The global market for biodegradable plastics was valued at US$7.6bn in 2014 and is rising at a compound annual growth rate of 9.9% during the forecast period of 2015–2023, according to a recent study by Transparency Market Research (TMR). The valuation is anticipated to reach US$17.7bn by the end of 2023.
The study found biodegradable packaging was the most prominent segment of the global biodegradable plastics market in 2014, accounting for 59.1% of the shares. The segment is likely to continue its dominance during the forecast period due to legislative regulations and consumer pressure toward environment-friendly materials, according to TMR.
Agriculture is likely to be another lucrative application segment of the biodegradable plastics market in the near future, as these plastics help in maintaining the productivity of the soil. Other applications of biodegradable plastics include electronic and medical sectors, the report suggests.
The market is fairly concentrated, especially in North America and Europe, according to TMR. In 2014, 33% out of the total market volume were reserved by three companies, namely BASE SE, Corbion, and NatureWorks LLC. Due to the high price sensitivity of raw materials and production process, diverse pricing strategies are expected to be adopted by prominent players, which will keep the degree of competition to a moderate level.
Geographically, the global market for biodegradable plastics is segmented into North America, Europe, Asia Pacific, Latin America, and the Middle East and Africa. By volume, North America dominated the demand for biodegradable plastics with the US leading in the country-wise market. The trend is likely to continue during the forecast period due to governmental regulations in the region. The biodegradable plastics market in the country is projected to experience above-average growth during the forecast period owing to rising awareness toward eco-friendly materials in the region.
Asia Pacific market for biodegradable plastics is also projected for a healthy growth rate during the forecast period, with China leading the country-wide market in the region.
Increasing consumer pressure and stringent regulations pertaining to the ban on conventional petroleum-based plastics are driving the global demand for biodegradable plastics. These norms are stringent in Europe, North America, and countries in Eurozone. One of the major factors boosting this market is the initiative taken up by several governments to use biodegradable plastics to overcome the challenges of disposing conventional plastics.
On April 29, 2015, the European Parliament and the council amended Directive 94/62/EC with regards to reduction of consumption of lightweight plastic carrier bags. Inner Pages: This has further led to increase in the consumption of biodegradable plastics.
An ordinance has also been passed in the US to ban “checkout bags” by retail stores. This has fuelled the biodegradable plastics market in the North America. Conversely, the requirement of ideal biodegradable environmental conditions such as appropriate micro-organisms, temperature, and humidity are seen as a restraining factor for the growth rate.
According to the report: “Price fluctuation of petrochemicals for petro-based plastics has become an opportunity for biobased biodegradable plastics. Biobased plastics are prepared from naturally occurring materials such as cellulore, starch, and oil. These materials are easily available at low cost. Researchers are working with biodegradable plastics manufacturers in order to adopt the newly-developed technique for manufacturing biodegradable plastics from natural materials.”
The above content is extracted from the published article in the “CIWM Journal Online” on 6 January 2017. To read the full article, please visit here.