Sustainable Tire Market

Sustainable Tire Market

The global sustainable tire market is valued at USD 0.12 billion in 2024 and is projected to reach USD 0.39 billion by 2029, growing at 27.3% cagr from 2024 to 2029. The major factors driving the market growth are rising environmental concerns and changing consumer preferences. With the growing consumer awareness about climate change and the depletion of natural resources, the demand for eco-friendly products has increased in various industries, particularly automotive. Governments across the globe are enforcing strict environmental regulations to reduce carbon emissions and promote sustainability measures. These regulations are forcing tire manufacturers to research and introduce green materials, such as bio-based rubbers, recycled materials, and low-emission materials. Besides, the demand for green vehicles with tires made of sustainable tires is growing. The promotion of electric cars is accelerating this trend because these cars need a different class of wheels with low rolling resistance and maximum efficiency.

To know about the assumptions considered for the study, Request for Free Sample Report

Attractive Opportunities In Sustainable Tire Market

Market Dynamics

Driver: Implementation of strict environmental regulations and carbon neutrality goals

The implementation of stringent environmental laws and carbon neutrality goals are driving the growth of the sustainable tire market. Most governments and international bodies strive to control climate change and implement the circular economy concept by drafting high standards and management policies related to emissions. These efforts are forcing manufacturers to develop technologies that put ecologically sensitive materials at a premium in tire manufacturing, from the use of bio-based rubber to recycled materials and low-emission alternatives. State governments and corporations are establishing carbon neutrality goals for the automotive industry, supporting sustainability-led developments. The targets can only be accomplished when the entire supply chain of the automotive industry has a lower carbon footprint and tire production forms part of the broader chain. Factors driving the demand for sustainable tire are the growing need for lowering emissions and the adoption of sustainable practices to reduce greenhouse gas emissions and natural resource conservation. Therefore, the rising emphasis on reducing environmental degradation is expected to drive market growth during the forecast period.

Restraint: Limited raw material availability

One of the major restraints to the growth of the sustainable tire market is limited raw material availability, adversely impacting the production and scalability of “green” tires. Most sustainable materials such as natural rubber, sustainable carbon black, silica, bio-based polymers, and recycled materials are derived from certain, at times scarce, resources. For instance, natural rubber is harvested mainly from rubber trees, a crop highly vulnerable to diseases, changing climatic conditions, and agricultural yield fluctuations. On the other hand, bio-based materials are dependent on agricultural input that could compete with food production and generally cause supply problems. Lastly, the supply of recycled materials is limited by the size and efficiency of the recycling processes, which cannot match the demand for sustainable tires driven by current growth. This scarcity consequently drives costs and makes it hard to make sustainable tires cost-effectively. The limited availability of major raw materials thus hampers the market’s growth and transition to sustainable tire solutions.

Opportunity: Rising environmental awareness and government-led support and initiatives to promote use of green materials

Increased consumer awareness and government support are creating lucrative opportunities for the players in the sustainable tire market. The growing consumer consciousness toward the environment and rising demand for greener products is fueling the demand for sustainable tires. Their growing demand is driving manufacturers to invest in innovations in green materials, such as recycled rubber and bio-based polymers, to reduce the environmental impact. Government-led initiatives such as incentives, subsidies, and implementation of regulations & policies that favor the use of green materials are also driving the demand for sustainable tire. The requisite legislation in terms of mandates on tire recycling and reducing carbon emissions are also forcing manufacturers to adopt green processes. All these factors are creating a positive environment for green tires, increasing their market share and investment opportunities. This constructive collaboration of consumer demand with regulatory support is boosting the adoption of sustainable ways for manufacturing tires.

Challenge: High production cost

The production of sustainable tires is expensive. Most of the materials used to make sustainable tires, such as recycled rubber, bio-based polymer materials, and new composites, are costly in terms of raw materials compared with conventional ones. In addition, they require a more complex processing method. This could further act as a barrier to investments in developing innovative, sustainable technologies. This challenge could be tackled by improving production efficiency and technology scaling.

Moreover, high production costs can restrict investments in sustainable technologies and considerably reduce the potential for small-scale or growing companies to effectively compete on equal grounds.

Sustainable Tire Market Ecosystem

A market ecosystem refers to the interconnected network of businesses, consumers, suppliers, and regulators in a particular market, influencing and interacting with each other. The key participants in the sustainable tire ecosystem include Evonik Industries AG (Germany), Solvay (Belgium), Cabot Corporation (US), Birla Carbon (India), Orion (Luxembourg), GRP LTD (India), GENAN HOLDING A/S (Denmark), Lehigh Technologies, Inc., (US), PPG Industries, Inc. (US), and Jiangxi black cat carbon black Co., Ltd (China).

Source: Secondary Research, Interviews with Experts, and MarketsandMarkets Analysis

By material type, rubber segment to hold largest share of sustainable tire market during forecast period, in terms of value

The rubber segment is expected to hold the largest share of the sustainable tire market during the forecast period. Rubber exhibits properties such as elasticity, strength, and durability, which are needed to enhance tire performance.

Innovations in the rubber industry, such as recycled and bio-based rubber materials, have been outstanding. Recycled rubber, recovered from used tires, reduces waste and decreases the use of virgin materials. Bio-based rubber derived from natural sources such as guayule or dandelion is a renewable replacement for traditional synthetic rubber. Although sustainable carbon black and silica are critical, their use can be more specific toward enhancing rubber’s reinforcement or heat resistance properties. The widening application scope and continuous enhancements in the rubber industry are driving the growth of the rubber segment in the sustainable tire market.

