Waterborne Coatings Market to Reach US$ 131.8 Billion by 2031 Amid Rising Demand for Eco-friendly Solutions

The global waterborne coatings market, valued at US$ 79.1 billion in 2022, is projected to expand at a CAGR of 5.8% from 2023 to 2031. This steady growth is expected to drive the market to a valuation of US$ 131.8 billion by the end of 2031. The rise in demand is fueled by increasing environmental regulations, growing adoption of eco-friendly coatings, and expanding applications across industries such as automotive, construction, and general industrial sectors.

Low emission of volatile organic compounds (VOC) and decrease in associated health risks are prominent factors driving the global waterborne coatings market value. Significant rise in need for infrastructure, especially in Asia Pacific, is also augmenting market progress. Waterborne coatings applications in the building & construction sector have evolved substantially over the last few years. Coatings today have varying raw material bases as well as environmental profiles and qualities. A range of factors, including paint formulations and ecological restrictions, has influenced these market developments.

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Market Segmentation

The waterborne coatings market can be segmented based on several factors:

By Resin Type

Acrylic: This segment held the largest market share in 2023 and is expected to continue its dominance due to excellent color and gloss retention, superior exterior durability, and growing demand from the automotive and infrastructure sectors. Water-based acrylic coatings, acrylic emulsions, and acrylic resins are key product types within this segment.

Polyurethane: Growing demand from the transportation industry for refinishes in automotive, aerospace, and marine applications is expected to drive the demand for polyurethane waterborne coatings. These offer excellent abrasion and chemical resistance.

Epoxy: Water-based epoxy coatings and waterborne epoxy-ester coatings are utilized for their strong adhesion, chemical resistance, and durability, finding applications in industrial and protective coatings.

Alkyd: Water-based alkyd coatings and modified alkyd coatings are gaining traction in wood and metal applications due to their high gloss and adhesion properties.

Polyester: Waterborne polyester coatings are used in various industrial applications, offering good flexibility and chemical resistance.

Others: This includes polyvinylidene chloride (PVDC), polyvinylidene fluoride (PVDF), and other hybrid coatings catering to niche applications.

By Application

Architectural: This segment held the largest market share in 2022 and is expected to maintain its lead, driven by increasing building and construction activities globally and the demand for decorative and protective coatings for residential and commercial buildings. Applications include roof coatings, wall paints, and deck finishes.

Automotive (OEM & Refinish): The automotive industry is increasingly adopting waterborne coatings to meet stringent environmental regulations and achieve high-performance finishes in both original equipment manufacturing and refinishing processes.

Furniture & Flooring: Waterborne coatings are preferred in the furniture and woodworking industry due to their low toxicity, reduced odor, and compliance with environmental regulations.

Electronics: These coatings are used to provide protection and enhance the aesthetic appeal of electronic devices.

Marine: Waterborne coatings are used in the marine industry for their anti-corrosion properties and environmental benefits.

Paper & Printing: Waterborne coatings are utilized in the packaging and printing industries for their low VOC content and ability to provide desired surface properties.

Industrial: This includes coatings for machinery, metal structures, and other industrial equipment requiring durability and protection.

By Industry Vertical

Building and Construction
Automotive
General Industrial
Wood
Packaging
Aerospace
Marine
Others

By Region

North America (U.S., Canada, Mexico)
Europe (Germany, France, UK, Italy, Spain, Rest of Europe)
Asia Pacific (China, Japan, India, South Korea, Australia, Rest of Asia Pacific)
Latin America (Brazil, Argentina, Rest of Latin America)
Middle East & Africa (Saudi Arabia, UAE, South Africa, Rest of Middle East & Africa)

Regional Analysis

Asia Pacific accounted for the largest share of the waterborne coatings market in 2022 and is expected to be the fastest-growing region during the forecast period. This growth is attributed to the significant expansion of the real estate sector, increasing automotive production (especially in China and India), rising disposable incomes, and growing environmental awareness in the region.
Government investments in infrastructure and industrial sectors in countries like India and China are further boosting the demand for architectural and industrial waterborne coatings.

Europe held the second-largest market share in 2022, driven by the presence of major automotive manufacturers and stringent environmental regulations promoting the adoption of low-VOC coatings. Increasing construction activities in Western European countries are also contributing to market growth.

North America is expected to witness steady growth, supported by stringent environmental regulations and the presence of key market players. The increasing demand for coatings in the automotive and general industrial sectors is also driving market growth in this region.

