1,3 Butanediol Market

1,3 Butanediol Market Outlook 2025 to 2035

The 1,3 butanediol market is valued at USD 503.7 million in 2025. As per Fact.MR analysis, it will grow at a CAGR of 4.8% and reach USD 797.6 million by 2035.

The industry continued to grow with rising demand for personal care and move toward bio-based manufacturing in 2024. It will continue to grow even more until 2035 at a projected 4.8% CAGR through clean-label movements, green production, and further penetration in digital and new-age beauty channels.

In 2024, the industry grew continuously with expanding demand from the personal care and cosmetics sector. Its application in various applications as an emollient, a humectant, and a solvent made it hugely popular for use in moisturizer products, shampoos and conditioners, and in cleansers. The clean formulations trend led industry leaders in the personal care industry to replace the traditional glycols with 1,3-butanediol due to its moisturizing as well as its softening actions.

Chemical firms at the supplier level replied by increasing their capacities. Jiangsu Huachang Chemical Co., Ltd., for instance, ordered a 200-ton pilot plant in the quest for commercial-scale production with an emphasis on improving the efficiency of the process as well as the quality of the product.

The other major development in 2024 was the shift of the industry to bio-based substitutes for 1,3-butanediol. There was increasing regulatory pressure on petrochemical derivatives and increasing consumer pressure on sustainable ingredients that propelled the move. Bio-based manufacturing processes, particularly fermentation of renewable feedstocks like sugar, became popular.

Genomatica and Godavari Biorefineries were among the companies that brought in green alternatives, which were as effective or even superior to their traditional counterparts. The products not only helped in expanding the market but also met sustainability needs from global producers of cosmetics.

From 2025 and beyond, the 1,3-butanediol industry is going to keep growing. With a projected CAGR of 4.8%, the market is going to increase to approximately USD 503.7 million by 2025 and USD 797.6 million by 2035. The industry is going to be solidly rooted in the personal care market that is itself undergoing tremendous transformation ushered in by digitalization, ingredient transparency, and clean label.

Fermentation-based production technology will be seen increasing in size once more and reducing the cost of production, along with stabilizing supply chains. Aside from this, expansion of e-commerce and D2C beauty businesses will increase product uptake and awareness in new categories. Sustainability, performance, and formulation agility will characterize industry growth over the decade ahead.

Key Metrics

Metric	Value
Estimated Global Size in 2025	USD 503.7 million
Projected Global Size in 2035	USD 797.6 million
CAGR (2025 to 2035)	4.8%

1,3 Butanediol Industry Dynamics and Outlook

Increasing Application in Cosmetics & Bio-Based Manufacturing

The global 1,3-butanediol market is mainly driven by its growing application in the cosmetics and personal care segment. Since it can be employed as a solvent, emollient, and humectant, it is being used extensively in moisturizers, cleansers, and hair products. The demand for clean-label and non-irritant ingredients is replacing traditional glycols.

Bio-based 1,3-butanediol produced from fermentation is becoming more and more popular with increasing emphasis from the manufacturers on sustainable production. Higher research and development expenditure investments by companies and enhanced regulatory support in favor of chemicals, additionally supporting demand, in particular, especially in emerging nations like the Asia-Pacific and North America.

High Costs May Hamper Adoption

A primary industry inhibition notwithstanding its advantages is the high production cost, particularly for bio-based variants. Fermentation-based processes are currently not cost-competitive with petrochemical processes; hence adoption becomes challenging in price-sensitive industries. Additionally, smaller personal care companies may lack awareness of the ingredient's performance and benefits.

The timeline for approval by regulators for new cosmetic ingredients is highly variable by region, which slows commercialization. Supply chain challenges around bio-based feedstocks such as sugar, and ensuring regular quality and purity, can restrict production scalability.

