Biodegradable Plastics Market Expected to Reach $9.1 Billion by 2033

According to a new report published by Allied Market Research, titled, “Biodegradable Plastics Market," The biodegradable plastics market was valued at $3.9 billion in 2023, and is estimated to reach $9.1 billion by 2033, growing at a CAGR of 8.8% from 2023 to 2033. 

Biodegradable plastics are materials capable of breaking down into natural compounds under the influence of microorganisms over time. Unlike conventional plastics, which persist for centuries, biodegradable variants offer an eco-friendly alternative. They can originate from renewable sources like corn starch or petrochemicals with additives that accelerate decomposition. Enzymatic reactions degrade the polymer chains into smaller molecules, which microorganisms metabolize. However, the rate and efficiency of degradation hinge on environmental factors such as temperature and microbial activity. While promising for reducing plastic pollution, proper disposal and infrastructure are vital to ensure biodegradable plastics degrade effectively without harming the environment.

Market Dynamics

Increasing awareness of environmental issues, particularly plastic pollution, is a primary driver of the biodegradable plastics market. Conventional plastics, derived mainly from non-renewable fossil fuels, pose significant environmental challenges due to their persistence in the environment. Biodegradable plastics offer a solution by breaking down into natural compounds, reducing the accumulation of plastic waste in landfills, oceans, and ecosystems. Heightened concern over the ecological impact of plastics drives demand for sustainable alternatives, fostering the growth of biodegradable plastics.

Moreover, government regulations and policies play a pivotal role in shaping the biodegradable plastics market. Authorities worldwide are implementing measures to mitigate plastic pollution and promote sustainability. Legislation banning single-use plastics, imposing taxes on plastic products, and incentivizing the use of biodegradable alternatives drive market demand. For instance, the European Union's Single-Use Plastics Directive targets the reduction of plastic pollution by restricting the use of certain single-use plastic products and promoting the use of biodegradable alternatives. Compliance with regulatory standards and eco-labeling requirements influences product development and market strategies in the biodegradable plastics sector.

However, cost remains a significant barrier to the widespread adoption of biodegradable plastics. The production of biodegradable polymers often involves specialized manufacturing processes and raw materials, contributing to higher production costs compared to conventional plastics. Additionally, economies of scale have not yet been fully realized in the biodegradable plastic industry, further exacerbating cost disparities.

Furthermore, while the environmental benefits of biodegradable plastics are compelling, many consumers and businesses remain price-sensitive, prioritizing cost-effectiveness over sustainability. As a result, biodegradable plastic products often face challenges in competing with their non-biodegradable counterparts, especially in price-sensitive markets..

On the contrary, the biodegradable plastics market offers significant opportunities across various industries, driven by environmental concerns, regulatory initiatives, consumer preferences, and technological advancements. With continued innovation, investment, and collaboration across the value chain, biodegradable plastics have the potential to revolutionize the packaging, agriculture, textiles, automotive, and electronics sectors, contributing to a more sustainable and circular economy.

Segments Overview

The biodegradable plastics market is segmented on the basis of type, application, and region. By type, the market is segregated into Polylactic Acid (PLA), Polybutylene Adipate Terephthalate (PBAT), Polybutylene Succinate (PBS), Polyhydroxyalkanoates (PHA), Starch Blends, and others. The polylactic acid (PLA) segment accounted for the highest share in terms of revenue. Many companies are incorporating sustainability into their business strategies and product offerings to meet consumer expectations and address environmental concerns. Switching to PLA and other biodegradable materials aligns with corporate sustainability goals, allowing companies to reduce their carbon footprint and enhance their brand image. As a result, there is growing demand from businesses across industries for PLA-based packaging, consumer goods, and other products.

By application, the market is divided into packaging, agriculture, consumer durable, textile, and others. The packaging segment dominated the global market, in terms of revenue in 2023 with 65.0% share in the global market. Consumers are increasingly concerned about the environmental impact of packaging materials and are seeking out products with minimal ecological footprint. Biodegradable packaging appeals to environmentally conscious consumers who want to reduce their plastic consumption and support more sustainable packaging options. As consumer awareness and demand for eco-friendly products continue to rise, so does the demand for biodegradable plastic packaging.

Regional Analysis

Region-wise, the biodegradable plastics market is analyzed across North America, Europe, Asia-Pacific, and LAMEA. The Europe biodegradable plastic market size is projected to grow at the highest CAGR during the forecast period, and accounted for a major market share in 2023. European businesses are increasingly integrating sustainability into their corporate strategies and supply chains. Many companies are setting ambitious sustainability targets, including goals to reduce plastic waste and transition to biodegradable or compostable packaging materials. These corporate commitments create demand for biodegradable plastics as companies seek to align with consumer preferences, reduce their environmental footprint, and enhance their brand reputation. Furthermore, European consumers are becoming more environmentally conscious and are actively seeking out eco-friendly products, including biodegradable plastics. There's a growing demand for sustainable packaging solutions, biodegradable bags, compostable food containers, and other bioplastic products. Manufacturers and retailers are responding to this demand by offering a wider range of biodegradable options, driving market growth. 

Key players operating in the global biodegradable plastics market include BASF SE, NatureWorks, Total Corbion, Novamont, Biome Bioplastics, Mitsubishi Chemical Holding Corporation, Toray Industries, Plantic Technologies, Danimer Scientific, and Fkur Kunstsoff.

Key Findings of the Study

• By type, the polylactic acid (PLA) segment is estimated to display the highest growth rate, in terms of revenue, from 2023 to 2033.
• By application, the packaging segment is the most lucrative segment.
• By region, Europe garnered the highest share in 2023, in terms of revenue, growing at a CAGR of 8.7%.