According to a new IHS Chemical (NYSE: IHS) global market research report, mounting consumer pressure and legislation such as plastic bag bans and global warming initiatives will increase demand for biodegradable polymers (plastics) in North America, Europe and Asia from 269 thousand metric tons (KMT) in 2012 to nearly 525 KMT in 2017, representing an average annual growth rate of nearly 15 percent during the five-year period 2012-2017.
The IHS Chemical CEH Biodegradable Polymers Marketing Research Report focuses on biodegradable polymers, including compostable materials, but not necessarily including all bio-based products. Biodegradable polymers are a part of the larger overall bio-plastics market. Typically, bio-plastics are either bio-based or biodegradable, although some materials are both.
In terms of biodegradable polymer end-uses, it is estimated that the food packaging (including fast-food and beverage containers), dishes and cutlery markets are the largest end-uses and the major growth drivers. In both North America and Europe, these markets account for the largest uses and strong, double-digit growth is expected in the next several years. Foam packaging once dominated the market and continues to represent significant market share for biodegradable polymers, behind food packaging, dishes and cutlery. Compostable bags, as well as single-use carrier plastic bags, follow foam packaging in terms of volume.
“The biodegradable polymers market is still young and very small, but the numbers are off the charts in terms of expected demand growth and potential for these materials in the coming years,” said Michael Malveda, principal analyst of specialty chemicals at IHS Chemical and the report’s lead author. “Food packaging, dishes and cutlery constitute a major market for the product because these materials can be composted with the food waste without sorting, which is a huge benefit to the waste management effort and to reducing food waste and packaging disposal in landfills. Increasing legislation and consumer pressures are also encouraging retailers and manufacturers to seek out these biodegradable products and materials.”
The report also noted that these biodegradable polymers offer expanding uses for biomedical applications. Another developing use for these biodegradable polymers is in the shale gas industry, where they are used during hydro-fracking as more environmentally friendly proppants to ‘prop open’ fractures in rock layers so oil and gas can be released.
In 2012, Europe was the dominant market for biodegradable polymers consuming 147 KMT or about 55 percent of world consumption; North America accounted for 29 percent and Asia approximately 16 percent. Landfill waste disposal and stringent legislation are key market drivers in Europe and include a packaging waste directive to set recovering and recycling targets, a number of plastic bag bans, and other collection and waste disposal laws to avoid landfill.
The most acceptable disposal method for biodegradable polymers is composting. However, composting requires an infrastructure, including collection systems and composting facilities. Composting has been a growing component of most European countries’ municipal solid waste management strategies for some time, and the continent has an established and growing network of facilities, while the U.S. network of composting facilities is smaller, but expanding.
North American consumption of biodegradable polymers has grown significantly in recent years, according to the IHS report, primarily due to the following factors—biodegradable polymers have become more cost competitive with petroleum-based products, and there has been growing support at the local, state and federal levels for these products (for example, legislation defining biodegradability, and plastic bag bans). In addition, there has been progress in addressing issues relative to solid waste disposal, such as improving composting infrastructure.
Said Malveda, “A couple of main barriers to these biodegradable polymers are price and performance, which will become less significant as processing technologies improve, more applications for their use are developed, and production increases. Regulations such as plastic bag bans are being enacted in many countries, and this stimulates new research investments for alternative materials and new uses.”
In Asia, there has been some growth of biodegradable polymers use due to government and industry promoting their use. This also includes plastic bag bans and global warming initiatives. However, Asian consumption of biodegradable polymers has not increased as much as expected. Current market prices of biodegradable polymers continue to be higher than conventional, petroleum-based resins. However, the Chinese market is expected to grow rapidly due to new capacity and government legislation supporting the environment. Future growth will also depend on price reductions, Malveda said.
In 2012, the two most important commercial, biodegradable polymers were polylactic acid (PLA) and starch-based polymers, accounting for about 47 percent and 41 percent, respectively, of total biodegradable polymers consumption. Starch sources vary worldwide, but include corn, potatoes, cassava and sugar beets. In Europe, starch-based biodegradable polymers are the major type consumed, accounting for 62 percent of the market, due to Europe’s large, starch-based capacity and their use in many applications. This is followed by PLA, with 24 percent and other biodegradable polymer types with 14 percent.
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