Bio-based Polyethylene Terephthalate Market is Estimated to Witness Significant Growth, Owing to Growing Environmental Concerns and Recyclability
Bio-based polyethylene terephthalate market is estimated to be valued at USD 3.43 Bn in 2024, exhibiting a CAGR of over 8.9% over the forecast period (2024-2031). The market growth is driven by increasing awareness about environmental protection and rising need for sustainable packaging solutions. Bio-based PET offers superior properties such as recyclability and low carbon footprint.
Market Dynamics
Rising environmental concerns coupled with stringent government regulations regarding petroleum-based plastics can drive the bio-based polyethylene terephthalate market growth during the forecast period. Government bodies across various countries are promoting the use of renewable and recyclable materials for packaging, in order to reduce plastic waste. This can boost the demand for bio-based PET. Growing focus on green packaging worldwide prompt key players to use bio-based feedstock for manufacturing PET resins. Leading brands are opting for bio-based PET to attain sustainability goals and enhance their brand image. The market can gain momentum with rapid urbanization and improving living standards leading to increased consumption of packaged food & beverages globally.
Growing Demand for Sustainable and Eco-friendly Packaging Materials
There has been growing demand from consumers as well as packaging manufacturers for more sustainable and eco-friendly packaging materials. Consumers have become more environmentally conscious and prefer products packaged in materials that have lesser negative impact on the environment. Bio-based PET offers a sustainable alternative to conventional PET as it is made partially or completely from renewable plant-based sources like sugarcane instead of non-renewable fossil fuels. This reduces dependency on crude oil and helps lower greenhouse gas emissions. The sustainable properties of bio-based PET align well with growing emphasis on circular economy and appeal to brands looking to enhance their sustainability credentials.
Stringent Government Regulations Regarding Use of Renewable Resources
Many governments across the world are imposing stringent regulations regarding use of renewable resources and reduction of plastics pollution. For example, the European Union has set targets for incorporation of minimum percentage of recycled plastics in packaging. Regulations like plastic bag bans boosts demand for alternative sustainable packaging materials. Bio-based PET helps companies comply with such regulations. Some governments also provide subsidies and incentives for production and use of bio-based and biodegradable plastics. This makes bio-based PET economically attractive for packaging manufacturers. The regulatory push can drive the bio-based polyethylene terephthalate market growth.
Higher Production Costs than Conventional PET
While bio-based PET offers sustainability advantages, its production costs are significantly higher than conventional PET. The raw materials used for bio-based PET like sugarcane are more expensive than non-renewable sources used in conventional PET production. Cultivation and processing of such bio-based feedstocks also involves higher capital expenditure. These higher input and production costs can hamper widespread adoption of bio-based PET.
Lack of Established Recycling Infrastructure
Since bio-based PET is still an emerging product, there has been lack of established infrastructure for its collection and recycling. Current PET recycling systems are not equipped to handle bio-based PET. Its chemical properties are also not fully compatible with conventional PET recycling. This means it has limited options for end-of-life management. If not recyclable, there are concerns if it will end up as litter or in landfill. The uncertainty around recycling pose challenges and hampers the market growth.
Potential Substitution of Conventional PET
As production technologies advance and economies of scale expand, cost reductions in bio-based PET could make it a viable substitute for a share of conventional PET demand. Packaging manufacturers may increasingly adopt bio-based PET to align with sustainability objectives. Given the sizable global market for PET, even a 5-10% shift to bio-based options represents a significant growth opportunity. Current R&D efforts are focused on achieving price parity with conventional PET, which could open up substantial market potential.
New Application Areas and Market Segments
While initially competing mainly in rigid packaging, bio-based PET producers are exploring new application areas and market segments. These include flexible packaging films, bottles for beverages, fiber applications and others. Successfully entering new domains will open up fresh revenue streams. Partnerships with end users like brands can help develop customized grades and formats. Non-food contact applications may not require compliance with strict food safety regulations. Such new avenues present opportunities for bio-based polyethylene terephthalate market.
Key Developments
- In September 2023, Toray Industries and Honda Motor Co. announced that both companies will work together to validate a chemical recycling method for nylon 6 reinforced with glass fiber. This novel method depolymerizes nylon 6 using subcritical water, turning it back into caprolactam, a crucial basic ingredient. The initiative, which is supported by Japan's Ministry of the Environment, intends to recycle vehicle plastics in order to promote a decarbonized circular economy. By 2027, the technology's uses are expected to expand.
- In August 2023, Mitsubishi Corporation, Suntory Holdings, and ENEOS announced a ground-breaking project to use biomass to build a sustainable PET bottle supply chain. The goal of this research is to convert bio-naphtha—which comes from renewable resources like used cooking oil—into bio-paraxylene. The objective is to produce enough bio-PX by 2023 to make roughly 35 million PET bottles, which would be a major step in lowering CO2 emissions and reducing reliance on fossil fuels for the manufacturing of plastic.
Key Players
The Coca-Cola Company, Danone India., Indorama Ventures Public Company Limited., MG Chemicals, TORAY INDUSTRIES, INC., Toyota Tsusho Corporation., VIRENT, INC., Anellotech, Inc., Gevo, Inc., Avantium N.V., Mitsubishi Chemical Group Corporation, PepsiCo, Plastipak Holdings, Inc., and TEIJIN LIMITED