New Industries and Emergence of Sustainable Beauty

The application of the product will vary from cosmetic additives to pharmaceuticals, specialty chemicals, and bioplastics. The transition to green chemistry presents a promising growth opportunity, i.e., for companies that make investments in process development and cost reduction for bio-based manufacturing.

Increased demand for eco-certified, vegan, and cruelty-free ingredients fits with the bio-based nature of 1,3-butanediol, which is more attractive as a result. Also, the rise in direct-to-consumer (D2C) and e-commerce beauty firms enhances visibility and differentiation of products, especially in emerging markets. These patterns trigger similar high-growth prospects in mature and emerging economies as well.

Competition, Supply Chain Risks, and Technological Barriers

The market is threatened by alternative glycols such as propylene glycol derivatives and butylene glycol, both of which are easily found and cheaper in many cases. Low-cost Asian producers may compete on price and depress profit margins. Technological challenges in scaling fermentation processes and potential patent restrictions may slow innovation. Disruptions in the global supply chain, especially in sourcing renewable feedstocks, could destabilize production.

1,3 Butanediol Demand Analysis and Impact

The 1,3-butanediol industry has a large value chain and various parties come together to bring innovation, regulatory adherence, and industry development. Such parties involve producers, manufacturers, technology companies, investors, regulators, end-users, and infrastructure developers, each with a pivotal role to shape the direction of the industry. Their interdependencies, strategic choices, and conflicts create opportunities and challenges within the sector.

Producers are the core of the industry and are involved in both synthetic and bio-based manufacturing. Major chemical players involved in the production of 1,3-butanediol must balance cost-effective production and providing growth in relation to the growing demand for sustainable, bio-based forms.

Bio-based production by fermentation is a less polluting alternative to conventional petrochemical processes, but more expensive to make. With increasing demand for clean-label and sustainable products, companies need to invest in research and development to enhance yield efficiency, lower costs, and increase bio-based scale of production.

Investors drive the direction of the industry by investing in capacity expansion of production, technology, and new business. The 1,3-butanediol industry, and particularly the bio-based industry, offer opportunities for high returns since it is at the cutting edge of trends towards green. Investors seek companies that can show a definite path to profitability while adopting green approaches.

They are interested most in companies that are developing bio-based production or pursuing the development of 1,3-butanediol in novel applications such as bioplastics or drugs. They have to be careful with regulatory risks and technological challenges that might impede expansion. Their investments can upset or expedite industry activity by channeling capital to the most valued players, thus transforming the competitive environment.

Regulators have considerable sway over the industry for 1,3-butanediol, since they define the laws that determine chemical ingredients' manufacturing and utilization, particularly in personal care and drug products. Stringent environmental regulation, for instance, that constrains petrochemical derivatives drives cleaner solutions, which is conducive to bio-based 1,3-butanediol. Regulators influence producers' and manufacturers' investment in technology and product development priorities. Regulatory compliance is necessary because approval delays or legislative changes can disrupt the industry.

Technology companies play a crucial role in improving the production processes of bio-based and synthetic 1,3-butanediol. They provide the equipment, fermentation technology, and process engineering solutions needed to produce on a large scale. The developments in fermentation technology and enzyme optimization are crucial in bridging the gap in cost competitiveness between the bio-based and petrochemical-based 1,3-butanediol. The companies play a crucial role in reducing the cost of production and the efficiency required to propel growth in the bio-based segment.

Technology providers also have conflicting interests with producers since embracing new technologies will necessitate considerable capital outlays, time, and knowledge. The solution between producers and technology providers is to create joint ventures aimed at solving scale-up issues in bio-based production.

End-users such as cosmetics ingredients companies, drug manufacturers, and specialty chemicals makers propel demand for 1,3-butanediol in finished goods. They are searching more and more for ingredients that fit with consumers' values regarding sustainability and safety. The clean beauty trend specifically has put the spotlight on 1,3-butanediol because of its natural and non-toxic nature.

