As Plastic Regulations with Bans Increase, Market Value for Biodegradable Polymers Exceeds $1 Billion. Then Will Rise Sharply by 2023, IHS Markit Say

As Plastic Regulations and Bans Increase, Market Value for Biodegradable Polymers Exceeds $1 Billion. That is what this really all about! EXPECT Demand to Rise Sharply by 2023. That’s in part according to IHS Markit.

In addition, Western Europe’s the largest market for biodegradable plastics. Theregion tightened restrictions on plastic shopping bags. Their regulation is the most significant demand driver.

HOUSTON (July 26, 2018) – Led by Western Europe, increasing regulations and bans against plastic bags and other single-use plastic items such as drinking straws is driving growing demand for biodegradable plastics, according to new analysis from IHS Markit (Nasdaq: INFO), the leading global source of critical information and insight. The current market value of biodegradable plastics exceeds $1.1 billion in 2018, but could reach $1.7 billion by 2023, the report says.

Biodegradable or compostable polymers are bio-based or fossil-fuel-based polymers (plastics).  They undergo microbial decomposition to carbon dioxide and water in industrial or municipal compost facilities. A few of these polymers decompose in backyard compost bins or in soil, freshwater or saltwater.

The food packaging, disposable tableware (cups, plates, and cutlery) and bags sector is the largest end-use segment. Also the major growth driver for biodegradable polymer consumption. This segment will benefit from local restrictions on plastic shopping bags.  They will achieve double-digit growth. Compost bags are the second most important end-use for biodegradable polymers. This market segment will experience strong growth. Thanks to the gradual expansion of composting infrastructure and growing interest in diverting organic waste. Some examples are leaves, grass clippings and food waste from landfill, according to the IHS Markit Chemical Economics Handbook: Biodegradable Polymers Report.

Foam packaging, which includes starch-based loose-fill packaging (packing peanuts). That is a significant end-use for biodegradable polymers in Western Europe and North America. For example mulch films and other agricultural applications. There are important end uses in Western Europe and Asia. Smaller-volume markets include paper coatings for cups and cartons. That includes, textiles, nonwoven fabrics, resorbable medical devices such as sutures and implants, downhole tools for oil and gas field operations, and 3-D printing filament.

In 2018, global demand for these polymers is 360,000 metric tons. However total consumption of biodegradable polymers is expected to increase to almost 550,000 metric tons by 2023. Thereby, representing an average annual growth rate of 9 percent for the five-year period. Seems which is equivalent to a volume increase of more than 50 percent. Expect this growth from 2018 to 2023.

Western Europe, with the world’s strictest and increasingly stringent regulations for single-use plastics, commands 55 percent of the global market value in 2018 for these specialty biodegradable polymers, followed by Asia and Oceania (Australia and New Zealand) at 25 percent, then North America at 19 percent of consumption, with the rest of the world combined for less than 1 percent of demand.

As Plastic Regulations and Bans Increase, Market Value for Biodegradable Polymers Exceeds $1 Billion and Will Rise Sharply by 2023, IHS Markit Says

world cons biodegradable polymers by region.png
According to IHS Markit, global demand for PE, the world’s most-used plastic, has nearly doubled during the last 20 years. IHS Markit expects 2018 global PE demand to exceed 100 million metric tons (MMT).

With significant new market pressures, including a rise in consumer expectations around sustainability. Not to mention along with tightening environmental regulations in mature markets. For example Europe and key growth markets such as China. Combined could threaten future demand growth.
Hackett said it is important to understand that many biodegradable polymers are compostable only in special industrial composting facilities. These operate at higher temperatures than home compost piles. “Only a subset of biodegradable polymers is compostable in backyard compost bins; an even smaller subset is compostable in the soil or in marine environments,” Hackett said.

Despite the positive potential of biodegradable polymers, they are still mostly taking a backseat to other sustainability approaches. For example, reducing plastics consumption and recycling according to Hackett.

