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Chemical Industry Trends 2023 – An Overview


The 20th of February marks one full year of the War in Ukraine, a geopolitical seismic event that was supposed to last but a few short months. Combined with China slowly easing COVID restrictions and the US economy teetering on the brink of a recession with record-high inflation, 2023 has so far gotten off to a shaky start with genuine concerns about the impact of global events on already fragile supply chains.

As a direct consequence of situations beyond their control, Chemical Companies are diving deep into the structure of their supply chains, rethinking everything from inventory levels to cost systems, material sources, chemical processes, and more. Having been in this industry for nearly two decades, here is a quick overview of the significant trends impacting the chemical supply industry this year.


Trends That Will Impact the Chemical Supply Industry


Supply Chain Woes

What seems like a never-ending problem from 2019 was exacerbated in 2022, with over 97% of companies reporting that they had to change their operations to compensate for material disruptions and delays. The study conducted by the Americal Chemistry Council (ACC) in December 2021 and March and July 2022 also found that more than 50% of companies had to scale back their production schedule as they couldn’t either ship products to customers or customers canceled their orders on fears that it would be delayed. Chemical companies are responding to these issues by focusing on stockpiling inventory where possible, developing a closer relationship with clients, and, most importantly, working with local, state, and federal governments to sort out issues with transportation networks that hinder their operations.


Increased Emphasis on Sustainability

In recent years, there has been growing concern about the environmental impact of chemical manufacturing and the products produced. The industry has responded to this by adopting more sustainable practices and investing in developing sustainable products.

In 2023, we can expect this trend to continue and even accelerate. There will be an increased emphasis on sustainable production processes, recycling, and waste management. Chemical companies will be looking to reduce their carbon footprint by utilizing more renewable energy sources and decreasing energy consumption. Additionally, they will seek to minimize water usage and find new ways to reduce waste and emissions.

There will also be a focus on developing and marketing sustainable products. Customers are increasingly looking for environmentally friendly, safe products and chemical companies are responding by developing bio-based and renewable products. For example, biodegradable plastics, plant-based surfactants, and natural dyes are becoming more common in the industry.

In addition to customer demand, government regulations will play a significant role in driving sustainability in the industry. Governments worldwide are enacting stricter laws on chemical manufacturing, and companies must comply to avoid penalties and maintain their reputation. In the coming years, we expect to see more regulations and incentives to encourage sustainable practices and products.


Advancements in Biotechnology

Biotechnology is a rapidly advancing field that revolutionizes how we approach chemical manufacturing and product development. Biotechnology refers to using living organisms, cells, or biological processes to produce chemicals, materials, or products. Biotechnology has enabled the development of new bio-based materials and products that are more sustainable, cost-effective, and efficient in the chemical industry.

One key area of biotechnology that is set to impact the chemical industry in 2023 is synthetic biology. Synthetic biology involves designing and engineering biological systems to create new or improved products. In the chemical industry, synthetic biology can be used to develop microorganisms that can produce specific chemicals or materials. This approach can be more efficient and sustainable than traditional chemical manufacturing, eliminating the need for complex and expensive production processes.

Another area of biotechnology that is set to impact the chemical industry is bioremediation. Bioremediation involves using microorganisms to clean up environmental contaminants, such as oil spills or chemical waste. The chemical industry is expected to invest more in bioremediation research and development in 2023, as it provides a sustainable and cost-effective way to address environmental concerns.

Furthermore, biotechnology has enabled the development of bio-based materials, such as bioplastics, that have a lower carbon footprint and are biodegradable. In 2023, we can expect more bio-based products to hit the market as the chemical industry continues to invest in biotechnology research and development.


Digitalization and Automation

While admittedly a little late, the chemical industry is aggressively adopting these technologies to improve productivity, quality, and safety. The trend is expected to continue in 2023, with more chemical plants and facilities implementing the Industrial Internet of Things (IIoT), artificial intelligence (AI), and machine learning (ML) to optimize operations and processes.

Digitalization and automation technologies can have a profound impact on the chemical industry. For example, the IIoT can connect machines and devices in chemical plants to gather data in real time, enabling operators to monitor and analyze performance and detect issues before they become serious problems. AI and ML can help to automate routine tasks and analyze vast amounts of data, enabling more informed decision-making and improving quality control.

One significant benefit of digitalization and automation is that it can help to improve workplace safety. With these technologies, workers can monitor processes and equipment remotely, minimizing the need for manual intervention in hazardous environments. Automation can also reduce the risk of human error, which can have severe consequences in the chemical industry.

Overall, the increasing use of digitalization and automation is transforming the chemical industry, making it more efficient, productive, and safe. As these technologies continue to evolve, businesses in the chemical industry must embrace them to stay competitive and meet the demands of a rapidly changing marketplace.


Focus on Health and Safety

In 2023, the chemical industry is expected to focus more on health and safety as a top priority. This trend is driven by the increasing awareness of the importance of employee safety and health and the need to comply with ever-changing regulations and standards.

Chemical companies are investing more in developing safer chemicals and products that are less harmful to the environment and human health. They are also improving workplace safety by implementing new safety protocols, enhancing employee training, and utilizing more advanced safety equipment and technology.

The importance of personal protective equipment (PPE) is another aspect of the increased focus on safety. Employers are providing better quality PPE to their employees, ensuring that it is adequately maintained, and educating employees on how to use it properly. This not only protects employees from harm but also helps to prevent workplace accidents and injuries.

Additionally, the chemical industry is prioritizing using more eco-friendly and sustainable practices, reducing environmental impacts and risks associated with chemical production. For example, the industry is using more sustainable feedstocks and minimizing hazardous chemicals, resulting in safer and more sustainable products.

By adopting better safety practices and products, companies can meet regulatory requirements and improve their profitability by increasing efficiency and reducing the costs associated with workplace accidents and injuries.


Geopolitical Factors

Geopolitical factors such as trade policies, tariffs, and regulations significantly impact the chemical industry’s growth and profitability. In 2023, we expect these factors to continue to play a critical role in shaping the industry’s future.

One significant factor likely to impact the chemical industry in 2023 is the ongoing trade tensions between major global economies, such as the United States, China, and the European Union. These tensions have led to the imposition of tariffs and other trade barriers, making it more difficult for chemical companies to operate across borders and compete in the global market.

In addition, the implementation of new regulations and policies by governments worldwide is another factor that will influence the chemical industry in 2023. For instance, the European Union’s REACH regulation, which regulates the production and use of chemicals in the EU, is set to be updated in 2023. This update will likely impact the industry, particularly for companies that export chemicals to the EU.


The chemical industry will likely experience both challenges and opportunities in 2023 due to geopolitical factors. To maintain their competitiveness and profitability, businesses will need to remain agile and responsive to changes in regulations, policies, and supply chain disruptions.

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