Such end-users play a crucial role in shaping regulatory trends as well by demanding certifications and sustainability levels. Yet end-users find themselves in the dilemma of having to pay high prices for bio-based ingredients while keeping costs competitive. There is a chance here for end-users to work with manufacturers and regulatory bodies to develop industry standards that can balance cost-redundancy with sustainability objectives.

1,3 Butanediol Industry Analysis by Top Investment Segments

The 1,3 butanediol industry is segmented by function into humectant, emollient, stabilizer, and intermediate. By end-use industry, the industry serves cosmetics & personal care, plastics & polymer, paint & coatings, food, and others. Regionally, the industry spans North America, Latin America, Europe, Asia Pacific, and the Middle East and Africa (MEA).

By Function

The humectant segment is anticipated to expand at a CAGR of 4.6% between 2025 and 2035. Its wide usage across the cosmetics and personal care industry, to enhance moisture maintenance and skin hydration, is responsible for this expansion. Since it has a hygroscopic nature, propylene glycol efficiently retains moisture, thus proving to be one of the main ingredients in beauty care lotions, creams, and hair treatments.

Its low volatility, feel, and acceptability in wide-ranging formulations give product stability and increases consumer appeal. It is also used in food preparation, for instance, in baking, where its humectant property maintains the freshness and texture.

As consumer knowledge regarding skin hydration and food product shelf-life extension continues to grow, demand for humectant-grade propylene glycol is expected to grow steadily. Approvals for use in cosmetics and food in key economies also underpin industry growth.

Producers are also applying humectant chemicals functionality to develop multifunctional products that provide moisturizing benefit combined with antimicrobial or active ingredient delivery, particularly in upscale skincare and wellness applications. These evolving applications and strong demand in end-use markets are driving the segment's long-term growth opportunities.

By End-Use Industry

The cosmetics & personal care industry is expected to have a CAGR of 5.1% over 2025 to 2035. It is widely applied in personal care products, used as a humectant, stabilizer, solvent, and emollient. It is specifically needed to preserve the moisturizing of the skin, enhance the texture of the product, and enhance the delivery of the active ingredients.

As consumers continue to seek clean-label, non-irritating, and eco-friendly ingredients, 1,3-butanediol has become a good alternative to conventional glycols such as propylene glycol or butylene glycol. Its skin mildness, natural formula compatibility, and biodegradability also drive its use in skincare, haircare, and hygiene applications.

Trends in global beauty and wellness, fueled by digital influence, personalization, and eco-friendly lifestyles, are now encouraging formulators to innovate using safe and efficacious ingredients.

Analysis of Top Countries, Producing, Using, and Distributing 1,3 Butanediol

The 1,3 butanediol industry study identifies top trends across 30+ countries. 1,3 Butanediol producers operating in top opportunist countries can identify key strategies based on extraction, production, consumption, demand, and adoption trends of 1,3 butanediol. India is the fastest-growing 1,3 butanediol industry, followed by China. The chart below draws focus on the growth potential of the top ten 1,3 butanediol industries during the forecast period

USA

The USA industry for 1,3-butanediol is anticipated to grow at a CAGR of 5.2% during 2025 to 2035. The key driving factors are growing use of bio-based ingredients in personal care products and innovation of cleaner production processes.

Industry players such as Genomatica and OXEA GmbH are growing manufacturing capacity and sustainability initiatives for 1,3-butanediol bio-based particularly. In addition, the increasing need for clean-label cosmetics is propelling the movement toward bio-based counterparts due to increasing consumer consciousness towards sustainable products.

UK

UK 1,3-butanediol industry is expected to witness a 4.7% CAGR during 2025 to 2035. Greater use of sustainable personal care products and sustainable production processes in the UK are expected to drive the industry. BASF SE, which is one of the frontrunners in the UK, is already engaged in research on production processes for higher yield from ecologically sustainable sources.

