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Global bio plastics market to be driven by demand from packaging in North America

Global bio plastics market to be driven by demand from packaging in North America

02-May-17

A decade ago, biodegradable packaging was not known to have any real significance. However, recently biodegradable packaging has become an integral part of the global packaging market. The rising consumer awareness towards biodegradable packaging has led to the tremendous growth of the overall market. 
The global bio plastics market was US$19.54 bln in 2016 and is estimated to reach US$65.58 bln in 2022 at an estimated CAGR of 22.36% for the forecasted period, as per Research and Markets.  In the year 2012, the global bio plastics production capacity was approximately 1.3 mln tons of which Asia Pacific region accounted for largest share. By 2020, Asia Pacific region is projected to be the largest consumer of bio plastics globally followed by North America and Europe. Eco-friendly initiatives by corporates and abundant availability of raw materials for manufacturing bio plastics are prominent factors driving growth in Asia Pacific bio plastics market.  Europe and North America are expected to dominate the overall market of biodegradable packaging. North America is expected to be the largest consumer of the biodegradable packaging market. The developed regions are expected to dominate the overall biodegradable packaging market owing to the presence of mature markets that consist of highly environmental conscious consumers. In addition, the presence of high-spending population is also expected to increase the overall demand for biodegradable packaging in the developed regions. The presence of large populations in Asia Pacific is expected to boost the biodegradable packaging market. Owing to the increase in the contract manufacturing process coupled with increased governmental interest to promote biodegradable products by providing incentives in some countries such as China and India is further expected to contribute to the growth of the market. 
Demand for bio plastics is increasing since past decade due to growing awareness concerning environmental conservation, use of bio-based or natural resources for manufacturing materials and formulation of various regulations across countries for effective use of natural resources and waste management. Increased consumer preference towards biodegradable materials coupled with the growing environmental concern is expected to boost the overall growth of the biodegradable packaging market. Biodegradable packaging market is expected to witness the fastest growth, driven by food and beverage packaging. Bio based biodegradable plastics find their application in a variety of sectors, including fibres, medical, packaging, and agriculture. The demand for bio based biodegradable plastics is massive in the packaging sector, and it is anticipated that status quo will be maintained in the next five years as well. Other prominent sectors which will create robust demand for bio based biodegradable market include agriculture and medical. The global bio based biodegradable plastics market is also segmented on the basis of product type and includes PHA, cellulose, polyester, and PLA. Among these segments, the polyester and PLA control a share of more than 60% of the global bio based biodegradable plastics market. The prime reasons for the high demand for these bio based biodegradable plastics types is that these sturdy and cost-effective. 

Research and Markets says that the global bioplastic market totaled 1.6 mln metric tons in 2015 and should total nearly 6.1 mln metric tons in 2020, a compound annual growth rate (CAGR) of 30% for the five-year period from 2015 to 2020. The report includes the use of renewable resources to create monomers that replace petroleum-based monomers, such as feedstocks made from sugarcane that are used to manufacture polyester and polyethylene. Ethanol, a major product in Brazil, is one small chemical step from ethylene. The focus of this report is on plastics made from renewable resources such as biomass or food crops. There is even some potential development of bioplastics from animal resources. Plastics that may be potentially made from waste carbon dioxide are reviewed because of their potential impact on bioplastics, but their data are not included in the forecasts presented here. Bioplastics are further defined here as polymer materials that are produced by synthesizing - chemically or biologically - materials that contain renewable organic materials. Natural organic materials that are not chemically modified (e.g., wood composites) are excluded. 

Global bio-plastics market estimated CAGR is at 28.8% between 2014 and 2020, as per Future Market Insights accounting for US$ 43.8 bln by 2020, registering a CAGR of 28.8% during the forecast period. A growing beverage packaging industry, government support for adopting bio-based materials, and rising consumer acceptance for bio-plastics are expected to contribute to the growth of the global bio-plastic market over the forecast period. In terms of materials, the global bio-plastics market is segmented as bio-PET, bio-PE, bio-PA, bio-degradable polyesters, PLA & PLA blends, starch blends, PHA and others. Currently, the bio-PET material segment dominates the bio-plastics market, and was estimated to be US$ 5.6 bln in 2014. This segment is expected to reach US$29.1 bln by 2020, with a momentous CAGR of 31.4% for the forecast period. Moreover, an increasing demand for bio-plastics from the beverage packaging industry and effectiveness of bio-plastics in one-time use application has driven the demand for the bio-PET in the last few years. On the basis of application type, the bio-plastics market is segmented as bottlers, other packaging, food-services, agriculture/horticulture, consumer products, automotive and others. Among all the afore mentioned applications, bottles segment is expected to dominate the market with 34.4% of the total revenue share by 2020. However, automotive segment is anticipated to exhibit the second highest CAGR of 27.5% as compared to other applications during the forecast period. Additionally, influx of new entrants is predicted to fuel the growth of others application segment, thereby accounting for 5% market share by 2020.
Key regions considered for this market study include North America, Europe, Asia Pacific and RoW (Rest of the World). Asia Pacific represents the most lucrative market, followed by North America. Asia Pacific is expected to contribute 33.7% market share to the overall bio-plastics market by 2020. The growth of Europe is supported by the strong influence of regulatory framework and awareness regarding greener products through various media among the consumers. Assessing the various factors driving this market, a FMI lead analyst, said, "Increasing consumer awareness regarding benefits of greener products, strict regulations to incorporate bio-based products in automotive & packaging, and increasing investments by local companies are expected to fuel the demand for global bio-plastics market."

