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The global bioplastics market size was USD 7,043.9 million in 2020. The global COVID-19 impact has been unprecedented and staggering, with bioplastics witnessing a negative demand shock across all regions amid the pandemic. Based on our analysis, the global market exhibited a decline of 5.02% in 2020 as compared to the average year-on-year growth during 2017-2019. The market is projected to grow from USD 7,616.0 million in 2021 to USD 15,552.3 million in 2028 at a CAGR of 10.7% during the 2021-2028 period. The sudden rise in CAGR is attributable to this market’s demand and growth, returning to pre-pandemic levels once the pandemic is over.
Bioplastics are materials derived from renewable sources that can reduce plastic waste generation on the planet. These bio-based plastics are commonly sourced from renewable biomass sources, including cellulose, plant starch, natural sugars, vegetable fats, and waste oils. Furthermore, novel sources such as seaweeds, insects, and animals are also being researched for their development. Not all are biodegradable, however, a large volume of them can be naturally degraded in a particularly short time, making them superior to conventional plastics.
As an alternative to conventional fossil-based plastics, the use of biomass based-plastics is being promoted for applications wherein the former are generally utilized, including packaging, textile, electronic components, automotive parts, and furniture. Due to the stringent laws and legislation imposed by numerous agencies on the usage of non-renewable, single-use plastics, industries have shifted their focus on developing and utilizing bio-degradable grades of plastics for numerous purposes. The development of environmentally-viable plastics is a field wherein research activities are being carried out on an enormous scale by both individuals and corporate, to create a sustainable future for the next generation.
Decreased Prices of Conventional Plastics during Pandemic Created Threat to Bioplastics Adoption
The COVID-19 pandemic has impacted the supply chain by affecting production and transportation and leads to a decrease in conventional plastics prices. The utilization of crude oil for fuel has marked its lowest since World War II and has lowered the prices of conventional plastics, which is the primary reason for the decrease in the growth of this market.
Furthermore, regulations on single-use plastics and green investments announced by many governments and organizations are postponed due to the pandemic, resulting in a reduction in the uptake of bio based alternatives. However, sustainable plastics can prove to be an excellent alternative to conventional plastics, which are in increased demand due to the increase in food, pharma, and PPE packaging, thus providing an alternative growth pathway to this market in the wake of the pandemic.
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Increase in Demand from Automotive Industry to Create Growth Prospects
A decrease in fuel consumption and emissions by reducing vehicle weight is the main objective and a challenge for the automotive industry. Bioplastics are proven to be suitable materials to achieve this specific goal. The key automobile manufacturers have adopted these smart plastics such as bio-PA and bio-PP to reduce environmental impact and provide additional strength to the automobile components. According to European Bioplastics, the technical application of these plastics in the automotive industry is one of the upcoming applications increasing their volume to about 170 KT by 2024. Thus, the demand for these plastics in the automotive industry owing to their superior properties is expected to create growth prospects for the companies in the market.
Increasing Demand for Eco-friendly Plastics from Packaging Industry to Propel Market Growth
Biodegradable plastics have found applications in multiple industries, but the most prominent application of such plastics is observed in the packaging industry as they portray similar properties to conventional alternatives. They are utilized in both rigid as well as flexible packaging. With an increase in e-commerce globally, a sizable amount of packaging material is expected to be used in the future years. As bio-based plastics can easily replace conventional plastics, their utilization can be an excellent alternative to reducing plastic pollution in the environment.
The demand for renewable feedstock-based plastics is also increasing from the industries such as food and pharmaceuticals. Besides this, the demand for ready-to-eat products has gained traction in both developed and emerging economies. Hence, the manufacturers of such products have actively sought packaging materials that are safe and inert towards the packaged products and have a low-to-nil impact on the environment. These plastics have become the material of choice for such companies.
Demand for Compostable Plastics to Improve Soil Quality to Aid Growth
Plastics find tremendous application in the field of agriculture and horticulture. For instance, they are used in making greenhouses, storage bags, and bins, and silos. Furthermore, existing semi-intensive and intensive farming practices involve using huge quantities of mulching films and harvest-protection bags to resist the growth of weeds, protect crops from pests and regulate soil moisture & nutrient content to create a beneficial micro-climate. However, conventional plastic is not biodegradable and stays in the environment for multiple harvest seasons. It causes damage to the environment and affects the growth of crops and products by restricting the access of roots to water and nutrients in the soil.
Due to these factors, many companies producing plastic products related to agriculture have sought biodegradable plastics using renewable and sustainable raw materials, both technically and economically viable. Aside from promoting plant growth, such compostable plastics get degraded in the natural environment and contribute to enriching the soil. Thus the demand for such bio-based plastics is expanding in agricultural and horticultural fields that will bode well for the global bioplastics market growth during the forecast period.
High Cost Compared to Conventional Plastics to Restrain Market Growth
Even though biodegradability is a definitive advantage, most of the grades require highly specific industrial composting processes to disintegrate and only a handful of economies have a significant density of infrastructure to process these products. As a result, they may either enter landfills or contaminate the recycling feedstock, harming the environment. Hence, a separate mechanism is required to discard such plastics and result in higher product costing properly.