Part of the European Union's general sustainability agenda, the UK is aiming for petrochemical-derived to bio-derived raw materials substitution, especially in the areas of personal care and cosmetic use. This is directly connected with increasing regulatory pressures against the use of sustainable ingredients, which are propelling demand.

France

France will be more likely to witness a CAGR of 4.5% between 2025 and 2035. Growing environmental sustainability in France is boosting demand for bio-based and renewable chemicals. Being part of the European Union, France has stringent petrochemical-based regulatory standards for chemicals and thus demand for renewable 1,3-butanediol in the personal care and cosmetics industry will rise.

There are French companies already using some of the bio-based and renewable ones as part of their portfolio, thereby creating room for more in-depth industry penetration. Beyond the personal care industry, other industrial solvents and automotive applications of 1,3-butanediol are also growing in France owing to increasing demands for cleaner production.

Germany

Germany will be growing at a strong CAGR of 5.5% over 2025 to 2035. As the largest economy of Europe and industrial manufacturing base, Germany is among the strongest industry drivers of 1,3-butanediol. Being at the vanguard of sustainability and cutting-edge manufacturing technology, it has every chance to be the prime demand driver of bio-based 1,3-butanediol.

It is also home to some of the top players like BASF, which are heavily investing in bio-based manufacture of chemicals and building their lists of sustainable alternatives. Aside from this, applications of high-purity 1,3-butanediol in cosmetics and personal care items, particularly in hair care and skin care items, are increasing. The German industry is on top with the EU-level policies towards the reduction of carbon footprints and promoting innovation and green new chemical product launches.

Italy

The Italian 1,3-butanediol industry is projected to grow at a CAGR of 4.0% over the forecast period of 2025 to 2035. Although Italy is a tiny industry in terms of volume in comparison with other European countries, it is extremely demanding in terms of specific product categories such as automobiles, cosmetics, and personal care. Clean labeling and sustainability are driving the industry in this region, and this is reflecting consumer demand for bio-based personal care actives.

Italy is also part of the EU initiative to make chemical production more sustainable through greater adoption of renewable chemicals such as 1,3-butanediol. Italian processors and distributors are increasingly focused on fermentation-based manufacturing of bio-based 1,3-butanediol, which is becoming an industry force driver.

South Korea

South Korea will continue to register a CAGR of 5.0% through 2025 to 2035 in the industry for 1,3-butanediol. South Korea is witnessing increased demand for chemicals based on biological sources from the cosmetic, textile, and automobile industries. South Korea has the production capabilities of chemicals and a solid manufacturing base that is very conducive to increased demand for environment-friendly products.

Large firms like Hanwha Group and LG Chem are dominating the manufacturing in the nation through conventional as well as bio-based methods of production. Besides that, the South Korean government policies are also shifting towards the adoption of environmentally friendly methods of production in conformity with international advancements. In addition to the increasing demand for bio-based 1,3-butanediol, South Korea's focus on clean and green-label products will be a fantastic opportunity to grow.

Japan

Japan is anticipated to record a CAGR of 4.8% during the forecast period of 2025 to 2035 for the Japanese market of 1,3-butanediol. Japan is at the forefront of embracing green chemistry and green production technology, and players such as Daicel Corporation are at the forefront of the trend. The Japanese market is marked by high demand for bio-based 1,3-butanediol, especially in the automotive and personal care applications.

The regulatory framework of Japan is promoting the use of renewable chemicals, and this increases demand for bio-based 1,3-butanediol. Japanese manufacturers are very much involved in R&D for new manufacturing tech development, like fermentation-based, which will maintain cost-effectiveness as well as sustainable manufacturing.

China

China will most likely register a strong CAGR of 6.0% in the 1,3-butanediol industry during 2025 to 2035. China is the world's largest producer and consumer of chemicals, and the 1,3-butanediol industry cannot be left behind. The world's growing interest in bio-based production and sustainability is also followed by China, especially in the automotive, personal care, and textiles sectors.

