in 2025. The regions covered in the natural oil polyols market report are Asia-Pacific, South East Asia, Western Europe, Eastern Europe, North America, South America, Middle East and Africa. The countries covered in the natural oil polyols market report are Australia, Brazil, China, France, Germany, India, Indonesia, Japan, Taiwan, Russia, South Korea, UK, USA, Italy, Spain, Canada.

The natural oil polyols market consists of sales of castor oil polyols, soy oil polyols, palm oil polyols, and rapeseed oil polyols. Values in this market are ‘factory gate’ values, that is, the value of goods sold by the manufacturers or creators of the goods, whether to other entities (including downstream manufacturers, wholesalers, distributors, and retailers) or directly to end customers. The value of goods in this market includes related services sold by the creators of the goods.

The market value is defined as the revenues that enterprises gain from the sale of goods and/or services within the specified market and geography through sales, grants, or donations in terms of the currency (in USD unless otherwise specified).

The revenues for a specified geography are consumption values that are revenues generated by organizations in the specified geography within the market, irrespective of where they are produced. It does not include revenues from resales along the supply chain, either further along the supply chain or as part of other products.

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