The modern world needs plastics and polymers. From adhesive tape to zips to the device you are reading this article on now, plastics and polymers are all around us. We make hundreds of millions of tons of it every year, most of which are petroleum based. Their durability and long life is their greatest asset, but it is also their biggest problem. Most of the plastics we use will remain in landfills for years to come or litter the environment endangering both humans and wildlife alike. But maybe there is a solution, and one that could lead to big profits for the right investor. Maybe biodegradable or biobased plastics are that solution.
Biodegradable plastics and polymers have a key advantage over regular plastics and polymers in that they will break down over time, with minimal damage to the planet.
Whilst being environmentally-friendly is a helpful selling point, it doesn’t tell us if there is actually a market for biodegradable polymers or not. Can ‘plastics’ actually go green?
What types of plastics and polymers are there?
It is important to note that biobased does not equal biodegradable, as overall the market contains three main groups of products.
- Biobased or partly biobased non-biodegradable plastics such as biobased PE, PP, or PET (so-called drop-ins) and biobased technical performance polymers such as PTT or TPC-ET.
- Plastics that are both biobased and biodegradable, such as PLA and PHA or PBS. PHA (Polyhydroxyalkanoate) is the fastest-growing biodegradable plastic driven by its high use in packaging, whilst PHA (Polyhydroxyalkanoate) is an aliphatic polyester produced via fermentation of carbon substrate within a microorganism.
- Plastics that are based on fossil resources and are biodegradable, such as PBAT.
Industry sources expect that bio-based polymers such as bio-polyethylene will increase at a faster rate than biodegradable polymers because of factors such as the ‘drop-in’ ability that they have, as their production, use and disposal are similar to conventional petrochemical-based polymers.
As all substances degrade over time, it is important to follow set standards to avoid over using the phrase ‘bio-degradable’. These legal standards allow products to be labelled as “biobased carbon content” or “biobased mass content” and include EU standard CEN/TS 16137, the corresponding US-standard ASTM 6866 or international standards such as ISO17088.
What are biodegradable polymers?
If a polymer is to be considered biodegradable (compostable), the ‘greenest’ of polymers, it must meet three criteria:
- Biodegradation – It has to break down into carbon dioxide, water and biomass at the same rate as food waste.
- Disintegration – The plastic must become indistinguishable in the compost. This means they must be able to pass through a 2 mm sieve after 12 weeks.
- Nontoxic – It must not poisonous after disintegrating.
Most international standards (such as ASTM D6400) require at least a 90% biodegradation of a product within 180 days, along with other factors, to be called compostable.
The two most important commercial biodegradable polymers in 2012 were polylactic acid (PLA) and starch-based polymers, accounting for about 47% and 41%, respectively, of total biodegradable polymer consumption. But there are other polymers in use, such as aliphatic/aromatic copolyesters or epsilon-caprolactone (also known as polycaprolactone), as well as cellulosic derivatives and polyhydroxy-alkanoates.
Who’s buying?
Plastics Business, which reports on the plastics industry estimates that, “In 2012, Europe was the dominant market for biodegradable polymers consuming 147 KMT or about 55 percent of world consumption; North America accounted for 29 percent and Asia approximately 16 percent.”
Packaging was the single-largest application of biodegradable plastics, with a market share of nearly 60% of the total demand in 2013. Increasing demand for PLA (polylactic acid) and PHA (polyhydroxyalkanoate) is driving the demand for biodegradable plastics.
And yet, the bioplastics industry accounts for only about 1% of the total global plastics market.
Whilst many may see this as proof of the lack of demand for such products, some investors see this merely as an opportunity for growth in a yet-to-be-realised market. Certainly, many industry experts predict growth, including renowned market research team Markets and Markets, who state that, “[the] Biodegradable Plastic Packaging Market [will be] worth US$8,415 Million by 2019.”
That is growth in excess of 10% worldwide in less than 4 years, which makes investment in this field an interesting prospect. This is especially true in certain areas, as researchers at Future Market Insights state that, “the bio-based biodegradable plastics market in Latin America is expected to demonstrate the highest growth rate (22.6%) followed by Asia Pacific (20.7%).”
What’s stopping even bigger growth?
These rates may seem amazing, but they are small in comparison to what they would be if the market can overcome its biggest obstacle: a lack of composting infrastructure.
According to the Dartmouth Journal of Science, ‘the last obstacle to surmount is the proper disposal of biodegradable plastics. In order for biodegradable plastics to be effectively disposed of, the current waste management infrastructure must change.”
Recently, Western European countries have led the way in developing such an infrastructure in an attempt to meet EU landfill reduction targets. Whilst in the United States, cities and local communities have continued to develop ways to make composting more accessible.
Legislation is a key market driver in this area, and includes a packaging waste directive to set recovery and recycling targets, a number of plastic bag bans, and other collection and waste disposal laws to avoid landfill. Consumer awareness of sustainable plastic solutions and pressure from retailers also contribute to the interest in reduction of greenhouse gas emissions and fossil fuel independence.
What are bioplastics used for?
The market for biodegradable plastics has a wide range of possibilities for growth, in areas as diverse as the medical industry (tissue engineering, wound healing, and drug delivery) or drinks bottles that are commonly made with partially bio-based polyester PET.
But packaging is the biggest single use of biodegradable plastics and is projected to be worth US$2,007 million by 2019.
Who’s investing now?
There are a number of firms, both large and small, who have begun to invest in the field of bio-plastics and polymers. Among these the major players are:
NatureWorks LLC (U.S.), Novamont S.p.A. (Italy), Plantic Technologies Ltd. (Australia), Synbra Technology bv (Netherlands), Meredian Inc. (U.S.), Tianjin Green Bio Science Ltd (China), Bio-On Srl (Italy), Corbion nv (Netherlands), Mitushbhi Chemical Corporation (Japan), Metabolix Inc. (U.S.), BASF SE (Germany), Bioome Technology PLC (U.K.) and Innovia Films Ltd. (U.K.). BASF markets a product called Ecovio® which is a blend of the company’s biodegradable plastic Ecoflex® and PLA. An application for this biodegradable material is for thin plastic films such as shopping bags or rubbish bags.
What now?
This will be a growth market, according to a report entitled, ‘Biodegradable Polymers: Past, Present, and Future’ by The Society for Engineering in Agriculture, Food and Biological Systems. Who states that, “There are a seemingly limitless number of areas where biodegradable polymer materials may find use. The sectors of agriculture, automotives, medicine, and packaging all require environmentally friendly polymers. Because the level of biodegradation may be tailored to a specific need, each industry is able to create its own ideal material. The various modes of biodegradation are also a key advantage of such materials, because disposal methods may be tailored to industry specifications. Environmental responsibility is constantly increasing in importance to both consumers and industry.”
There is certainly an appeal to invest in biobased and biodegradable plastics on an environmental level, and with increasing uncertainty in the price of oil, a more stable way to furnish our world seems like an easy choice. Indeed, most countries now have governments who are supporting the use of greener materials or are imposing higher costs for the disposal of fossil fuel based substances. However, whilst any new project carries with it an amount of risk, steps into newer markets such as greener plastics require careful consideration. But then what wise investment doesn’t?