Biobased Biodegradable Plastics Market size is expected to reach a value of US$31.2 billion by 2027 after growing at a CAGR of 19.8% during the forecast period from 2022-2027. Bio-based biodegradable plastic can degrade by naturally occurring microorganisms such as bacteria, fungi, biomass, and inorganic compounds. Biobased biodegradable plastic is made of polylactic acid, polyhydroxyalkanoate, polycaprolactone, starch, and other biomaterials which are used for packaging, crockery, food cutlery, and containers. Thus, there is increase in demand for biobased biodegradable plastics in various end-use industries such as food packaging and consumer goods. This is one of the major factors driving the biobased biodegradable plastics industry growth. Biobased polyethylene offers various characteristics such as flexibility, durability, printability, transparency, barrier, heat resistance, and gloss. Owing to such properties, biobased biodegradable plastics are widely used in the packaging industry which is expected to grow at a significant rate for the biobased biodegradable plastics market during the forecast period.
COVID-19 impact
During the 2020-Q2 of 2021, the Covid-19 pandemic was at its peak, the electronics industry was dropped which highly affected the market scenario. Bioplastics are temperature resistant and are helping to keep the products lightweight and durable. Thus it is used in various applications including touch screen computer casings, loudspeakers, headphones, keyboards, mobile phone casings, laptops, games consoles, and vacuum cleaners. But during the COVID pandemic, the electronics sector was closed which is reducing the demand for biodegradable plastics. According to the China Academy of Information and Communications Technology (CAICT), smartphone market sales dropped 10% in May 2020 to 32.6 million, and 16% in June 2020 to 27.7 million. However, the biobased biodegradable plastics demand was hugely affected in terms of consumption for electrical components which is limiting the market growth.
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Biobased Biodegradable Plastics Market Analysis – By Product Type
Polylactic acid held the largest share of more than 35% in the biobased biodegradable plastics market in 2021. Polylactic acid is a thermoplastic polyester that has high mechanical strength, high modulus bio absorbability, transparency, low toxicity; thus, it is an excellent biobased product in antimicrobial packaging. Food and Drug Administration (FDA) accepted polylactic acid as generally recognized as safe (GRAS) due to low toxicity. According to the Europe Bioplastic, the global production of polylactic acid was 13.9% in 2019. Polylactic acid offers various properties including degradability, biocompatibility, and recyclability which makes them the ideal solution for packing cups, food containers, and dairy products. In November 2020, Sulzer Chemtech supported B&F polylactic acid (PLA) to develop China’s first fully integrated sugar-to-PLA (polylactic acid) plant located in Bengbu, Anhui Province. This plant can produce 30,000 metric tons of PLA per year. This will further drive the biobased biodegradable plastic industry.
Biobased Biodegradable Plastics Market Analysis – By Source
Corn starch held the largest share of more than 30% in the biobased biodegradable plastics market in 2021. Biobased biodegradable plastics are produced using a mixture of corn starch which was heated to give a good yield. Thus, these are can be easily generated in homes without any higher professional assistance and could be manufactured on a large scale. Biodegradable biobased plastic such as polylactic acid and PBS is produced from corn starch. Mitsubishi Chemical Corporation is producing polybutylene succinate (PBS) products with the use of corn starch. Its PBS plant is located in Rayong, Thailand, with an annual capacity of 30,000 tonnes. In 2020, BASF announced a collaboration with Chinese chemical manufacturer Red Avenue New Materials Group, which planned to build another 60,000 tonnes plant in Shanghai, China. This plant will increase the production capacity by 200,000 tonnes of PBS annually. Hence, due to such factors, the demand for corn starch is rapidly growing which is also growing the biobased biodegradable plastic industry growth.
Biobased Biodegradable Plastics Market Analysis – By Application
The packaging sector held the largest share of more than 45% in the biobased biodegradable plastics market in the year 2021. Biobased biodegradable plastics are used to reduce the impact of waste on the environment and are being used in applications such as thermoformed coffee cup lids, disposable cutlery and plates, and food containers. Biodegradable plastics are also used in food packaging applications to protect the food from the environment and maintain food quality. According to Europe Bioplastic, the packaging sector (rigid and soft) is still the leader with more than 47% of the market shares in 2020. In 2020, Toppan Printing has launched new eco-friendly packaging that maintained the quality of meat, processed seafood, and other primary products kept in frozen storage for a long time. According to Eurostat, in Europe, dairy products and soft drinks export 16,203 euros million (US$ 18.51 billion) and 5,650 euros million (US$ 6.45 billion) in 2020, an increase of 3% and 2%during 2019-2020, respectively. Hence, the growing packaging sector is expected to propel the biobased biodegradable plastic industry growth.
