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World consumption of biodegradable polymers (by region).
World consumption of biodegradable polymers (by region).

Led by Western Europe, increasing regulations and bans against plastic bags and other single-use plastic items are driving growing demand for biodegradable plastics, according to new report from IHS Markit. The current market value of biodegradable plastics exceeds US$1.1 billion in 2018, but could reach US$1.7 billion by 2023, the report said.

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, representing an average annual growth rate of 9% for the five-year period, which is equivalent to a volume increase of more than 50% from 2018 to 2023.

F&B is the largest end-use segment

The food packaging, disposable tableware (cups, plates, and cutlery) and bags sector is the largest end-use segment, as well as the major growth driver for biodegradable polymer consumption.

This segment will benefit from local restrictions on plastic shopping bags and will achieve double-digit growth. Compost bags are the second most important end-use for biodegradable polymers.

This market segment will experience strong growth thanks to the gradual expansion of composting infrastructure and growing interest in diverting organic waste such as leaves, grass clippings and food waste from landfill, according to the IHS Markit Chemical Economics Handbook: Biodegradable Polymers Report.

Foam packaging, which includes starch-based loose-fill packaging (packing peanuts), is a significant end-use for biodegradable polymers in Western Europe and North America; mulch films and other agricultural applications are important end uses in Western Europe and Asia.

Smaller-volume markets include paper coatings for cups and cartons, as well as textiles, nonwoven fabrics, resorbable medical devices such as sutures and implants, downhole tools for oil and gas field operations, and 3-D printing filament.

Stringer regulations fuel the demand, especially in Western Europe

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 Oceania (Australia and New Zealand) at 25%, then North America at 19% of consumption, with the rest of the world combined for less than 1% of demand.

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 (PE).”

Legislation: the single most important demand driver

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.

She commented that restrictions on the use of non-biodegradable plastic shopping bags in Italy and France have led to a significant increase in the consumption of biodegradable polymers in those countries, and IHS Markit expected European countries will continue to lead in legislative restrictions.

Meanwhile, mandatory composting programs can also contribute to demand growth for biodegradable polymers, the report said. These programs divert organic waste from landfill, thus reducing greenhouse gas emissions from landfill sites. The expansion of composting programs can spur demand for compostable trash bags and food service ware, both important end uses for biodegradable polymers.

The shortage of composting facilities that are capable of processing biodegradable polymers limits the positive impact of mandatory composting programs on biodegradable polymer demand.

China and India’s bans on plastics

Concerns about plastic waste in the environment are contributing to demand for biodegradable polymers worldwide. In 2015, China’s Jilin Province issued a ban on non-biodegradable plastic bags and food service items, boosting bioplastics manufacturing in China. In addition to local policies, there are also favorable policies for biodegradable polymers at the national level.

In India, the biodegradable polymer market is still at a preliminary stage, with few players in the segment. However, India seems to be taking the lead in Asia as it relates to plastic bag bans, although enforcement is sometimes questionable.

In 2012, the Delhi government issued an order imposing a ban on the use, storage, sale and manufacture of single-use plastic carrier (shopping) bags in the city. In other parts of the country, use of these bags is a finable offense, but despite this, change is, as of yet, barely visible on the ground. India has a significant challenge with plastic pollution and mismanaged municipal waste.

Major manufacturers to expand capacities

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.

In addition, TOTAL Corbion PLA, a joint venture of energy producer TOTAL and lactic-acid producer Corbion, plans to start up a world-scale polylactic-acid facility in Thailand by the end of 2018.

The U.S. accounts for the bulk of production for these polymers, but Thailand, with its proximity to growing markets in Southeast Asia, its expanding bio-economy, favorable investment climate, stable government, and access to cost-effective sugarcane feedstocks for fermentation, is becoming an increasingly important contributor to the biodegradable polymers market, the report said.

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