BIODEGRADABLE PLASTICS MARKET ANALYSIS

The global Biodegradable Plastics Market size was valued at US$ 2.23 Billion in 2022 and is anticipated to witness a compound annual growth rate (CAGR) of 13.4% from 2023 to 2030. Biodegradable plastic is a form of plastic that is intended to degrade spontaneously in the environment due to the action of microorganisms such as bacteria and fungus. Unlike regular plastics, which can take hundreds of years to decay, biodegradable polymers can breakdown in a matter of months to a few years. Because of this feature, they are a more sustainable alternative to traditional plastics, since they have a lower environmental effect and can help alleviate the problem of plastic pollution. It is crucial to remember, however, that not all "biodegradable" plastics are genuinely ecologically beneficial, since some may require special circumstances or industrial processing to break down efficiently.

Global Biodegradable Plastics Market: Regional Insights

Based on geography, the global Biodegradable Plastics Market is segmented into North America, Europe, Asia Pacific, Latin America, and Middle East & Africa. Among regions, Europe held a dominant position in the global Biodegradable Plastics Market in 2023, accounting for 53% market share in terms of revenue, followed by North America, and Asia Pacific. The U.S., Canada, and Mexico are three major countries in North America that are experiencing significant growth in the Biodegradable Plastics Market. This growth is attributed to favorable government regulations and environmental awareness among consumers. The demand for biodegradable plastic cups in restaurants and confectionaries is driving the market demand. However, polylactic acid (PLA)-based cups and plastic bags may last a long time, creating significant waste. Biodegradable plastic products require special industrial facilities for decomposition, and the National Zero Waste Council in Vancouver focuses on developing a circular economy for biodegradable plastics. Canada's government lacks a biodegradable standard, and municipal programs are reluctant to decompose plastics, leading to landfills. European countries, such as Germany, Italy, France, Spain, and the UK, are major contributors to the development and production of bio plastics. Europe is adopting bio plastics over conventional plastic to transform into a proper waste management region. The European association promotes government and environmental policies regarding sustainability and bio-degradability, which drives the growth of the Biodegradable Plastics Market in Europe. In the Asia-Pacific region, China, Japan, and India are major countries involved in the production and development of bio plastic. China is one of the largest markets for biodegradable plastic due to its abundant bio plastic feedstock. Increased oil prices and climatic conditions encourage government, private companies, and the public to use bio based chemicals products in this region.

Figure 1: Global Biodegradable Plastics Market Market Revenue Share (%), By Region, 2023

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Global Biodegradable Plastics Market Drivers:

Eco-friendly nature and rise in consumer adoption of biodegradable plastics

Biodegradable plastics have the potential to reduce carbon dioxide emission by 30%-70%, as compared to conventional synthetic plastic. On the other hand, it does not adversely affect the environment, as the material does not have any toxicity and degrades easily. Moreover, the greenhouse gas emission of bio plastic is minimal during the time of degradation. Biodegradable plastic represents 42% reduction in carbon footprints. Owing to these advanced technical properties and functionalities, leading companies, such as Coca Cola, Nestle, Nike, and Ford are exhibiting their interest toward the production and usage of bio based biodegradable plastic materials, across various applications.

Increase in consumer awareness about the usage of sustainable products linked with rapid environmental concerns, such as global warming is driving the adoption of bio-based and biodegradable plastic materials. The preference of the users for bio plastics is increasing across various applications, such as catering, packaging, agriculture, and automotive. Biodegradable plastics are suitable material for organic farming. Farmers are using biodegradable mulching films in agriculture and horticulture. They use biodegradable plant pots, and fertilizer rods, which decompose within the earth’s surface. Consumers prefer to use bio plastic packaging material over synthetic plastic packaging, since it is capable of being decomposed with food. Factors such as high biodegradation, zero toxicity, environmentally free, and direct substitute to conventional plastic are favoring use of biodegradable plastic and have emerged as the major growth drivers in this market.