Market Drivers and Challenges

Market Drivers

Stringent Environmental Regulations: Growing concerns about VOC emissions and their impact on air quality and human health have led to stricter regulations worldwide, driving the shift from solvent-based to waterborne coatings.

Increasing Demand for Eco-Friendly Products: Rising consumer awareness regarding environmental sustainability is prompting a greater preference for eco-friendly coatings like waterborne formulations.

Growth in End-Use Industries: Expansion in key end-use industries such as building and construction, automotive, and general industrial is directly fueling the demand for waterborne coatings. Rapid urbanization and infrastructure development, especially in developing economies, are significant contributors.

Technological Advancements: Continuous innovation in resin chemistry and specialty additives has led to the development of high-performance waterborne coatings with improved durability, adhesion, corrosion resistance, and faster drying times.

Government Initiatives and Green Building Certifications: Supportive government policies and the increasing adoption of green building standards are promoting the use of environmentally friendly coatings like waterborne formulations in construction projects.

Market Challenges

Performance Limitations in Certain Applications: While waterborne coatings have significantly improved, they still face challenges in matching the performance of solvent-based coatings in certain demanding applications requiring very high chemical and weather resistance, such as some automotive exterior clearcoats and high-corrosion-resistant coatings.

Higher Application Costs and Expertise: The application of some waterborne systems may require specialized equipment and expertise, potentially leading to higher initial costs.

Impact of Temperature and Humidity: Waterborne coatings can be sensitive to extreme temperatures and humidity during storage and application, affecting their stability, viscosity, and drying characteristics. Freezing temperatures can damage the coating, while high humidity can slow down the evaporation of water, leading to poor curing.

Regulatory Compliance: Navigating the complex and evolving regulatory landscape related to VOC emissions can be challenging for manufacturers.

Market Trends

Bio-based Waterborne Coatings: Increasing focus on sustainability is driving the development and adoption of waterborne coatings derived from renewable resources.

High-Performance Formulations: Ongoing research and development are focused on enhancing the performance characteristics of waterborne coatings to meet the demanding requirements of various industrial applications.

Nanotechnology Integration: The incorporation of nanotechnology is improving properties such as durability, scratch resistance, and UV protection in waterborne coatings.

Smart Coatings: Development of smart waterborne coatings with self-healing, anti-corrosion, and other advanced functionalities is gaining momentum.

Increasing Adoption in Automotive Refinish: The automotive refinish sector is witnessing a growing trend towards the use of waterborne coatings for repair operations due to environmental regulations and improved color matching capabilities.

Future Outlook

The future of the waterborne coatings market looks promising, with sustained growth expected throughout the forecast period. The increasing emphasis on environmental sustainability, coupled with technological advancements and supportive regulations, will continue to drive the demand for waterborne coatings across various industries. While certain performance limitations and application challenges remain, ongoing innovation is expected to address these issues and further expand the application scope of waterborne coatings. The Asia Pacific region will likely remain a key growth engine for the market.

Key Market Study Points

Analysis of market size, growth trends, and forecasts for the period 2023-2031.

Comprehensive segmentation of the market by resin type, application, industry vertical, and region.

Identification of key drivers and challenges influencing market growth.

Examination of emerging market trends and their potential impact.

In-depth regional analysis highlighting growth opportunities and market dynamics in different geographies.

Assessment of the competitive landscape, including key players and their strategies.

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Competitive Landscape

The global waterborne coatings market is characterized by the presence of several large and small players. Key market participants are focusing on research and development activities to introduce innovative and high-performance waterborne coatings. Strategic initiatives such as mergers, acquisitions, expansions, and product launches are also common in this market. Some of the key players in the waterborne coatings market include:

Akzo Nobel N.V.
BASF SE
PPG Industries Inc.
Sherwin-Williams Company
Axalta Coating Systems LLC
Nippon Paint Holdings Co. Ltd.
Kansai Paint Co., Ltd.
RPM International Inc.
Berger Paints India Ltd.
Tikkurila Oyj
Recent Developments

June 2023: AkzoNobel received approval to supply its water-based refinishing products to Porsche China, catering to the growing demand for sustainable automotive refinishing solutions in the region.

April 2023: AkzoNobel announced its intent to acquire Sherwin-Williams' Chinese Decorative Paints division, aligning with its growth strategy in China's Tier 3 to Tier 5 cities.

March 2023: BASF began production of its first bio-based polyol, Sovermol, in India, addressing the increasing demand for environmentally friendly products in the Asia Pacific region for applications including coatings.

January 2023: BYK expanded its production facility in Shanghai, China, to increase the availability of its additives for waterborne coatings.

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