By vehicle type, commercial vehicles segment accounted for the largest share of sustainable tire market during forecast period, in terms of value

The commercial vehicles segment is expected to lead the sustainable tire market during the forecast period. The segment’s growth can be attributed to the rising requirement for durable and high-performance materials in the manufacturing of commercial vehicle tires to increase their operational life and efficiency. Environmentally friendly materials made from recycled rubber or bio-based materials fulfill the industry goals of reducing environmental impact while maintaining performance levels. Regulatory pressures and corporate sustainability initiatives within the commercial sector drive the adoption of environmentally friendly tires. These factors drive the growth of the commercial vehicles segment, where the demand for high performance and sustainability is high.

By propulsion type, internal combustion engine vehicles segment to account for largest share of sustainable tire market during forecast period, in terms of value

The sustainable tire market for the internal combustion engine vehicles segment is expected to grow significantly during the forecast period. Internal combustion engine (ICE) vehicles outnumber electric vehicles (EVs) and have a larger installed base. The share of EVs in the global fleet is small; therefore, the demand for replacement and up-gradation of tires is high in the internal combustion engine vehicles segment. The ICE vehicle industry, forming the major share of the automotive sector, is expected to create a high demand for sustainable tire and drive the growth of the combustion engine vehicles segment.

By structure, radial segment to account for largest share of the sustainable tire market during forecast period, in terms of value

Radial tires offer superior performance characteristics and are suitable for incorporating sustainable materials. With their radial ply construction, the layers of the tire extend radially from the center. Compared with bias tires, whose layers are oriented in a diagonal pattern, radial tires provide better fuel economy, improve durability, and increase riding comfort. These performance advantages merge favorably with sustainability objectives by reducing vehicle emissions and prolonging tire life span, reducing waste generation. All these factors are driving the demand for radial tires and the segment’s growth.

By sales channel, OEMS segment to account for largest share of the sustainable tire market during forecast period, in terms of value

OEMs are the major stakeholders in any vehicle manufacturing from the beginning phase. Choosing tires is critical in the vehicle’s overall design. Sustainable tires are eco-friendly vehicle components. OEMs adopt and standardize sustainable tires to ensure that the vehicles meet both performance standards and regulatory requirements. Vehicle manufacturers usually establish long-term contracts with tire suppliers to ensure stable and consistent demand for sustainable tires. OEMs completely control the production and let the aftermarket serve as the main channel for the diffusion of sustainable tire. All these factors are expected to drive the growth of the OEMS segment during the forecast period.

Asia Pacific to be largest market for sustainable tire during forecast period.

Asia Pacific is expected to hold the largest share of the sustainable tire market during the forecast period. Increased automobile production is fueling the demand for tires. China, India, and Japan are some of the major manufacturers and consumers of sustainable tires due to their fast-growing economies and expanding middle-class population. Governments in this region are drafting policies and providing incentives for safeguarding eco-friendly technologies. They are highly focused on reducing pollution and managing resources. All these factors are expected to drive the demand for sustainable tire and boost the regional market growth during the forecast period.

To know about the assumptions considered for the study, download the pdf brochure

Sustainable Tire Market Players

Key players in this market include Evonik Industries AG (Germany), Solvay (Belgium), Cabot Corporation (US), Birla Carbon (India), Orion (Luxembourg), GRP LTD (India), GENAN HOLDING A/S (Denmark), Lehigh Technologies, Inc., (US), PPG Industries, Inc. (US), and Jiangxi black cat carbon black Co., Ltd (China). Product launches, mergers, acquisitions, agreements, and expansions are vital in market growth. Leading manufacturers of sustainable tire have opted for product launches and technological advancements to sustain their market position.

Sustainable Tire Market Report Scope

Segmentation

This report categorizes the global sustainable tire market based on material type, propulsion type, vehicle type, structure, sales channel and region

On the basis of material type , the market has been segmented as follows:

• Rubber
• Sustainable Carbon Black
• Silica
• Others Material Types

On the basis of propulsion type, the market has been segmented as follows:

• Internal Combustion Engine Vehicles
• Electric Vehicles

On the basis of vehicle type, the market has been segmented as follows:

• Passenger Vehicles
• Commercial Vehicles

On the basis of structure, the market has been segmented as follows:

• Radial
• Bias

On the basis of sales channel, the market has been segmented as follows:

• Aftermarket
• OEM’s

On the basis of region, the market has been segmented as follows:

• North America
• Europe
• Asia Pacific
• Middle East & Africa
• South America

Recent Developments

• In 2024, Orion, a global specialty chemicals firm, announced an investment in Alpha Carbone, a tire recycling company in France, through which Alpha Carbone will bring to market commercial quantities of tire pyrolysis oil and recovered carbon black.
• In May 2024, Cabot Corporation introduced its new REPLASBLAK® universal circular black masterbatches manufactured with certified sustainable materials. The launch of two industry-leading products as part of this new product line represents the world’s first universal circular black masterbatches with ISCC PLUS-certified content. The new REPLASBLAK masterbatches further enable Cabot to continue delivering high quality and reliability the plastics and automotive industries demand with EVOLVE® Sustainable Solutions certified as circular at scale.
• In January 2024, it was announced that Birla Carbon would lead in sustainable carbon solutions by developing two new carbon black manufacturing facilities at Naidupet, Andhra Pradesh, India, and Rayong, Thailand.
• In January 2024, Evonik Industries AG increased the production capacity of precipitated silica by 50% in its Charleston site in the US. The investment is part of the company’s plan to extend production capabilities in the country.

Frequently Asked Questions (FAQ):

To speak to our analyst for a discussion on the above findings, click Speak to Analyst