Precedence Research estimates that the global bio-based chemical market will reach USD 120.75 billion in 2026 and is projected to grow to USD 278.49 billion by 2035, registering a 9.73% CAGR. Meanwhile, the global chemical catalyst market is estimated at USD 45.10 billion in 2026 and is expected to reach USD 64.04 billion by 2034, growing at a 4.48% CAGR.

Corporate activity reflects the same selective pattern. BASF is evaluating a potential MDI production complex in Dahej, Gujarat, while Westlake plans to close its 165,000-tonne-per-year PVC plant in Cologne, Germany. At the same time, Deepak Nitrite has commissioned a ₹300 crore chlorination and specialty chemicals facility at Dahej.

These developments point to a chemical industry being shaped by three interconnected movements:

1. Market movement — where chemical demand is growing.

2. Company movement — how producers are adjusting capacity and portfolios.

3. Investment movement — where companies and strategic investors are allocating capital.

Together, these movements provide a clearer picture of the direction of the global chemical industry in 2026.

1. Market Movement: Where Chemical Demand Is Moving

Three markets tracked by Precedence Research provide useful indicators of structural change across the chemical industry: bio-based chemicals, chemical catalysts, and chemical distribution.

Bio-Based Chemicals: A Strong Structural Growth Area

Among these markets, bio-based chemicals show the strongest projected growth.

Precedence Research estimates that the global bio-based chemical market will increase from USD 110.04 billion in 2025 to USD 120.75 billion in 2026 and reach USD 278.49 billion by 2035, representing a 9.73% CAGR.

The transition from petroleum-based feedstocks toward renewable resources is a major growth driver. Europe held the leading regional position in 2025 with approximately 50% market share, while Asia Pacific is expected to record the fastest growth during the forecast period.

Platform chemicals held the dominant position among product categories in 2025, while polymers for plastics are expected to record the highest CAGR.

The importance of this market extends beyond sustainability initiatives. Bio-based chemistry is increasingly connected with plastics, coatings, adhesives, personal care products, agriculture, and other industrial applications.

Recent industry activity also highlights the development of circular and renewable chemical feedstocks. BioBTX and Rain Carbon announced a strategic collaboration in September 2026 under which BioBTX's circular aromatic oil derived from plastic waste will be converted into benzene, phthalic anhydride, and other aromatic derivatives. BioBTX's Delfzijl facility is designed for approximately 10,000 tonnes per year of renewable aromatic oil and is expected to become operational in early 2028.

This suggests that the bio-based chemicals market is evolving from a niche sustainability segment into a broader industrial opportunity involving renewable feedstocks, circular production, and downstream chemical applications.

Chemical Catalysts: Efficiency Remains Critical

The global chemical catalyst market is estimated by Precedence Research at USD 45.10 billion in 2026 and is projected to reach approximately USD 64.04 billion by 2034, growing at a 4.48% CAGR.

Asia Pacific accounted for the largest regional share, at approximately 35% in 2024, while North America is expected to be the fastest-growing region.

Petrochemical applications represented the dominant application segment in 2024, while heterogeneous catalysts accounted for the largest share by catalyst type.

Catalysts are important across multiple chemical production processes, including petrochemicals, refining, chemical synthesis, pharmaceuticals, polymers, and environmental applications.

Their role is becoming increasingly important as manufacturers attempt to improve production efficiency while controlling operating costs and responding to sustainability requirements.

Unlike chemicals tied to one specific end-use market, catalysts support multiple stages of industrial production. As a result, catalyst demand can provide an indication of the broader push toward more efficient and technologically advanced chemical manufacturing.

Chemical Distribution: Supply Chains Are Becoming More Strategic

Chemical distribution is another important part of the industry's transformation.

Precedence Research estimates the global chemical distribution market at USD 309.96 billion in 2026, up from USD 291.04 billion in 2025. The market is projected to reach USD 543.01 billion by 2035, representing a 6.44% CAGR.

Demand from automotive, construction, pharmaceuticals, agriculture, and manufacturing continues to support the market. At the same time, chemical distribution is being reshaped by value-added services, digital procurement, AI-enabled supply-chain management, inventory optimization, warehousing, and logistics.

This means that chemical competitiveness increasingly depends on more than manufacturing capacity.

Companies also need efficient distribution networks, supply visibility, regulatory compliance, inventory management, and reliable logistics.

The result is a chemical industry in which the supply chain itself is becoming a strategic source of competitive advantage.

2. Company Movement: How Chemical Producers Are Responding

Recent corporate developments show two apparently opposing strategies operating at the same time.

Companies are adding capacity where they see strategic demand while reducing or restructuring assets that face unfavorable economics.

BASF: Potential MDI Expansion in India

On September 21, 2026, BASF announced that it was in an advanced stage of a feasibility study for a potential MDI production complex in Dahej, Gujarat.

BASF India Polyurethanes has secured an industrial land parcel for the potential project.

MDI is an important building block for polyurethane products used in insulation, refrigeration, automotive components, furniture, and consumer applications.

