Report Outlines Government Incentives Critical to Helping Businesses Scale Sustainable Chemicals
On April 22, 2026, Change Chemistry and the Sustainable Chemistry Catalyst at the University of Massachusetts Lowell published a report entitled Incentivizing Sustainable Chemicals: A Policy Framework for Innovation, Manufacturing, and Market Transformation, outlining why government incentives are critical to helping businesses scale more sustainable chemicals and how those incentives can reduce risk, unlock investment, and enable real market adoption. More than 50 U.S. and European companies across sectors and the full chemicals value chain collaborated to identify barriers to sustainable chemistry innovation, adoption, and market transformation and to explore how targeted government policy incentives could address those barriers. The resulting framework is designed to inform policy development across jurisdictions and to encourage coordination among governments, investors, and the private sector to magnify impacts. The framework identifies six types of policy incentives that could help accelerate the pace of both innovation and market adoption for more sustainable chemicals. Supply-push incentives, which support technologies and capacities, include:
- Industrial and research and development (R&D) grants to provide early-stage support;
- Subsidies to facilitate investment in infrastructure; and
- Tax incentives to lower the cost of process inputs.
Demand-pull incentives, which drive scale, adoption, and revenue, include:
- Market support and derisking to create or secure demands;
- Preferential purchasing to build market confidence; and
- Regulatory incentives to accelerate the path to market.
The report states that given that most policy incentives rely on public funds with competing priorities, governments need to select strategically among incentive types or concentrate a more robust set of incentives on targeted sustainable chemistry priorities to support innovation, adoption, and market transformation most effectively. The report notes that while the framework is comprehensive in scope, it can also be applied selectively to guide incentive choices aligned with specific policy goals and to leverage government signaling to catalyze private investment.