“For various reasons, which may include consumer confusion regarding bio-based plastics versus biodegradable polymers, there is not as much demand for these more sustainable plastics as you might expect, despite heightened public awareness of the plastics waste issue,” she said. “In addition, suitable disposal options for products made from biodegradable polymers are often lacking. The cost of establishing the infrastructure necessary to support their collection and composting remains a barrier to demand growth.”

Mandatory composting programs can contribute to demand growth for biodegradable polymers, the IHS Markit report said. These programs divert organic waste from landfill, thus reducing greenhouse gas emissions from landfill sites. The expansion of composting programs can spur demand for compostable trash bags and food service ware, both important end uses for biodegradable polymers. The shortage of composting facilities that are capable of processing biodegradable polymers limits the positive impact of mandatory composting programs on biodegradable polymer demand.

The issue of plastics and sustainability will be a key topic of discussion at the upcoming 6th Annual Global Plastics Summit (GPS) 2018, October 30 – November 1, in Chicago. Experts from IHS Markit and the Plastics Industry Association will discuss the latest market outlooks from key industry sectors.  Also, they will feature senior business leaders sharing their companies’ strategies for success. Expect also innovators presenting the latest in plastics technologies. Bob Maughon, R&D vice president, Packaging and Specialty Plastics and Hydrocarbons, The Dow Chemical Company, will discuss sustainability as a catalyst for innovation in packaging. Don Thomson, president of The Center for Regenerative Design and Collaboration, will address turning plastic waste into building blocks.

In the U.S., landfilling is the most common method of municipal solid waste (MSW) disposal. According to the EPA, landfill is 53 percent of total MSW in 2014 alone. Furthermore, materials recycling accounted for 26 percent. Then combustion with energy recovery at 13 percent. Finally, composting accounted for 9 percent of MSW disposal.

Composting has the potential to become a more important means of MSW disposal. Especially for food waste and yard trimmings. According to the report, together, these two categories of waste accounted for 28 percent of U.S. MSW generation in 2014! In the case of yard trimmings, 31 percent of the waste generated was landfilled. Then 61 percent was composted, and the remaining 8 percent was combusted with energy recovery.

Also, composting of plastics waste was negligible in 2014. Landfill was the primary method of disposal. It was responsible for 75 percent of plastics waste. In addition, the U.S. combustion with energy recovery was 15 percent. As well and more noteworthy, recycling accounted for only 9 percent.

Most important is market forces are increasing concerns about plastic waste in the environment. This is what’s contributing to demand and now biodegradable polymers worldwide. In 2015, China’s Jilin Province issued a ban on non-biodegradable plastic bags. This also included  and food service items, boosting bioplastics manufacturing in China. Also there are favorable policies for biodegradable polymers at the national level.

In India, the biodegradable polymer market is still at a preliminary stage.  Also with few players in the segment. However, India seems to be taking the lead in Asia. In 2012, the Delhi government issued an order imposing a ban. The ban is on the use, storage, sale and manufacture of single-use plastic carrier (shopping) bags in the city. In other parts of the country, use of these bags is a finable offense. However, India has a significant challenge with plastic pollution and mismanaged municipal waste.

The major manufacturers of biodegradable polymers include NatureWorks (a joint venture of Cargill and PTT Global Chemical), Novamont, BASF, and PTT MCC Biochem Co., Ltd., and Mitsubishi Chemical Corporation.

In conclusion, TOTAL Corbion PLA, a joint venture of energy producer. TOTAL and lactic-acid producer Corbion, plans to start up. Yes folks! A world-scale polylactic-acid facility in Thailand by the end of 2018.

The U.S. accounts for the bulk of production for these polymers. Thailand, with its proximity to growing markets in Southeast Asia works too. WHY? Cause its expanding bio-economy.  Also, it’s favorable investment climate and stable government. However, access to cost-effective sugarcane feedstocks for fermentation. YES! Finally! It’s becoming an increasingly important contributor to the biodegradable polymers market.

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