However, the distinction between a proposed investment and an approved project is important. BASF's Dahej development remains subject to the feasibility study and further investment decisions.

Even so, the proposal highlights India's growing importance as a manufacturing location for high-performance materials.

India's infrastructure, manufacturing, construction, automotive, and consumer sectors create potential demand for polyurethane materials, making the country strategically relevant for downstream chemical production.

Westlake: European PVC Capacity Rationalization

While companies are considering new capacity in growth markets, other producers are reducing capacity in regions facing cost and demand pressures.

Westlake announced on September 29, 2026, that it plans to cease operations at its PVC plant in Cologne, Germany. The facility has annual production capacity of approximately 165,000 metric tons.

The company cited weak demand, elevated energy costs, and increased import pressure from Asia as factors behind the decision.

Production is expected to stop in Q1 2027, with approximately 120 employees affected. Westlake intends to redirect volumes to other European PVC facilities, including its recently acquired Wilhelmshaven site.

The company expects approximately $205 million in pre-tax charges related to the closure.

The decision illustrates a broader challenge for European chemical manufacturing: high energy costs and import competition can make individual assets less competitive even when demand for the underlying chemical remains.

The result is not necessarily a decline in chemical demand globally. Instead, production is being redistributed toward locations and assets with stronger economics.

Deepak Nitrite: Specialty-Chemical Capacity Becomes Operational

In India, Deepak Nitrite is moving in the opposite direction.

Deepak Chem Tech, a wholly owned subsidiary of Deepak Nitrite, began manufacturing operations at its chlorination and specialty chemicals plant in Dahej, Gujarat, on September 29, 2026.

The company reported approximately ₹300 crore in capital expenditure for the facility by the time manufacturing began.

The project expands Deepak Nitrite's downstream manufacturing footprint and forms part of the company's wider expansion strategy.

The key distinction is that this project has moved beyond planning into operational production.

This is different from BASF's Dahej MDI development, which remains at the feasibility stage. Together, the two developments show how India is attracting both planned and operational investments in higher-value chemical manufacturing.

BASF and UPC: Lower-Carbon Chemistry Enters the Value Chain

BASF and UPC Technology signed a strategic Letter of Intent in September 2026 covering BASF's LowPCF products for the plasticizer industry.

BASF stated that its upcoming LowPCF products from the Zhanjiang Verbund site use Verbund integration, process innovations, and 100% renewable electricity. The company said the products offer a product-carbon-footprint reduction of at least 30% against defined comparison baselines, with the methodology third-party certified according to BASF.

The significance of this development extends beyond a new product range.

Chemical companies are increasingly connecting upstream production decisions with downstream customer requirements. Lower-carbon feedstocks, renewable electricity, process efficiency, and product-level carbon footprints are becoming commercial considerations within chemical value chains.

3. Investment Movement: Where Chemical Capital Is Going

The third movement is capital allocation.

Recent announcements suggest that investment is increasingly focused on four areas:

• Industrial gases and advanced materials

• Specialty chemicals

• Biotechnology

• Battery and strategic materials

These areas share a common characteristic: they are linked to industries expected to have long-term strategic importance.

Air Liquide: More Than €40 Billion Through 2030

On October 5, 2026, Air Liquide announced its BEYOND 2030 strategic plan.

The company expects to allocate more than €40 billion through 2030, with industrial investments and acquisitions representing the majority of this capital allocation.

Air Liquide identified electronics and AI, energy transition, and healthcare as strategic growth markets.

Its electronics strategy is particularly relevant to the chemical industry because semiconductor manufacturing requires specialized industrial gases and advanced materials.

As semiconductor fabrication capacity expands and chip manufacturing becomes increasingly strategic, demand for the chemical and materials infrastructure supporting semiconductor plants is also expected to increase.

The €40 billion figure should be understood as an announced future capital-allocation framework rather than capital already invested.

BASF: Potential MDI Investment in Gujarat

BASF's potential Dahej MDI complex is also part of the investment movement, although it remains at the feasibility-study stage.

The company has secured land and is evaluating a potential production complex, but it has not announced a final investment decision or project value.

MDI's use in construction, refrigeration, automotive, and consumer applications gives the proposed project strategic relevance, particularly as BASF already operates an MDI splitter and polyurethane facilities at Dahej.

The project demonstrates how companies are evaluating capacity additions closer to growing downstream markets.

Evonik: €80 Million Biotechnology Expansion

Evonik is investing approximately €80 million in a biotechnology expansion at its Fermas site in Slovenská Ľupča, Slovakia.

The company broke ground on the project on September 14, 2026.

The investment is aimed at expanding biotechnology capabilities and contract manufacturing services for pharmaceutical drug substances. It will add downstream fermentation technology and is expected to be completed in early 2028.

The project is expected to create approximately 50 new jobs.

Unlike projects that remain under consideration, Evonik's biotechnology expansion is already underway.

The investment highlights the increasing overlap between chemical manufacturing, biotechnology, fermentation, and pharmaceutical production.

Hanwa and JOGMEC: US$30 Million for UAE Battery-Anode Manufacturing

Strategic investment is also moving into battery-material supply chains.