The land required to produce biodegradable plastics production competes with food production as the feedstock crops used in production are generally used to feed people worldwide. The Plastic Pollution Coalition reports that to meet the current global demand for these plastics, an area of 13800 sq. km. will be required to grow feedstock crops. For comparison, this area is larger than Belgium, the Netherlands, and Denmark. These all factors have resulted in higher prices of the product compared to conventional plastics. According to the Earth Institute of Columbia University, PLA can be 20-50% costlier than comparable materials due to the complex process used to convert corn and sugarcane into the lactide monomers for PLA.
Biodegradable Plastics Segment to Generate Higher Revenue
The market is segmented into biodegradable and non-biodegradable, based on type.
The biodegradable segment accounts for the higher bioplastics market share due to high demand from packaging, textiles, agriculture & horticulture, and consumer goods industries. These industries prefer biodegradable types as they offer required performance characteristics with the added benefit of being biologically sustainable. Biodegradable plastics are further categorized into starch blends, polylactic acid (PLA), polybutylene adipate terephthalate (PBAT), polybutylene succinate (PBS), polyhydroxyalkanoates (PHA), and other biodegradables. PLA holds a major share in the market between these segments owing to heavy uptake from the packaging industry.
The non-biodegradable types have found traction in food packaging, automotive parts, and consumer goods manufacturing. Furthermore, these plastics are utilized to carry bags and bottles, electronic equipment, and automotive housings due to their high strength and durability. They are also used as substitutes for high-performance glass components. The segment is further categorized into bio-polyethylene terephthalate (Bio-PET), bio-polyamide (Bio-PA), bio-polyethylene (Bio-PE), bio-polytrimethylene terephthalate (Bio-PTT), and other non-biodegradables. The dominant shareholder among these sub-segments is Bio-PET, owing to its extensive application in packaging, consumer goods, and electronics industries.
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Rigid Packaging Segment is Anticipated to Exhibit a Rapid Growth during the Forecast Period
Based on application, the market is segmented into rigid packaging, flexible packaging, textiles, automotive & transportation, agriculture & horticulture, consumer goods, and others.
The rigid packaging segment is expected to remain dominant. In rigid packaging applications, bio-based plastics have found traction due to shipping companies seeking sustainable yet sturdy packaging products. The increasing utilization of flexible packaging in industries such as food and pharmaceuticals is expected to provide growth opportunities for bio-based plastics during the forecast period. The rigid packaging segment is further divided into bottles & jars, trays, and others, while flexible packaging is further categorized into pouches, shopping/waste bags, etc.
The primary concern for automotive manufacturers is to reduce the fuel consumption and weight of the vehicle. Bio-based plastics are well suited for this purpose and thus have witnessed high demand from the automotive industry. Properties like high strength-to-weight ratio, durability, rust-proof, and self-heating have fueled the demand for such plastics in the automotive application.
Europe Bioplastics Market Size, 2020 (USD Million)
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The market size in Europe stood at USD 3,460.8 million in 2020. Europe is a crucial hub as it is the leading region in the research & development, and consumption of the product. Currently, Europe holds about 25% of production as per the data by the European Bioplastics. Additionally, a robust automotive industry and the increasing demand for bioplastic-based packaging products by various manufacturers in the region are expected to favor the market’s demand.
Asia-Pacific has the largest production capabilities and regional development. According to a report by European Bioplastics, about 56% is produced in the region. The industry is expected to grow rapidly in this region as China focuses on implementing its foreign investment law, which was delayed due to the global pandemic. The booming packaging industry in the region shall further bolster regional growth.
North America is projected to experience steady growth in the market due to the growing demand for lightweight automobile parts and electronic goods in the region. Consumer goods is another vertical that shall fuel the market growth in the region owing to the high living standards of the people, which prefer quality products instead of cheaper products
The increasing demand for bioplastics for agriculture & horticulture is one of the vital factors influencing the market in the Rest of the World. Furthermore, the expansion of the food products manufacturing industry shall be the region's growth defining factor. With the global community seeking restrictions on utilizing conventional plastics, these manufacturers have sought sustainable solutions for packaging their products.
Capacity Expansion and Collaborations form Essential Aspects for Growth of Operating Companies
Capacity expansion and collaborations across the value chain are important aspects for companies to maintain their market position. Novamont is one of the prominent companies operating in the market. The company operates four production sites and two research centers and has a distribution network spread across 25 countries. Additionally, it has innovated five proprietary technologies and has filed over 1800 patent applications. It dedicates around 5% of its annual revenue for research, development, and innovation and promotes a bio-economy model based on efficient resource usage and regeneration.
An Infographic Representation of Bioplastics Market
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The global bioplastics market report provides a detailed analysis of the market and focuses on crucial aspects such as leading companies, types, and applications. Also, the report offers 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.
Value (USD Million) and Volume (Kiloton)
Type; Application; and Geography
Fortune Business Insights says that the global market size was USD 7,043.9 million in 2020 and is projected to reach USD 15,552.3 million by 2028.
In 2020, the market stood at USD 7,043.9 million.
Growing at a significant CAGR of 10.7%, the market will exhibit significant growth during the forecast period (2021-2028).
The flexible packaging application is expected to be the leading segment in this market during the forecast period.
Increasing demand for environment-friendly plastics from the packaging industry is the key factor driving the market
Braskem, Arkema S.A., Novamont, and LyondellBasell are the leading players in this market.
Germany held the highest share in the global market in 2020.
The growing concerns regarding the accumulation of plastic waste and stringent regulations on the usage of single-use plastics are the key factors driving the adoption of the product.
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