High demand of biodegradable plastic in food packaging application

The use of this plastic is being replaced by the plastic which is decomposable, biodegradable, environment friendly and has less toxic effects. Demand for biodegradable plastic is on the rise due to elimination of single use plastic across the globe. With the help of biomass residues, biodegradable plastics produce wide range of packaging products such as bottles, loose-fill, cups, pots, bowls, flexible films, and others. Demand for edible films and coatings is growing at a rapid pace and is contributing in the overall market growth. The adoption of biodegradable plastic in meat products, ready meal, and dairy products is picking a momentum, which probably is the major area wherein high growth is anticipated. Need for sustainable packaging is increasing day by day with ongoing growth in population and rapid demographic and lifestyle changes. Biodegradable plastic is expected to be the suitable solution for this complex scenario and hence, demand for biodegradable plastic is expected to witness promising growth opportunities over the coming years.

Favorable Government Policies towards bio plastic

Government bodies across the world are adopting favorable regulations and policies to promote sustainability and biodegradability of bio plastics. These are some of the key factors that boost this market. The European Union is one of the major political advocators of the bio plastics market. In Europe, policy makers formulate environmental policies to create awareness among consumers. Besides, they are also formulating R&D programs to boost the production of bio based and biodegradable plastic in the region. Furthermore, national governments in various European countries also promote the usage/application of sustainable material. Governments in Asia and Europe have formulated certain stringent policies, which are expected to favor the growth of the bio plastic industry material.

For instance, Japan has now focused on achieving at least 20% usage of bio plastics by 2020. According to the recently implemented waste management program, the government of Singapore advises the recycling of plastic waste besides other solid and municipality waste. This factor collectively influences the demand for bio plastic wherein biodegradable plastic is major type. Hence, increase in demand for bio plastic further drives the demand for biodegradable plastic as well.

Global Biodegradable Plastics Market Opportunities:

Rise in CSR activities and decreasing dependence on petroleum resource

With rise in environmental concerns among consumers, companies are moving toward sustainable and eco- friendly alternatives for developing and strengthening their brand image. For instance, leading companies, such as Coca Cola and PepsiCo are focusing on the use of bio-based PLA, PSA, and other bottles for beverage packaging. On the other hand, the high price of bio plastics is a major factor, restraining the industry growth. This issue can be resolved with the volatility in crude oil price, which results in a price raise in petro plastic. Moreover, this issue can be resolved with the decrease in dependence on petroleum resources and advancement in R&D. The industry, with a healthy capital base and good infrastructure is projected to adopt forward integration strategy to create their own value chain. The “green” PET bottle developed by PepsiCo. Is 100% bio-based and has identical molecular structure. Apart from this, due to advancement in the R&D there are few PLA and PBAT based products for food packaging that are being developed. Shifting focus from petroleum to bio based resources is expected to offer extensive growth opportunities over the coming years.

Global Biodegradable Plastics Market Trends:

Rise in popularity of biodegradable mulch film

Growing consumption of functional beverages, bakery products, and confectionery is augmenting the biodegradable mulch film is becoming more popular than traditional plastic films. This is attributed to many factors that indicate the market for biodegradable mulch film is developing due to greater decomposition in the soil. It is estimated that 75%-80% content in the mulch film is renewable and its use is increasing. Mulch films are made of renewable material which also contains substantial fossil content. New types of mulch films with minimal content of fossil material are being developed and are expected to be introduced in several years.

Mulch film is expected to witness growing demand as it is used in vegetable and strawberry cultivation and is laid for one season before it is removed. Biodegradable plastics are largely used in mulching films as they can simply be ploughed into the soil after use and need not be separated from organic matter. The market for biodegradable plastic for agricultural films is developing moderately and introduction of mulch films with majority of renewable content is expected to make way for growth opportunities in the market.

Polylactic Acid acting as alternative to traditional fossil

After starch blend, Polylactic Acid (PLA) is the major type of biodegradable bio plastic preferred largely as it is relatively cost effective and suitable for large number of packaging needs. It has emerged as an alternative to traditional fossil based plastic more specifically polyethylene terephthalate (PET) and to other plastic as well. PLA is approved and recommended plastic packaging material by various food regulatory bodies and authorities, making it highly suitable in various food packaging applications. PLA is transparent in appearance, which makes it desirable for packaging, wherein, product can be easily visible to consumers. PLA is a breathable material and ideal for food packaging that requires oxygen, for example salad leaves. Therefore, PLA is majorly a food packaging material and growing sustainable packaging needs is mainly driving its consumption.