Biobased Biodegradable Plastics Market Analysis – By Geography
Asia Pacific region held the largest share of more than 40% in the biobased biodegradable plastics market size in the year 2021, due to the increasing demand from various end-use industries such as the packaging industry in Asian countries including India and China which are estimated to grow the demand for biobased biodegradable plastics. According to the China Food Industry (CFI), almost 15,00 tonnes of fresh food and 3 million bottles of soap were sold in 2020. In 2020, the Indian Government has approved Rs. 320.33 crore (US$ 43.24 million) to implement 28 food processing projects. According to the National Investment Promotion Facilitation Agency, in India, the food processing sector is forecast to reach US$ 535 billion by 2025-2026. According to the United States Department of Agriculture, In 2019, Japan’s food processing industry manufactured US$219.7 billion of food and beverage products as compared to US$216.8 billion in 2018. Hence, all such factors are growing demand for biobased biodegradable plastics in the region.
Biobased Biodegradable Plastics Market Drivers
The growing demand from Packaging Industry
Biobased biodegradable plastics such as starch and polylactic acids are used in the packaging of food and beverages as they have no harmful chemicals. Starch-based biodegradable plastic is used in the packaging of peanuts. Polylactic acid is suitable for short-life packaging products such as yogurt cups, fruit, vegetable, and meat trays. According to Europe Bioplastic, the worldwide production capacities for bioplastics will increase to around 6.1 million tons by 2021. In 2019, around 1.8 million tons are accounted for plastic packagings such as films, bags, carrier bags, sacks, or disposable cutlery and dishes. The packaging sector holds the largest share of biobased biodegradable plastic more than 53% of the total bioplastics market in 2019. In January 2019, Nestlé and Danimer Scientific announced a global partnership to produce biodegradable bottles which are protected to foster the biobased biodegradable plastic industry growth.
Growing Government initiatives for reducing the Greenhouse Emission
Biodegradable biobased plastic is produced from renewable resources such as corn starch, potatoes, rice, soy, sugarcane, wheat, and vegetable oil. Polylactic acid helps to reduce greenhouse gases. Thus, the growing government initiatives to reduce greenhouse emission is also growing the demand for bio-based biodegradable plastic products. In June 2019, the UK became the first key economy in the world to pass laws to end its contribution to global warming by 2050. The target will require the UK to cut down all greenhouse gas emissions to net-zero by 2050. In 2021, Administrator Samantha Power announced a major new initiative to reduce global greenhouse gas emissions. The United States Agency for International Development (USAID) will support to prevention of 6 billion metric tons of carbon dioxide equivalent emissions by 2030. In 2019, Colorado enacted comprehensive climate legislation directing the state Air Quality Control Commission is implementing regulations to reduce greenhouse gas emissions reductions 26% by 2025, 50% by 2030, and 90% by 2050. This will further drive the biobased biodegradable plastic industry.
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Biobased Biodegradable Plastics Market Challenges
High Cost of Biobased Biodegradable Plastic Products Type
PLA is used for eco-friendly food packaging as they maintain food quality. But the cost of polylactic acid is higher than comparable materials. Polylactic acid is 20%-50% more costly than comparable materials because of the complex process used to convert corn starch or sugarcane into the building blocks for PLA. In addition, 1,4-butanediol is used for the production of polybutylene adipate co-terephthalate (PBAT). The price of 1,4-butanediol has risen from more than 7,000 RMB/ton to more than 30,000 RMB/ton. In 2021, the price of PBAT is 35,000 RMB /ton. Hence, the high cost of bioplastic products may create hurdles for the consumption of biobased biodegradable plastic.
Biobased Biodegradable Plastics Industry Outlook
Technology launches, acquisitions, and R&D activities are key strategies adopted by players in this market. Biobased Biodegradable Plastics top 10 companies include:
BASF SE
Total Corbion
Biome Bioplastics
Mitsubishi Chemical Holding Corporation
Toray Industries (Japan), Plantic Technologies
Danimer Scientific
Corbion
DOW
Metabolix Inc
Natureworks, and more.
Recent DevelopmentsI
In 2020, BASF and Fabbri Group have developed a sustainable solution for cling film used in fresh-food packaging. This will help to boost the demand for biobased biodegradable plastics.In May 2019, BASF and Lactips signed an exclusive contract to market Lactips’ water-soluble, bio-based, and fully biodegradable material. The solution of Lactips aims at the replacement of polyvinyl alcohol films in-home care and I&I applications, such as dishwasher tabs.
Key Takeaways
The Asia Pacific held the largest share in the biobased biodegradable plastics market owing to increasing demand for packaging applications such as food & beverages, consumer goods, and electrical components.
Increasing adoption of biobased biodegradable plastics as they can reduce pollution in a very real way. Biobased plastic is an alternative to conventional plastic which is estimated to boost the consumption of this plastic.
According Food and Drug Administration (FDA) polylactic acid can be for food packagings such as fruit and vegetables due to its environmental nature and sustainability which is also creating growth for the biobased biodegradable plastics industry.
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