Biopolymers market revenue is projected to witness a CAGR of 18.6% by 2021, as per IndustryARC Analysis. Revenue in 2015 was US$6.94 bln and is projected to witness a CAGR of 18.6% by 2021 with major industry demand stemming from packaging and automotive application. The three major factors that define the evolution of bio-plastic industry are market demand, government mandates and technical maturity. In order to address the challenges of today’s modern scenario and society’s plunging demand for better sustainable solutions, many companies have started focusing upon the green aspect of the bio based plastics. As with conventional plastics, bio-plastics have a very broad application spectrum. Bio-plastics tend to have a generally very high consumer acceptance. It derives its use in various commercial applications which includes packaging, textiles, consumer goods, agriculture & horticulture, automotive and many more. Owing to the great packaging solutions with entirely novel functionalities, like biodegradability/ compostability, new materials such as PLA, PHA, cellulose or starch-based materials are used in consistently in packaging. Bioplastics are conquering entire packaging sector right from a niche product in organic trade to premium packaging for branded goods.
Various factors are driving the inclination toward bioplastics. Consumers are expressing improved attentiveness in green products, healthier lifestyles along with restoring the environment. Consequently, businesses are reacting to government agencies, Non-Governmental Organizations (NGOs) and consumer demands for more eco-friendly products instigating the use of bioplastic instead of conventional polymers. Recently there is an increasing demand for environmentally friendly products in various applications such as packaging, textiles, automotive and more. Following this trend, many companies are coming forward with the introduction of eco-friendly bioplastics made up of natural feed stocks such as starch obtained from potatoes, sugarcane and more. Packaging is the major application served by bioplastics. Rigid plastic packaging find its use in products such as bottles and jars made from PET, which is the most extensively used resin. High Consumer demand & Acceptance (Eco-marketing) coupled with the rising concern for human health and safety worldwide has also led to increased consumption of biopolymers.
Packaging market has humungous growth that can be attributed to the assured growth in biopolymers sector across the world. Biopolymers find its major use in applications such as flexible and rigid packaging. Packaging is the major application served by bioplastics. The prevalent usage is in beverages and food, however rigid plastic is likewise used in packaging of household, pharmaceutical and personal care products. Bioplastics packaging offers the same qualities as conventional packaging, while exposing much greater sustainability features.
The market in 2015 was US$6.94 bln and is dominated by Europe which is poised to exhibit the fastest growth due to favorable microeconomic conditions like government regulations and financial conditions like increasing FDI investments. The European bio-plastics market is projected to grow at a high rate of more than 20% per year owing to internal as well as external bio-plastic factors. Europe is the largest regional market for bio-plastic packaging with 39% of global tonnage consumed in 2013. This is equivalent to 182 thousand tonnes, of which the majority is used for non-food packaging products. Moreover, Thailand and China are the growth frontiers for the biopolymers manufacturers providing a huge market to be tapped in APAC. The bio-plastics industry is an enormous business opportunity in Thailand due to rich supply of biomass, supporting industries, active industry and government cooperation, supportive government policy, and the nation’s strategic location. The biopolymers market in Brazil is anticipated to grow at a CAGR of 17.61% during the forecast period 2016 to 2021.

