What are bio-based chemicals and enzymes? | Explained Premium

Explore India's potential in bio-based chemicals and enzymes, highlighting industry leaders and challenges in sustainable manufacturing.

The story so far: Bio-based chemicals are industrial chemicals produced using biological feedstocks like sugarcane, corn, starch, or biomass residues, often through fermentation or enzymatic processes. Examples include organic acids (such as lactic acid), bio-alcohols, solvents, surfactants, and intermediates used in plastics, cosmetics, and pharmaceuticals. Enzymes are biological catalysts widely used in detergents, food processing, pharmaceuticals, textiles, pulp and paper, and increasingly in biomanufacturing. Enzymes often work at lower temperatures and pressures, reducing energy use and emissions.

India has strong fundamentals for scaling bio-based chemicals and enzymes: a large agricultural base, deep expertise in fermentation from pharmaceuticals and vaccines, and a growing manufacturing sector. Expanding this space could reduce import dependence on petrochemicals, create new markets for agricultural produce, and position India as a competitive supplier of sustainable industrial inputs. For example, India imported roughly $479.8 million worth of acetic acid in 2023.

India has prioritised bio-based chemicals and enzymes as a priority area under the Department of Biotechnology’s BioE3 policy. In the bio-based chemicals segment, companies such as Praj Industries and Godrej Industries are leading. Other firms such as Godavari Biorefineries are pioneering ethanol-based, bio-derived chemicals in India, while Jubilant Ingrevia produces “acetyls” intermediates (for example, acetic anhydride/ethyl acetate). Emerging companies such as StringBio are using novel microbial strategies to develop such chemicals. The India enzymes market is consolidated in nature with top players accounting for more than 75% of the market share. Companies such as Novozymes India, DuPont, DSM, Advance Enzyme Technologies, BASF SE, and Ultreze Enzymes Private Limited are key players in the Indian market.

The EU Bioeconomy Strategy and Action Plan provides coordinated support for bio-based chemicals as part of circular bioeconomy goals. It links industrial transformation to climate goals, waste reduction, and sustainable growth. In the U.S., the USDA BioPreferred Program mandates federal procurement preference for certified bio-based products, including chemicals and enzymes, creating early markets for producers. China’s bioeconomy development plans explicitly prioritise high-value bio-based chemicals and enzyme technologies as strategic sectors. In Japan, priority projects funded through METI/NARO integrate bio-based chemical research with manufacturing readiness.

A key risk in developing the bio-based chemicals sector is the comparative cost of bio-based products relative to petrochemical alternatives. While this cost disadvantage may be temporary and limited to early stages of scale-up, it nonetheless creates a significant entry barrier for private investment. A second risk relates to the availability of reliable feedstocks and supporting infrastructure required to produce different categories of bio-based chemicals at scale. A third challenge lies in market adoption — specifically, whether bio-based chemicals can seamlessly substitute existing inputs in manufacturing pipelines and whether downstream manufacturers are willing to switch, even when costs are comparable.

Scaling shared biomanufacturing infrastructure — such as biofoundries, pilot plants, and demonstration facilities under BioE3 — can reduce capital risk for firms. Clear standards, certification, and procurement policies can help create build investor confidence.