How is your organization navigating the intersection of innovation and disruption in the chemicals and materials industry?
As 2025 unfolds, the chemicals and materials industry is undergoing a seismic shift, where sustainability, digitalization, and supply chain resilience are no longer trends but imperatives. Circular materials, smart automation, and AI-driven innovation are not just enhancing efficiency, they are rewriting the rules of competition. Meanwhile, raw material shortages and regulatory pressures are pushing businesses to rethink sourcing, production, and value creation at every level.
To stay ahead, companies are doubling down on biorefineries, scaling energy-efficient processes, and pioneering AI-powered material design. The surge in sustainable construction materials and the rapid growth of green hydrogen and battery technologies are accelerating the industry’s evolution, shaping a future where innovation and sustainability go hand in hand.
Frost & Sullivan’s recent Chemicals and Materials Growth Webinar—Top Growth Opportunities Transforming the Chemicals and Materials Industry—unveiled strategic perspectives to help businesses navigate regulatory complexities, streamline supply chains, and capitalize on emerging investment opportunities across chemicals, CASE & construction, and polymers & composites.
Here, the following experts provided valuable perspectives on industry imperatives, emerging threats, and growth opportunities:
- Brian Balmer – Practice Area Leader at Frost & Sullivan
- Christeena Thomas – Research Manager at Frost & Sullivan
- Soundarya Gowrishankar – Senior Industry Analyst at Frost & Sullivan
- Leonardo Sampieri – Industry Analyst at Frost & Sullivan
Key Insights from the Webinar:
The Growth Webinar explored major shifts driving the chemicals and materials industry in 2025, focusing on AI innovation, sustainability, digital transformation, and evolving industry dynamics. The discussion highlighted critical opportunities and challenges shaping the industry’s competitive landscape. Given below are four key takeaways from the session:
- Sustainability Is Reshaping Production and Raw Material Strategies
The chemicals and materials industry is shifting fast toward biorefineries, circular materials, and alternative feedstocks, redefining production processes. Investments in second- and third-generation bio-based feedstocks are steering companies away from fo od-competing raw materials toward agricultural waste, forestry residues, and even carbon dioxide utilization. However, challenges related to scalability, cost efficiency, and regulatory compliance remain, requiring strategic adaptation to drive long-term sustainability.
- Digitalization Is Optimizing Supply Chains and Enhancing Operations
Technologies such as additive manufacturing (3D printing), AI-driven coatings innovation, virtual reality training, and automated supply chain management are revolutionizing how companies design, produce, and distribute materials. Industries such as coatings, polymers, and construction materials are leveraging digital platforms, AI-enhanced project planning tools, and predictive maintenance to improve operational efficiency and customer experience.
- Green Hydrogen Is Driving Growth in Polymers and Composites
The expansion of green hydrogen infrastructure is fuelling demand for advanced composites, high-performance polymers, and automation-driven material innovations. Applications such as composite pressure vessels, reinforced structural components, and AI-assisted material simulations are unlocking new opportunities. This trend underscores the increasing convergence of hydrogen, renewable energy, and high-performance materials, paving the way for low-carbon industrial solutions in the coming years.
- Geopolitical and Regulatory Shifts Are Reshaping Industry Dynamics
Trade policies, environmental regulations, and geopolitical tensions are redefining supply chains and investment priorities across the industry. The US is focusing on energy independence and deregulation, aiming to lower costs but potentially slowing sustainability initiatives while China is strengthening its dominance in chemical supply chains, prompting trade restrictions and reshoring efforts from Western economies. Meanwhile, the European Union (EU) is refining its environmental policies, balancing sustainability goals with industrial competitiveness. Tariff-driven trade conflicts, shifting regulations, and regional supply chain realignments in Southeast Asia, Europe, and North America are compelling companies to rethink sourcing strategies, compliance frameworks, and competitive positioning to ensure long-term resilience in an increasingly uncertain global order.
Are you strategically adapting to evolving industry regulations and sustainability demands to maintain a competitive edge?
“The global Chemicals and Materials market is at a critical crossroads, driven by shifting geopolitical forces, soaring raw material costs, and tightening environmental regulations. Sustainability is no longer an option—it’s a mandate. Manufacturers are reshaping industry norms by embracing circular economy strategies, revolutionizing material innovation and technological advancement.”— Brian Balmer, Practice Area Leader, Chemicals, Materials, and Nutrition
