Polylactic Acid Market Size, Share & COVID-19 Impact Analysis, By Application (Packaging, Textiles, Consumer Goods, Agriculture & Horticulture, and Others), and Regional Forecast, 2021-2028

The global polylactic acid (PLA) market size was USD 698,200.9 thousand in 2020 and is projected to reach USD 2,306,708.2 thousand by 2028, exhibiting a CAGR of 16.3% during the forecast period.

Polylactic acid (PLA) material is different from the commonly available form of thermoplastic polymer materials. It is primarily derived from renewable resources such as corn starch or sugar cane. PLA is relatively cheap with several beneficial mechanical properties compared to other biodegradable polymers, which has made it a popular material. As of 2019, the production capacity of PLA was approximately 290 thousand tons. PLA is relatively cheap with several beneficial mechanical properties compared to other biodegradable polymers, which has made it a popular material. As of 2019, the production capacity of PLA was approximately 290 thousand tons. PLA production heavily relies on plant feedstocks such as cassava, potato, corn, and sugar cane.

Other types of feedstock such as agricultural by-products, cellulosic materials, or greenhouse gases (i.e., carbon dioxide and methane) have been studied and explored. However, the technique is still under development, and agricultural products look likely to stay in the foreseeable future as the primary feedstock for starch blends and PLA.

Reduced Demand from Packaging Industry During COVID-19 to Hamper Market Growth

Various initiatives have been undertaken to deal with the pandemic such as lockdown, the suspension of trading practices, and the closure of multiple factories and workplaces worldwide. But they have wide-ranging economic consequences.

• In April 2020, the International Monetary Fund (IMF) projected a 3% fall in global economic activity for 2020, which is higher than the 2009 slowdown.

Government measures in many countries have banned single-use plastics, which have impacted the demand for poly-lactic acid. Also, reduced sale of fashion apparel has led to the decreasing demand worldwide. Single-use plastics have been banned in countries such as the U.K., Taiwan, New Zealand, Zimbabwe, and the U.S. For instance, the city of Los Angeles and the city of Portland have banned plastic or PLA straws in restaurants unless specifically requested by a customer. The authorities in both cities have stressed that there are no current facilities to ensure the biodegradation of these materials. It is not recommended to use compostable plastics in the city.

Thus, the reduced demand from the packaging & textiles industry due to the COVID-19 pandemic will hamper the polylactic acid market growth.

POLYLACTIC ACID MARKET TRENDS

Decline in Usage of the Fossil Fuels to Drive Demand

Polylactic acid has the potential advantage of reducing reliance on fossil-based emissions. There is a need to reduce reliance on fossil fuels and move towards green carbon to progress towards a circular economy. PLAs provide an environmental advantage over their carbon-based counterparts such as decreased CO2 footprint, reduced fossil resource reliance, and increased use of renewable resources during the manufacturing process.

For instance, 0.5 kg CO₂ eq/kg is the global warming potential (GWP) of PLA. In contrast with other typical fossil-based polymers such as PS, PET, PP, and PE, this is a ~75 percent drop in carbon footprint.

POLYLACTIC ACID MARKET GROWTH FACTORS

Increasing Demand from Packaging Industry to Drive the Market

For polylactic acid, the packaging is the main application. In 2019, packaging accounted for 59 percent of biodegradable plastics produced, according to the European Bioplastics. A fraction (0.5 percent) of the overall plastic packaging produced in biodegradable packaging. Almost 500,000 tons of biodegradable plastics are used in flexible packaging. In the consumer packaged goods, supermarkets, and foodservice markets, major multinationals have either made strides or announced plans to ramp up the use of biodegradable plastic significantly. This further drives the need for PLA packaging for fresh fruit, food cutlery, and compostable bags.

Greenpeace East Asia Magazine in its December 2020 edition mentioned that 164,000 tonnes of biodegradable food & beverage packaging and foodstuffs were processed in 2017. By 2022, this figure is projected to grow by about 10 percent.

PLA bioplastics offer several features that help reduce plastic use while enhancing the use of green plastics. PLA has excellent barrier properties making it very suitable for fresh fruits and vegetable packaging. Moreover, it has high stiffness and strength, which allows for a thin wall part design.

Green packaging provides various benefits such as reduced reliability on fossils fuels, lower utilization of natural resources, increased use of recyclable products, more energy-efficient manufacturing methods, and renewable sources. Recent trends and technological solutions are available in sustainable packaging that includes edible packaging, shrinking carbon footprint, and waste reduction. Furthermore, it is economically appealing to both manufacturers and consumers. Thus, the growing demand for sustainable packaging is anticipated to fuel the demand for the polylactic acid market during the forecast period.

RESTRAINING FACTORS

Concerns over Cost & Agricultural Feedstock to Hamper Market Growth

Compared to traditional plastics, the cost of processing polylactic acid is high. With the falling price of fuel oil, synthetic plastics have become cheaper, leading to a bigger price gap. Several technological hurdles exist to manufacture cheaper biodegradable plastics. Approximately one-third of biodegradable plastics are derived from petrochemicals, and the industry is moving towards feedstock that is bio-based.

