Market Challenges And Opportunities

High cost of biodegradable plastic

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.