Can Bioplastic growth rate meet the market needs

As plastic waste becomes major issues of the environment, Various countries tried to regulate the use of the plastic for single use supplies. To increase the recycle rate of the plastics European countries have been making packaging guideline of mono material plastic packaging with environmental contributions. Now Food manufacturing and retail companies voluntarily change their packaging material into paper base packaging or try to use less plastic material. The needs of the No plastic act, companies started to increase the production capacity of bioplastic and tried to increase the application of the bioplastic.

Last 10 years bio plastic industry had tremendous changes.
Bioplastic production has been increased more than 20 times compared to 2009, and now bioplastics represent 1% of the 359million tones of the annual plastic production.
The application of the bio plastic has been widened from flexible, rigid packaging to Textile, consumer goods, agriculture, automotive, coating adhesives, building construction, etc. Compared to plastic bioplastic had many weaknesses, such as elongation strength, processability, physical weakness, etc. Many disadvantages have been solved but still cannot replace the plastic yet.
Production Capacity of the bioplastic market has been moved to Asia. In 2009 Europe capacity was 52% and North America capacity was 30% of the entire bio plastic market. But in 2019 Asia production capacity has been increased to 45% and European capacity has been reduced to 25%.

Next 10 years of bio plastic industry

Bioplastic consumption in food packaging will be increased with high growth rate due to tightened regulations and technical issues.
Half of the plastic waste comes from food packaging because Food packaging is single used product, that is why the most plastic regulation started from food packaging, and now it is getting tighter and more countries started to apply similar bills of regulations.
In other markets, Bioplastic is not ready to replace plastic, to make durable bioplastic goods need to add non eco-friendly adhesives to bioplastic to meet the technical needs, which can lead to more wastes.

In conclusion, the Reduction of bioplastic market CAGR of 3.7% will be the minimum growth rate. Most of the growth is led by packaging market, Food market expected to grow 3.6% per year, and plastic market expected to grow 4% per year. But if the bioplastic market grows 3.7%, it can barely hold 1% of the plastic market. The CAGR of the market will be increased as the technical issues are solved with more applications.

 

Hebronstar Insights
Jun Young Kim / Associate Consultant