Global Biodegradable Plastics Market Restraints:

High cost of biodegradable plastic

High cost of biodegradable products is one of the biggest issues associated with the global Biodegradable Plastics Market. At present, biodegradable products are more than twice expensive as compared tithe conventional petroleum plastics. This is mainly due to the high R&D cost, high cost of polymer plant construction, high cost of raw materials, and small production scale.

The manufacturers are spending a huge amount of capital to enhance the R&D for increase in production efficiency. Some biodegradable plastic resins are expected to achieve price parity with conventional plastics with the rise in petroleum costs. The average cost of conventional plastic resin is around $1.2/Kg, however, biodegradable resin costs around $3.1/Kg. High prices of the resin is further expected to challenge the overall market growth.

Global Biodegradable Plastics Market Segmentation:

The Global Biodegradable Plastics Market report is segmented by application, packaging, consumer durables, agriculture, others and textile. Out of which, packaging is expected to dominate the global market over the forecast period. The packaging segment was valued at USD 1.70 billion in 2023 and is projected to register a 13.4% CAGR during the review period. Packaging industry has large applications of biodegradable plastic. It is used to manufacture large number of products including bottles, loose-fill, cups, pots, bowls, flexible films, and other products. There is an increase in the popularity of biodegradable plastic due its flexibility and eco-friendly nature. Some of the bio based biodegradable plastics such as PLA and starch blends are very economical in nature, and are mostly used in flexible and rigid packaging applications.

Figure 2: Global Biodegradable Plastics Market Revenue Share (%), By Application, 2023

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Global Biodegradable Plastics Market: Key Developments

• On April 2021, NatureWorks a manufactures of bio plastics announced a partnership with IMA Coffee. IMA coffee is involved in packaging designs and manufactures soft and hard pods machines, this partnership’s objective is to increase the market reach for high-performing compostable K-cup in North America.
• On 9 February 2022, Bioplastics International introduced water-soluble PVA. The material is developed to be used as a replacement to plastics. It can be used for manufacturing water-soluble PVA bags and packaging films. The material is being used in the healthcare sector for drug delivery systems, artificial organs, wound management, and contact lenses owing to its biodegradability, biocompatibility, and non-toxicity.
• On 25 January 2022, TerraVerdae Bioworks announced the acquisition of PolyFerm Canada. The acquisition main objective was to at enhance the company’s PHA technology portfolio. The acquisition allowed the company to develop advanced biodegradable bio plastic products to cater to the growing biodegradable plastics market demand for sustainable alternatives to products.
• On January 2022, Vikas Ecotech Limited announced an investment in environment-friendly Bio Plastics (PHA) technology. The company is also in the process of collaborating with Aurapha Private Ltd. for the manufacturing of biodegradable plastics. PHAs would be manufactured using renewable resources and will be bio-degradable in nature.

Global Biodegradable Plastics Market: Key Companies Insights

The Global Biodegradable Plastics Market is highly competitive. This is attributed to continuous launch of new technologies due to ongoing R &D and efforts by value chain participants. Moreover, key players are adopting various business growth strategies in order to expand their presence on regional as well as global basis. Some of the key players in the Global Biodegradable Plastics Market are Basf Se, Corbion N.V., Danimer Scientific, Dow Inc., Eastman Chemical Company, Kuraray Co., Ltd., and Mitsubishi Chemical Holdings, Novamont S.P.A, Ptt Global Chemical Company Limited.

*Definition: Biodegradable plastic is a form of plastic that, under specific conditions, may degrade spontaneously into harmless compounds. This process is often carried out by microorganisms such as bacteria or fungus, which devour the plastic and transform it into simpler molecules. Biodegradable plastics are frequently manufactured from organic elements that are more easily broken down by microbes, such as cornflour or vegetable oils. The key advantage of biodegradable plastics is that they have a lower environmental effect since they do not collect in landfills or marine environments for extended periods of time. However, not all biodegradable polymers are created equal, and some may require particular conditions, such as industrial composting facilities, to degrade adequately.