Bio-plastics Market size is forecast to reach $7.4 billion by 2025, after growing at a CAGR of 17.2% during 2020-2025. With a rise in the consumption of eco-friendly products and wide usage of bio-plastics in various industries such as pharmaceutical, transportation, and food industries, the bio-plastics market is witnessing an increase in its demand. Bio-plastics composites reduce landfill wastes, release much lower carbon footprint, and decrease volatile organic compound emissions. In addition, government and environmental governing bodies around the world have imposed various policies to encourage the use of bio-based products, which fuels the growth of bio-plastics market.
Bio-Plastics Market Segment Analysis – By Type
The non-biodegradable plastics segment held the largest share in the bio-plastic market in 2019, owing to the increasing usage of non-biodegradable bio-plastics in food packaging, automotive parts, consumer goods, and more. They are widely used to manufacture products such as carry bags, bottles, electronic equipment, and automotive housings. In addition, they are being used as a substitute for high-performance glass components. Also, the weight of Bio-PET is much less than conventional PET. Non-biodegradable Plastics are preferred over biodegradable bio-plastics by the industrial manufacturers due to its superior properties such as high strength and durability, which is the major factor driving the growth of bio-plastics market during the forecast period.
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Bio-Plastics Market Segment Analysis – By End-Use Industry
The packaging industry held the largest share in the bio-plastics market in 2019 and is growing at a CAGR of 15.4%, owing to increased demand for biopolymers such as bio-plastics for manufacturing packaging products. Bio-plastics possess characteristics such as gloss, barrier effect, antistatic behavior, and printability, which make them suitable for packaging bottles, cups, cans, corrugated cases, boxes, and others. Thermoset plastics (soy polyurethanes and unsaturated polyester resins) and thermoplastics (PLA, starch blends, PBS, PHA, and cellulose) are the two types of biodegradable plastics mainly used in the packaging industry. Packaging products made from these plastics are mainly used in the packaging of fresh food, dried snacks & candy, bakery goods, water & juice bottles, meat trays, and others. Thus, the growing adoption of bio-plastics by the packaging sector is driving the bio-plastics market during the forecast period.
Bio-Plastics Market Segment Analysis – By Geography
Europe held the largest share in the bio-plastics market in 2019 up to 35%, owing to regulations enforced by the government and rising consumption of bio-based commodities in the region. In January 2011, Italy promoted a first of its kind regulation aimed at replacing traditional plastic carrier bags with biodegradable and compostable bags (compliant with the harmonized CEN Standard 13432) and reusable long-life bags. In May 2019, the government of England banned the use of plastic straws, drinks stirrers, and plastic-stemmed cotton buds. A £61.4 million funding package has also been committed by the UK government to boost global research and help countries across to stop plastic waste from entering the oceans. Building on this, the government’s £ 20 million Plastics Research and Innovation Fund encourages researchers and businesses to develop innovations that can bring changes to the production and consumption patterns of plastics in the UK, which through the Industrial Strategy will be vital to building a cleaner, greener economy. In June 2019, the Government of Canada took steps to reduce Canada’s plastic waste, support innovation, and promote the use of affordable and safe alternatives by banning harmful single-use plastics such as plastic bags, straws, cutlery, plates, and stir sticks as early as 2021. All these government initiatives are influencing bio-plastic composites market growth in the region.
Bio-Plastics Market Drivers
Favorable Government Regulations
Various international Governments are trying to find a sustainable way to be environment friendly for which a series of policies are published in accordance with the usage of bio-plastics rather than conventional plastics. In May 2019, the house representatives of Nigerian banned the import, usage, and production of plastic bags in the country. In October 2017, Cambodia enforced a tax on plastic bags. In January 2017, large retailers are required to charge the customers for plastic bags with handles in Israel. In 2018, Taiwan announced its strategy to ban petroleum-based plastics in stores by sticking prohibition in offering bags at stores in 2020, increasing the price in 2025, and then finally by 2030 total ban of petroleum-based bags. In March 2012, the Italy government passed a new law 28 in which non-reusable shopping bags have to be certified by accredited bodies as biodegradable and compostable according to the norm EN13432. A road map for reducing scrap plastics by 2030 was approved by the Thailand government in 2019. As part of the scheme, the government decided to ban the cups, plastic shopping bags thinner than 35 microns, and even the plastic straws by 2020, which will then Increase the acceptance of bio plastics by retailers, supermarkets, and storage vendors. As such almost 127 countries have adopted some legislation to regulate the usage of standard plastics and have unlatched the door for bio-plastics economy.