Chinese companies are investing in conventional as well as bio-based manufacturing technologies, such as the improvement of fermentation technology for use in the domestic industry. Government policies aimed at reducing the country's dependence on petrochemical-based products are creating a conducive atmosphere for bio-based chemicals such as 1,3-butanediol.

Australia-New Zealand

The Australia-New Zealand industry will grow at a CAGR of 4.2% during 2025 to 2035 in the 1,3-butanediol industry. Demand for industries in the cosmetic and personal care industries in these countries is driven by demand for sustainable, bio-based ingredients, which is constantly on the lookout for these kinds of products.

The sustainability drive in the country and environmental regulation are supportive of international trends towards a greener solution, as seen in a progressively strengthening bio-based chemicals industry. The ANZ region is well-positioned in terms of the Asia-Pacific supply chain and is thus still an optimistic industry for global producers. Domestic players are also making investments in research and development to try to increase bio-based production, and with growing global demand further for clean-label products, the regional industry in the region for 1,3-butanediol will grow steadily.

Leading 1,3 Butanediol Companies and Their Industry Share.

Company Name	Estimated Market Share (%)
OXEA GmbH	35%
KH Neochem	30%
Genomatica	5%
Daicel Corporation	25%

A number of industry leaders control the 1,3-butanediol industry, with market leaders including OXEA GmbH, KH Neochem, Genomatica, and Daicel Corporation controlling the industry. They use their well-established market presence, massive production facilities, and innovative approaches to stay at the forefront of the competitive business. The business is extremely concentrated, with some dominant players having a major portion, which imparts the business its oligopolistic character.

OXEA GmbH, with its headquarters in Germany, has established itself as an industry leader with deliberate investment in technology and production capacity. It continues to maintain adherence to sustainable production methods and a secure supply chain, enabling it to address rising global demand for both bio-based and petrochemical-based 1,3-butanediol.

KH Neochem, a Japanese chemicals firm, established a strong industry reputation based on high-quality output of 1,3-butanediol for use in industries such as cosmetics, personal care, and plastics. Its use of green manufacturing methods and emphasis on sustainable production made the firm a global leader in the industry.

Both bio-based and chemical 1,3-butanediol are supplied by KH Neochem, making it in good position to fulfill the demand for green solutions. By making consistent R&D investments and building capacities, KH Neochem is set to enjoy a long-term presence in the industry in the shape of its diversified offerings.

Genomatica, an USA biotech company, has gone a long way in creating environment-friendly chemical solutions, especially to produce 1,3-butanediol on bio-basis. Applying cutting-edge fermentation technologies, Genomatica presents a green substitute for conventional petroleum-based processes. Genomatica's strategic alliance with industry titans in automotive, personal care, and plastic has brought its presence in the industry to the next level.

Daicel Corporation is a Japanese multinational chemical giant which is a solid competitor in the 1,3-butanediol industry. Renowned for its expertise in organic components, Daicel manufactures high-purity 1,3-butanediol mainly to be utilized in the automobile, textile, and cosmetics industries. The company's emphasis on quality, state-of-the-art equipment, and dedication to research have allowed it to become an industry leader.

Key Strategies of 1,3 Butanediol Manufacturers, Suppliers, and Distributors

In the market for 1,3-butanediol, the competitors have followed various strategies to combat the competitive marketplace, legislative changes, technology trends, and altering industry needs. The producers, being the key industry stakeholders, are concentrating on product innovation, geographical growth, and sustainability in order to build their competitive advantage.

Companies like OXEA GmbH and KH Neochem are investing in expanded capacities, particularly for bio-based 1,3-butanediol, to supply the growing demand for sustainable substitutes. With worldwide industry shifting to sustainability, companies are also strategically forming alliances in an effort to access new markets in addition to expanding their technology capabilities. Investors, recognizing the growing demand for sustainable chemicals, are looking to invest more and more in companies that offer bio-based substitutes or novel production technologies.