As per Technavio, the global biopolymers market will witness impressive growth at a staggering CAGR of close to 17% during the forecast period. One of the primary factors driving this market’s growth is the increasing demand for eco-friendly packaging among consumers. This has impelled plastic manufacturers and packaging vendors to shift focus toward biopolymer packaging. Moreover, stringent government regulations regarding the use of plastic are also forcing vendors to focus on manufacturing biopolymers and consume more green packaging labels as a strategy for branding and customer acquisition over the next four years. In terms of geographical areas, Western Europe was the highest revenue contributing region and will continue to dominate the market over the forecast period. The concept of biopolymers was introduced in the Western European countries over two decades ago; hence, the biopolymers market in the region is relatively mature. Furthermore, the legal framework and strategy of governments of Western European countries to provide many subsidies for the use of biopolymers will impel this market’s growth in the region. The market is highly fragmented owing to the presence of several global and regional players. The market is very competitive with major players competing to increase their market shares and geographical reach by acquiring local and regional players. The competitive environment in the biopolymers market will further intensify during the forecast period with the increase in product extensions in terms of innovation in technology and production. Therefore, to survive and succeed in this competitive environment, it becomes imperative for manufacturers to distinguish their product offerings through a clear and unique value proposition.
During 2016, the PLA segment was one of the fastest growing segments in the biopolymers market and will continue to lead the market over the next four years. PLA is one of the widely adopted biodegradable polyesters and can be synthesized using either renewable or non-renewable routes. Furthermore, PLA is water-resistant and decomposes within three weeks when subjected to the industrial composting process. Therefore, PLA finds extensive applications in the packaging sector and textile industry. The augmented demand from the bottling and packaging industries is expected to boost the market for PLA in the global biopolymers market.
Segmentation by end-use and analysis of the biopolymers market:
Packaging and food services
Agriculture and horticulture
Consumer goods
Automotive
The packaging and food services segment was the highest revenue generating end-user segment in the biopolymers market and will continue to dominate the market over the coming years. Biopolymers are used to manufacture bottles, loose-fill, cups, pots, blows, flexible films, and other products. Packaging products from biopolymers are used in the packaging of fresh food, dry snacks, bakery goods, juice bottles, and meat trays as well as coatings for beverage cups, films, and card stock. Also, biopolymer packaging is in high demand for wrapping organic and premium foods, which will propel this segment’s growth until the end of 2021.

Growing environmental concerns, increasing awareness of the economic & ecological viability of using biodegradable plastics coupled with favorable government initiatives have led to the growth of the global biodegradable plastics market, as per Grand View Research. The key drivers expected to boost the biodegradable plastics market are the utilization of bio-based raw material, the shift in consumer preference for eco-friendly packaging, and increased government initiatives & activities to promote the use of biodegradable plastics. Decreased number of petroleum reserves and the increasing cost of petrochemicals is expected to encourage the production and demand of eco-friendly products which are not harmful to the environment. One of the major challenge encountered by manufacturers of biodegradable plastics is its high cost of production. The biodegradable plastics market is segmented into polylactic acid (PLA) and polyhydroxyalkanoates (PHA). PLA biodegradable plastics is anticipated to account for the largest market share owing to its superior quality, ease of processing, and mechanical properties. This product segment is planned to register the most substantial growth over the coming years.
By application, the biodegradable plastics market segmentation includes packaging, bottle manufacturing, fibers, agriculture and injection molding. Packaging and container production applications are expected to hold a larger market share as compared to other applications. The high production scale of packaging and container manufacturing coupled with the growing environmental concerns with regards to the disposal of these products is expected to drive the biodegradable market. Injection molding segment is anticipated to witness the highest growth on account of surging environmental concerns over the toxicity of non-biodegradable molds. Increased research & development activities for the production of bio-based building blocks as a substitute for conventional chemicals is expected to fuel demand for greener alternatives. Companies such as BioAmber, DuPont Tate & Lyle, November, and Genomatica are working on the development of such bio-based blocks. Biodegradable bioplastics such as Styrofoam, popcorn extruded trash plastic ware, and diapers are expected to drive the demand in this market.
Western Europe accounted for over 45% of the overall market share in 2015. Growing environmental awareness among the natives and implementation of strict guidelines and regulations are the primary drivers for the growth of biodegradable plastics market in the Western European region. Imposition of tax on the use of petroleum-based plastics in countries such as Ireland and Germany and the ban on the use of such plastics in Italy is expected to drive the biodegradable plastics market in these countries. Increasing investments in research & development (R&D) activities for greener alternative of plastics led to the innovation of oxo-biodegradable plastics which degrades completely. EPI’s TDPA (Total Degradable Plastic Additives) formulations used in the production of oxo-biodegradable catalyze the degradation reaction at a faster rate releasing carbon dioxide, water, and biomass which can be quickly biodegraded in the environment. Oxo-biodegradable plastics are commonly used for lightweight carrier bags, packaging films, and disposable bags, and it is expected to witness growing interest in agricultural and horticultural applications. Asia Pacific drives the demand for bioplastics on account of its large number of plant and animal feedstock. Increased agricultural use of oxo-biodegradable plastics in countries such as China, Japan, and Europe is expected to spur demand for oxo-biodegradable plastics over the forecast period.

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