Flourishing Packaging Industry
The inception of new technologies along with a rise in e-commerce, changing lifestyles, urbanization and increased personal health awareness has boosted the growth of the packaging industries in various regions. Another factor that has provided a substantial stimulus to the packaging machinery industry is the rapid growth of imports and exports, which requires superior packaging standards for the international market. With this, the need for adopting better packaging methods, materials, and machinery to ensure quality has become very important for businesses. The UK Packaging Manufacturing Industry has annual sales of £ 11 billion, according to the Innovative UK, which is a major contributor to UK GDP. Also, the U.K smart packaging market was valued at US$12.646 billion in 2016 is estimated to reach US$19.787 billion by 2021. In 2016, according to the Federation of Indian Chambers of Commerce & Industry (FICCI), the Indian packaging is one of the fastest-growing industries and stands at USD 700 billion globally. In 2017, China’s packaging materials revenue was forecast to exceed $5.2 billion in 2018, which accounted for about 26 percent of the global packaging materials market. Also, the Indian government will be investing Rs 40 crore (US$ 6.2 million) to increase the domestic production of plastics in the country. Thus, the increasing packaging industry coupled with the favorable government initiatives act as a driver for the bio-plastics market during the forecast period.
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Bio-Plastics Market Challenges
High Cost of Bio Plastics
Bio-plastics are currently more expensive than standard plastics because of the complex process involved in the conversion of corn or sugarcane into the building blocks for PLA (polylactic acid). In addition, owing to the limited availability and higher raw material cost the biodegradable plastics such as bio-plastics are more expensive than petroleum-based non-biodegradable counterparts such as polypropylene plastic (PP) and polystyrene plastic (PS). Therefore, it is anticipated that the higher price of bio-plastics limits market growth during the forecast period.
Covid-19 Impact on the Bio-Plastics Market
Due to the covid-19 outbreak, many countries are under shut down owing to which the market is witnessing a period of low demand from its end-use industries. After frequent panic buying in many places in mid-March, food and daily necessities are now being stockpiled again owing to which the demand for packaging is on a downfall. In addition, the COVID-19 pandemic is affecting operations of various industries including food and beverages, as most of the countries have issued “stay at home guidance” i.e., lockdown. As bio-plastic is extensively used in these industries, the declining operation of these industries globally is directly limiting the bio-plastics market growth during the pandemic.
Bio-Plastics Market Landscape
Technology launches, acquisitions, and R&D activities are key strategies adopted by players in the bio-plastics market. In 2019, the market of bio-plastics has been consolidated by the top five players accounting for xx% of the share. The major key players in the bio-plastics market are Novamont S.p.A, Arkema S.A., Dow Chemical Company, BASF SE, Mitsubishi Plastics Inc., Corbion NV, Huntsman Corporation, Natureworks LLC, Toray Industries Inc., and Solvay SA.
In October 2019, Novamont announced the expansion of its capacity production in Mater-Bi by 40,000 tonnes in the province of Frosinone, Patrica.
In December 2018, Total Corbion PLA, a joint venture between French oil major Total SA and Corbion N.V., has started up a 75,000-tonne per year Poly Lactic Acid, or PLA, bioplastics plant in Rayong, Thailand. The facility will increase the global production of the PLA bioplastic by almost 50% to 240,000 tonnes per year.
In January 2018, Dow Packaging and Specialty Plastics (P&SP), has developed an innovative formulation of polyethylene (PE) resins to create a new sustainable all PE laminate solution with flexible packaging applications in India.
In October 2016, BASF SE made an agreement with Avantium to use plant-based sugars for the production and marketing of chemical building blocks such as polyethylenefuranoate (PEF) and furandicarboxylic acid (FDCA).
Europe dominates the bio-plastics market owing to policies imposed by the government in the region such as Extended Producer Responsibility (EPR), which encourages the use of bio-plastics in various end-use industries.
Bio-plastics are an environmentally friendly alternative to petroleum-based plastics such as polypropylene plastic (PP) and polystyrene plastic (PS) and possess comparable better characteristics.
The bio-plastics are being developed to work in the existing injection molding equipment and are likely to aid in the bio-plastics market growth. Polycaprolactone (PCL), Polyhydroxyalkanoates (PHAs), Polybutylene adipate terephthalate (PBAT), and Polylactic acid (PLA) are the biodegradable polymers broken down into tiny granules suited for injection molding.
Increasing adoption of sustainable and environmentally friendly products and implementation of stringent government regulations will increase consumer consideration which will lead to market demand for bio-plastics in the near future.
Due to the COVID-19 pandemic, most of the countries have gone under lockdown, due to which operations of various industries such as packaging has been negatively affected, which is limiting the bio-plastics market growth.
Related Reports :
A. Biodegradable Plastic Market
B. Bioplastic Composites Market
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