In the 1967 film, The Graduate, Mr. McGuire used one word to forecast market trends for an impressionable recent college graduate: “Plastics.” If the film were to be updated for 21st century audiences, it would need two words to describe the promising future: “Biodegradable Plastics.” Biodegradable plastics is a double-digit growth industry coming into its own from increased regulations and bans against plastic bags and other single-use plastic items. Concerns about plastic waste in the environment are contributing to demand for biodegradable plastics worldwide.
A new analysis from IHS Markit reports that the current market value of biodegradable plastics exceeds $1.1 billion in 2018 and could reach $1.7 billion by 2023. These plastics — known more precisely as biodegradable or compostable polymers — are bio-based or fossil-fuel-based chemical compositions that undergo microbial decomposition to carbon dioxide and water in industrial or municipal compost facilities. A few of these polymers have the capacity to decompose in backyard compost bins or in soil, freshwater, or saltwater.
Two market segments are driving the surge:
- The food packaging, disposable tableware (cups, plates, and cutlery), and bags sector is the largest end-use segment and the major growth driver for biodegradable polymer consumption.
- Compost bags are the second most important end-use for biodegradable polymers.
“Biodegradable plastics, which are largely starch-based compounds or polylactic acid (PLA)-based materials, have become more cost-competitive with petroleum-based plastics, and the demand is growing significantly, particularly in Western Europe, where environmental regulations are the strictest,” said Marifaith Hackett, director, specialty chemicals research at IHS Markit and the report’s lead author. “However, the demand for these biodegradable polymers is still a drop in the bucket when you compare it to demand for traditional plastics such as polyethylene.”
The biodegradable polymers industry is affected by solid-waste disposal patterns, existing and potential legislation, and consumer attitudes and behavior. The evolution of these environmental factors and their impact on the biodegradable polymers industry differ in each region of the world.
Western Europe Leads Biodegradable Plastics Push
Consumer awareness of sustainable plastic solutions, government interest in the reduction of greenhouse gas emissions, and a pervasive general desire to eliminate fossil fuel independence all contribute to market growth of biodegradable plastics. Nowhere is this more evident than in Western Europe, as multiple household and business products are now being manufactured using biodegradable plastics, such as:
- Foam packaging, which includes starch-based loose-fill packaging — packing peanuts
- Mulch films and other agricultural applications
- Paper coatings for cups and cartons
- Textiles and nonwoven fabrics
- Resorbable medical devices such as sutures and implants
- Downhole tools for oil and gas field operations
- 3-D printing filament.
Western Europe, with the world’s strictest and increasingly stringent regulations for single-use plastics, commands 55% of the global market value in 2018 for these specialty biodegradable polymers, followed by Asia and Australia/ New Zealand at 25%, then North America at 19%. The rest of the world combined for less than 1% of consumption demand.
“More legislation is likely coming in Europe or at the EU level, and, if that occurs, we could see major changes in this industry and pushback from producers of traditional plastic products,” Hackett said. “Due to legislation, Europe is by far the leading demand center. Europe is the place to watch, as Europeans are particularly motivated to reduce marine litter.” Over time, plastic breaks down into tiny particles called micro-plastics, which are found on shorelines and in the systems of marine animals around the world.
Another reason that Western Europe leads the way in biodegradable plastics is that their landfill disposal costs — calculated by adding together landfill gate fees plus landfill taxes — are substantially higher than those in Central and Eastern Europe and North America. Italy and France, moreover, have plastic bag bans, packaging waste directives with recovery and recycling targets, and other collection/ waste disposal laws that seek to avoid landfill.
“The properties and processability of biodegradable polymers have improved, allowing the use of these materials in a broader range of applications, but legislation is the single most important demand driver for these plastics,” Hackett said.
What’s Changed in Biodegradable Plastics Demand
In 2018, global demand for these polymers is 360,000 metric tons, but total consumption of biodegradable polymers is expected to increase to almost 550,000 metric tons by 2023. That will represent an average annual growth rate of 9% for the 5-year period, which is equivalent to a volume increase of more than 50% from 2018 to 2023.
Hackett also noted that biodegradable polymer use has grown more slowly or stagnated in places that lack mandates. “Growing consumer awareness and activism regarding environmental issues could certainly increase the market for biodegradable plastics,” she said. “To truly capture the benefits of these biodegradable polymers, however, you need to have the collection and composting infrastructure to support their use. Very few major cities or municipalities currently have the necessary infrastructure in place.”
An important distinction needs to be made between the potential for biodegradable polymers and their actual decomposition. Biodegradable polymers are compostable only in special industrial composting facilities, which operate at higher temperatures than home compost piles.
“Only a subset of biodegradable polymers is compostable in backyard compost bins; an even smaller subset is compostable in the soil or in marine environments,” Hackett illuminated. Indeed, composting of plastics waste was negligible as recently as 2014. Landfill was the primary method of disposal, responsible for 75% of plastics waste in the US. Combustion with energy recovery was 15%, and recycling accounted for 9% of the remainder.
“Biodegradable or compostable polymers can play a role in diverting waste from landfills. For example, biodegradable pods for single-serve coffee makers simplify disposal of used capsules; compostable trash bags can control odors, minimize mess, discourage pests, and otherwise reduce the ‘yuck’ factor associated with residential composting programs,” Hackett said. “Diverting organic waste from landfill reduces emissions of methane—which is a potent greenhouse gas.” The key to mass advancement and adoption of biodegradable or compostable plastics is a combination of legislation, consumer attitudes, and behavior.
The major manufacturers of biodegradable polymers include NatureWorks (a joint venture of Cargill and PTT Global Chemical), Novamont, BASF, and PTT MCC Biochem Co., Ltd., a joint venture of PTT Public Company Ltd. (the parent of PTT Global Chemical) and Mitsubishi Chemical Corporation.