To investors, collaboration with businesses that specialize in renewable energies and green technology, such as Genomatica's bio-based 1,3-butanediol, represents a major way of capitalizing on the high demand for green products. Investors want to invest in institutions that are ramping up research and development to streamline production technology.

Geographic diversification is also crucial since investors seek to hedge local industry swings as well as local regulatory shifts. For example, firms such as Genomatica with global operations benefit from investors seeking to diversify risk and capture growth in global sectors. Regulators influence manufacturers' and investors' strategic choices.

With increased sustainability and environmental legislation around the globe, especially in the leading industries such as the European Union and North America, the regulatory authorities are testing more environmentally friendly production practices. This has led to increased emphasis on lobbying activities by actors in the value chain, both directly and indirectly in the shape of associations, to impact policy for regulation.

For instance, companies such as Daicel Corporation and KH Neochem are entering into regulatory talks to create future standards for bio-based chemicals. They are also positioning their product portfolios against strict sustainability metrics, staying compliant and opening doors to markets in regulated geographies. These assertive regulatory strategies become not just necessary for compliance but also to achieve a competitive edge in an increasingly green-minded market.

End-users, especially from industries such as cosmetics, personal care, and plastics, are responding to industry advice and consumer demand for sustainability by changing strategies. End-users are increasingly searching for suppliers of green, bio-based chemicals, like those provided by Genomatica and OXEA GmbH. Their strategy is changing to long-term agreements with suppliers so they can have constant access to high-quality, sustainable chemicals.

Startups and tech firms are also powerful stakeholder groups, shaping technology innovation in chemical production processes. They are aiming at novel processes such as fermentation-based bio-manufacturing, not just cleaner but with the potential to reduce costs of production in the long term. For example, Genomatica has emerged as an industry giant in the segment with its bio-based process for 1,3-butanediol manufacture.

Startups are particularly smart in partnering with large manufacturers in order to grow their technologies and access capital to pursue additional R&D. They also aim to capitalize on new industries where demand for bio-based chemicals is growing aggressively, and there are opportunities for technology disruption and new industry entry.

Key Success Factors Driving the 1,3 Butanediol Industry

The key success drivers for the 1,3-butanediol market are primarily on the pillars of sustainability, technological innovation, and strategic partnerships. With the need for bio-based and green chemicals growing, players that invest in sustainable production systems, e.g., bio-based fermentation pathways, are positioning themselves for long-term success.

Firms like Genomatica have capitalized on this, offering bio-based 1,3-butanediol as a successful alternative to traditional petroleum-based options. This shift to green chemistry is not only in accordance with the regulatory requirements but also with worldwide environmental goals, giving companies a competitive edge in a more sustainability-regulated market.

Technological innovation in manufacturing processes and continued investment in R&D are also crucial success drivers. Businesses that develop more efficient and cost-effective manufacturing processes, like those that reduce carbon emissions, can lower their cost of doing business and increase margins. Besides, scaling these technologies to address expanding demand is needed to sustain leadership in the industry.

Strategic alliances between chemical manufacturers, technology innovators, and investors are making possible the formation and growth of these new generation production techniques. Such partnerships assure a consistent availability of high-grade 1,3-butanediol while enabling stakeholders to divide the operating and financial risk of scaling emerging technologies.

Other Key Players

• OXEA GmbH
• KH Neochem
• Genomatica
• Daicel Corporation
• BASF SE
• LyondellBasell Industries
• SABIC
• Mitsubishi Chemical Corporation
• Dow Inc.
• Huntsman Corporation

Key 1,3 Butanediol Industry Segmentation

• By Function:

  • Humectant
  • Emollient
  • Stabilizer
  • Intermediate

• By End Use Industry:

  • Cosmetics & Personal Care
  • Plastics & Polymer
  • Paint & Coatings
  • Food
  • Others

• By Region:

  • North America
  • Latin America
  • Europe
  • Asia Pacific
  • Middle East & Africa