The current bio-based feedstock is primarily agricultural products such as maize, cassava, and potato. Using agricultural goods, specifically food crops, on a broad industrial scale could potentially lead to problems such as whether industrial usage competes with the region's food supply.

POLYLACTIC ACID MARKET SEGMENTATION ANALYSIS

By Application Analysis

Packaging Segment to Lead Market

Based on the application, the polylactic acid marketis segmented into packaging, textiles, consumer goods, agriculture & horticulture, and others.

Polylactic acid is widely used in the packaging industry. Companies have raised their appetite for food packaging and single-use plastic and have found biodegradable substitutes for food packaging and single-use cutlery. Moreover, a move to biodegradable packaging has also been promoted by many e-commerce giants, driving the biodegradable market for online merchandise and food distribution. In China alone, more than 700,000 tons would be added to the demand for biodegradable plastics if online industries met the policy requirement by switching 50 percent of their online delivery packaging and 20 percent of food delivery packaging to biodegradable products.

Furthermore, by 2025, the January 2020 policy prohibits the use of non-degradable plastics in online delivery. Unless businesses develop ambitious plastic reduction plans and switch from conventional plastics to biodegradable plastics, China's online distribution industry will produce an estimated 5,000 tons of biodegradable plastic waste annually by 2025.

REGIONAL POLYLACTIC ACID MARKET ANALYSIS

Europe stood at USD 285,573.1 thousand in 2020. The region is expected to dominate the market during the forecast period. This is attributable to the stringent government policies on using plastic, increasing R&D supporting the use and development of bioplastic, and consumer spending. Also, the growing agricultural industry is likely to drive the market. The increasing demand for natural ingredients and organic food in the region is supporting the polylactic acid market growth.

The growing demand for exotic fruits and vegetables has been a major factor driving the market in Europe. Germany is the most consuming country of polylactic acid in the region due to high economic growth and the luxurious lifestyle of consumers preferring fine quality food products. This is expected to boost the demand for good quality packaging applications.

The increasing demand for ready-to-eat food and packaged food offering convenience and nutritional value, along with the change in consumer lifestyle, shall drive the market in North America. In the U.S., consumers are inclined to consume organic food due to the growing focus on leading a healthy lifestyle.

In terms of country, China is the key market in Asia Pacific owing to the increasing food demand from the growing population. This demand is being fulfilled by convenience food easily available at a cheaper cost. China is the major producer of packaging materials worldwide, which increases the production and consumption of food packaging in the country.

It is predicted that Latin America will show substantial growth by the end of the forecast period. The growth is supported by a rise in the per capita intake of food & beverage packaging in countries such as Brazil, Argentina, and the Caribbean region.

Demand for green packaging in the Middle East & Africa is growing because of the rise in demand for canned goods due to the simplicity of use and longer shelf life. Besides, demand for packaging products will be increased by local brands which supply different types of canned products.

KEY INDUSTRY PLAYERS

Strategic Planning Adopted by Companies to Strengthen their Market Positions

The polylactic acid market is fragmented owing to the presence of several key players at a global and regional level. Some major players are putting perpetual efforts to offer quality and advanced products by adopting novel technologies in manufacturing. In addition to this, several key players are adopting strategies such as mergers and acquisitions, developing and modifying infrastructure, expanding their manufacturing facilities across cities, and investing in R&D facilities. These companies are also looking for opportunities to integrate vertically across the value chain.

For example, NatureWorks LLC manufactures its Ingeo PLA bioplastics from dextrose, a sugar extracted from maize starch cultivated for many industrial and practical applications.

LIST OF KEY COMPANIES PROFILED IN POLYLACTIC ACID MARKET:

• NatureWorks (Minnetonka, Minnesota, United States)


• Total Corbion PLA (Gorinchem, Netherlands)


• BASF SE (Ludwigshafen, Germany)


• Sulzer (Winterthur, Switzerland)


• Other Key Players

KEY INDUSTRY DEVELOPMENTS:

• In June 2021, the Thailand Board of Investment approved the construction of the completely integrated Ingeo Polylactic Acid manufacturing plant of NatureWorks. The plant is anticipated to be in function by 2024 with a production capacity of 75000 tons of Ingeo biopolymer.


• In April 2021, Total Corbion PLA announced the exhibition of number of partner application based on Luminy, its Polylactic resins (PLA) portfolio which includes both standard and high heat grade PLA grades.


• In September 2020, NatureWorks announced the slate of manufacturing technology projects that include additional lactide monomer purification technology to expand the availability of ingeo biopolymer from the manufacturing facility in Blair. This is expected to increases the obtainability of fully ingeo (PLA) biomaterials portfolio by 10%.

REPORT COVERAGE

The global polylactic acid market research report provides a detailed analysis of the market and focuses on crucial aspects such as leading companies, products, and applications. The polylactic acid market includes insights into market trends and highlights vital industry developments. In addition to the factors mentioned above, the report encompasses various factors that have contributed to the growth of the market over recent years. It includes historical data & forecasts revenue growth at global, regional, and country levels, and analyzes the industry's latest market dynamics and opportunities.

Report Scope & Segmentation