On September 28, NextSource Materials announced a binding agreement under which Japan's Hanwa and the Japan Organization for Metals and Energy Security (JOGMEC) will invest US$30 million for a 15% project-level interest in NextSource's UAE Battery Anode Facility.

The facility is being developed in Abu Dhabi.

Phase 1 is designed to produce approximately 14,000 tonnes per year of natural graphite anode material, with ramp-up expected to begin in the second half of 2027.

The project has a planned expansion pathway toward approximately 30,000 tonnes per year.

It is advancing through pre-EPC mobilization following a Final Investment Decision announced in May 2026.

The project is important for the chemical industry because battery-anode manufacturing sits at the intersection of mining, chemical processing, advanced materials, energy storage, and automotive supply chains.

What the Three Movements Mean for the Chemical Industry

The clearest way to understand the current chemical industry is through a simple chain:

Market demand → Company response → Capital allocation

The market data indicates that chemical categories are not growing at the same speed.

Bio-based chemicals have the strongest growth profile among the selected Precedence Research markets, with a projected 9.73% CAGR through 2035.

Chemical distribution is projected to grow at 6.44% through 2035, reflecting the increasing importance of supply-chain infrastructure and value-added services.

Chemical catalysts are forecast to grow at 4.48% through 2034, supported by demand from petrochemicals, pharmaceuticals, environmental applications, and other chemical-production processes.

Company actions reveal how producers are responding to these changing conditions.

BASF is evaluating MDI capacity in India. Deepak Nitrite has commissioned specialty-chemical capacity in Gujarat. BASF and UPC are developing a commercial pathway for lower-product-carbon-footprint chemistry.

At the same time, Westlake's Cologne PVC closure demonstrates that capacity expansion is not occurring everywhere.

European producers are also rationalizing assets where energy costs, demand conditions, and import competition weaken facility-level economics.

Investment patterns provide the third layer.

Air Liquide's more than €40 billion capital-allocation framework emphasizes electronics, AI, energy transition, and healthcare.

Evonik's approximately €80 million biotechnology expansion demonstrates investment in higher-value fermentation and pharmaceutical manufacturing.

The US$30 million Hanwa and JOGMEC investment in the UAE battery-anode project demonstrates how strategic investors are supporting regionalized critical-material supply chains.

Taken together, these developments suggest that the chemical industry is moving toward selective capacity allocation rather than indiscriminate capacity growth.

Key Chemical Industry Trends to Watch

1. Sustainable and Bio-Based Chemistry

The strong growth forecast for bio-based chemicals indicates that renewable feedstocks and circular production are becoming increasingly important areas of chemical-industry development.

2. Regional Manufacturing

The contrast between BASF's potential investment in India and Westlake's European plant closure demonstrates the importance of regional cost structures, demand, logistics, and supply-chain resilience.

3. Specialty Chemicals

New investments are increasingly focused on specialty chemicals and downstream products rather than only traditional commodity capacity.

4. Biotechnology and Advanced Manufacturing

Evonik's investment shows how biotechnology is becoming increasingly relevant to chemical companies seeking opportunities in pharmaceuticals, fermentation, and higher-value manufacturing.

5. Strategic Battery Materials

The UAE battery-anode project demonstrates the growing connection between chemical processing, advanced materials, energy storage, and strategic supply-chain development.

6. Lower-Carbon Production

BASF's LowPCF initiative highlights the increasing importance of product-level carbon footprints and lower-carbon inputs in commercial chemical value chains.

7. Supply-Chain Infrastructure

The projected growth of chemical distribution demonstrates that competitive advantage increasingly depends on procurement, logistics, inventory management, digital systems, and regulatory capabilities—not simply production volume.

Conclusion

The global chemical industry in 2026 is not following a simple expansion story.

Instead, the industry is becoming more selective about which products to manufacture, where to build capacity, which assets to retain, and where to deploy capital.

The growth of bio-based chemicals points toward renewable and circular feedstocks. Chemical catalyst demand reflects the continuing need for process efficiency. Chemical distribution highlights the growing importance of sophisticated supply-chain infrastructure.

At the company level, BASF's potential MDI complex in India and Deepak Nitrite's new Dahej facility demonstrate continued investment in strategic chemical capacity. Westlake's planned Cologne closure shows that capacity rationalization remains necessary in regions facing high costs and import pressure.

Meanwhile, Air Liquide, Evonik, Hanwa, JOGMEC, and other strategic players are directing capital toward industrial gases, semiconductor-related materials, biotechnology, and battery supply chains.

The broader message is clear: the next phase of chemical-industry growth will be defined less by how much capacity is added and more by where that capacity is located, what chemistry it supports, how efficiently it operates, and how closely it aligns with strategic demand.

For chemical manufacturers, investors, distributors, and downstream users, these factors will increasingly determine competitiveness through the remainder of the decade.

Sources

Precedence Research

• Bio-Based Chemical Market — Precedence Research

• Chemical Catalyst Market — Precedence Research

• Chemical Distribution Market — Precedence Research