In 2024, the chemicals industry focused on continuing its recovery from the pandemic and geopolitical disruptions by reevaluating strategic positioning and navigating regulatory uncertainty as well as rising competition from oil and gas. Sustainable innovation faced a harsh reality check as companies saw the limited value proposition it provided. With 2024 coming to an end, the Lux team is reflecting back on the year and looking ahead to what is to come for the next era of chemicals innovation.
With predictions for 2025 finalized, the Lux team shares a few of its favorites from each of the Lux Client Priorities for Chemicals Innovation Leaders to keep an eye on in the coming year.
- Less than 50% of announced pyrolysis projects due to be completed by 2025 will announce their completion. Over 1 Mtonne of announced plastic pyrolysis capacity is expected to come online in 2025, but most of the projects will not be completed. Even if they are, few will operate at their nameplate capacities as they have yet to solve key operational challenges around feedstock supply and pyrolysis oil quality control.
- Bionaphtha supply will be limited due to feedstock constraints. Limitations in waste oil supplies will delay upcoming renewable diesel capacity scale-up, resulting in limited availability of bionaphtha. This development will underscore industry developments in exploring alternative pathways to bionaphtha via thermochemical processes such as pyrolysis and hydrothermal liquefaction as well as more novel approaches.
- Materials informatics companies will launch foundational models for materials discovery but will struggle to achieve high accuracy. Unlike traditional funnel-based materials screening, foundation models suggest molecular structures for desired material properties. However, they require vast training data sets and may overlook practical factors like manufacturability, limiting their accuracy.
- Chemicals companies will seek partnerships for thermal management materials in electronics applications. Trends like ultra-fast EV charging, 5G/6G infrastructure, and high-power AI chips demand innovative thermal management materials. To overcome long development cycles, companies will pursue startups to fast-track materials development and commercialization timelines.
- EU countries increase scrutiny over the presence of plastic in aqueous linings. With growing innovation in fiber-based products, the industry is becoming more cautious about the types of coatings used. The Netherlands has already started labeling single-use paper packaging with polymer-based coatings as a non-plastic-free item; other EU countries will follow suit.
- U.S. onshoring efforts spur homegrown manufacturing, goods, and technology. Major materials and manufacturing companies will announce major reshoring and nearshoring projects focused on key technologies like additive manufacturing, automation, and AI. The upcoming tariff policy will be coupled with U.S.-based manufacturing subsidies and tax credits that will further drive adoption of these technologies.
In 2025, the chemicals industry will prioritize product, process, and operational excellence to navigate uncertainty driven by political shifts, global conflict, and resource scarcity. Companies will remain cautious but focus on emerging technologies that ensure resilience and support domestic growth, such as biomanufacturing, abundant energy solutions like nuclear, and materials for expanding markets such as EVs and data centers, including thermal management materials. While decarbonization and circularity will remain priorities for the industry’s innovation initiatives, water security will gain prominence. Beyond leveraging existing products for new market opportunities, product and materials development will be at the core of innovation activity bolstered by new tools and capabilities enabled by AI and automation.
Join the Lux team on 30 January for our webinar “Tech Innovation in 2025: Themes and Technologies to Monitor” as we examine the trends and developments across Lux’s industry verticals to highlight themes and insights that will inform your priorities and hone your decision-making in 2025.