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Synthetic and bio-based biodegradable plastics market to grow in USA, Europe

Synthetic and bio-based biodegradable plastics market to grow in USA, Europe

14-Sep-12

Global synthetic and bio-based biodegradable plastics market was worth US$2.3 bln in 2011 and is expected to reach US$7.8 bln in 2018, growing at a CAGR of 19.5% from 2011 to 2018, according to a new market report published by Transparency Market Research. In the overall global market, Europe is expected to maintain its lead position in terms of revenue till 2018. Europe is expected to enjoy 36.8% of global synthetic and bio-based biodegradable plastics market revenue share in 2018 followed by North America. The global synthetic and bio-based biodegradable plastics market is driven by growing demand for eco-friendly materials in mainly packaging industry, cheap feedstock supply and its acceptance by the consumers. Globally, biodegradable plastics find its major use in packaging, agriculture and transportation industries. Biodegradable plastics market is classified under two markets, synthetic (petroleum derived) biodegradable plastics and renewable (bio-based) biodegradable market. Most of the countries are shifting towards bio-based biodegradable plastics owing to its eco-friendly nature. Although, synthetic biodegradable plastics market is also growing at a steady pace, it still lags behind bio-based alternatives and is thus experiencing a slightly decreasing market share. Over the last decade, demand of bio-based biodegradable plastics has increased considerably due to growing demand for eco-friendly materials. Bio-based biodegradable plastics market is segmented on the basis of its types as starch based plastics, polylactic acid (PLA) and polyhydroxyalkanoates (PHA). The market for renewable biodegradable plastics was 1.9 bln in 2011 and it is expected to reach US$7 bln in 2018. The major geographic markets for biodegradable plastics are Europe, North America and Asia Pacific. Europe enjoys the largest market share of the worldwide synthetic & bio-based biodegradable plastics market in 2012 and is expected to lead till 2018. Asia Pacific market is expected to grow at a CAGR of 25.7% from 2011 to 2018.

As per Reporlinker, US demand for bioplastics will expand strongly through 2016, when it is expected to reach 550 mln lbs, valued at nearly US$700 mln. Although bioplastics have begun to achieve a considerable degree of commercial success, the industry remains in an early stage of development, representing only a small niche within the overall plastics industry. Going forward, technical innovations and increased production capacity will combine to enhance the properties of bioplastics, boost their availability, and lower their price, thus making them more competitive with conventional polymers. In addition, many bio-based polymers benefit from relative price stability when compared with their petroleum-based counterparts. Moreover, the desire to decrease dependence on foreign oil will further fuel the expansion of bio-based resins, as will efforts by US manufacturers to enhance sustainability and improve the corporate image they project to an increasingly eco-conscious consumer base. Although biodegradable materials accounted for the vast majority of bioplastics volume in 2011, the emergence of non-biodegradable bioresins will dramatically alter the market landscape. By 2021, these materials will represent more than two-fifths of volume demand. Growth will be fueled by large-volume production of bio-based polyethylene, as well as the eventual commercialization of bio-based polyethylene terephthalate (PET), polypropylene, and polyvinyl chloride, as well as polyethylene furanoate. Since such resins are chemically identical to their conventional counterparts, market acceptance is forecast to occur at a rapid rate. PET is projected to offer significant growth potential over the longer term, particularly as large corporations - especially those in the soft drink industry - are investing heavily in the development of this material. Although demand for biodegradable products will continue to be impacted by issues such as their inability to decompose in landfills and their potential to contaminate the recycling stream, polylactic acid (PLA) is expected to remain the most extensively used resin in the bioplastics market through the forecast period. Advances will be promoted by a widening composting network and greater processor familiarity. Furthermore, PLA is being blended with other resins and additives to create new grades that offer improved product performance, allowing for expanded use in an extended range of applications. Bio-based polyethylene - which entered the market in 2010 - is expected to offer the best opportunities for growth through 2016, increasing rapidly from a small base. The exceptionally strong gains are predicated on the expansion of production capacity, which will reduce prices and enable bio-based polyethylene to compete more effectively with its petroleum-based counterpart. Although bio-based polyethylene will continue to command a price premium that will restrict demand in price-sensitive nonconsumer markets through 2016, the fact that bio-based polyethylene is chemically identical to, and can serve as a drop-in replacement for, conventional polyethylene will remain a key factor driving its adoption.

Steady sales for lactic acid and biopolymers over the next decade will act as stable drivers for the bio-based chemicals market through to 2021. The overall growth of the market, however, greatly depends on the continued adoption of biodiesel to provide steady glycerin production and the market growth of new glycerin-based intermediate chemicals. This research expects the bio-based chemicals market to grow to US$12.2 bln by 2021, accounting for 25.4 bln lbs of bio-based chemical production at the end of the decade, as per a research report from energy publisher SBIs. The bio-based chemicals market has continued steady and solid growth in the past two years, helped along by stabilization in glycerin prices to achieve a market of US$3.6 bln in 2011. Glycerin and lactic acid accounted for just over two-thirds of the bio-based chemical market by value in 2011. However, by 2021 this market share will shrink to 53% as the emerging markets for bio-based polyethylene (PE) and epichlorohydrin (ECH) achieve 10-fold growth through the decade. Strong biodiesel markets in South America, Europe and Asia have ensured plentiful global crude glycerin feedstocks in the last few years. Lactic acid sales weathered the recession very well, continuing their strong, steady growth seen since 2006. Chemical and pharmaceutical applications, which includes polylactic acid (PLA) production, is maintaining its place as the fastest growing sector of lactic acid sales. In the biopolymer segment, PLA continues to lead the segment by a strong margin, while the polyhydroxyalkanoate (PHA) market, though still strong, is experiencing real fluidity due to the exit of ADM from its joint venture with Metabolix. Biopolymers have strong growth potential over the next decade, particularly if companies such as Braskem and Dow manage to increase capacity for bioethylene production and convince manufacturers of its drop-in capacity for polyethylene and other plastics.

 
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