Bioplastics Market Expected to Reach $18.7 Billion by 2031

According to a new report published by Allied Market Research, titled, "bioplastics market by type, and application: global opportunity analysis and industry forecast, 2022–2031," the global bioplastics market size was valued at $6.3 billion in 2021, and is projected to reach $18.7 billion by 2031, growing at a CAGR of 11.7% from 2022 to 2031.

Bioplastics are obtained by converting the sugar present in plants into plastic. The sugar in turn is obtained from corn, cane, sugar beets, wheat, or potatoes. This makes bioplastics sustainable and better for the environment as compared to conventional plastics. Bioplastics are extensively used in the production of rigid packaging. However, the level of technical complexity involved in bioplastics packaging is high.

Bioplastic has the potential to reduce carbon dioxide emission. Its greenhouse gas emission is minimal during the time of degradation. These advanced environment-friendly properties and functionalities are anticipated to drive the market growth. Factors such as eco-friendly properties, increase in consumer awareness, growth in environmental concerns, and favorable government policies drive the growth of the bioplastics market. However, high production cost and comparatively lower performance standards than synthetic plastics restrain the market growth to a certain extent.

On the contrary, the increase in R&D activities to produce cost-efficient bioplastics may surge the potential application of bioplastics among several end-use sectors; thus creating remunerative opportunities for the market. The bioplastics market is segmented on the basis of type, application, and region. By type, the market is segregated into biodegradable plastic and non-biodegradable plastic. The biodegradable plastics segment dominated the global market, in terms of revenue in 2021, with three-fifths of the total share. This is attributed to the increase in government initiatives such as ban of single use plastics which in turn have promoted the utilization of biodegradable plastics in various end-use sectors.

Furthermore, industry trends are shifting toward bio-based products to reduce the dependency over conventional plastics. These factors have increased the demand for biodegradable plastics. By application, the global bioplastics market is classified into flexible packaging, rigid packaging, textiles, coating and adhesives, agriculture and horticulture, consumer goods, and others. The flexible packaging application segment dominated the global market, in terms of revenue in 2021, with two-sevenths of the total share as bioplastics protects products from moisture, UV rays, mold, dust, and other environmental contaminants that make it best-suited for flexible packaging applications. Rapid change in lifestyles has surged the demand for convenient products where bioplastics are widely used for flexible packaging applications. Furthermore, increase in awareness for environment protection activities has made the customer become more linear toward using bioplastics-based flexible packaging films in various end use sectors including food & beverage, agriculture, and others.

Region-wise, the bioplastics market is analyzed across North America, Europe, Asia-Pacific, South America, and Middle East and Africa. The Asia-Pacific bioplastics market size is projected to grow at the highest CAGR during the forecast period, and accounted for a major bioplastics market share in 2021, owing to the fact that China is one of the biggest markets for biodegradable plastics, owing to abundant availability of bioplastics feedstock. Increase in oil prices and rapid change in climatic conditions encourage government, private companies, and public toward the wide use of bio-based products in this region. Moreover, rapid industrialization coupled with presence of large scale population offer lucrative growth opportunities for the bioplastics market in the Southeast Asia owing to the use of bioplastics in several end use sectors including automotive, agriculture, packaging, consumer goods manufacturing, and others.

In addition, favorable government policies have surged the popularity of bioplastics in countries such as India, Thailand, Japan, and others. For instance, according to an article published by The Times of India in June 2022, the Indian government has imposed the Plastic Waste Management Amendment Rules, 2021 that bans the manufacturing, import, stock, distributing or sales of single-use plastic (SUP) items.

Key players operating in the global bioplastics market include BASF SE, Biome Technologies Plc., CJ CheilJedang Corp., Corbion N.V., Danimer Scientific, Dow Inc., Eastman Chemical Company, Kuraray Co. Ltd.,LG Chem, Mitsubishi Chemical Holdings, Novamont S.P.A., and SKC.

COVID-19 analysis

• The rapid spread of corona virus pandemic reduced the application of any new plastic bags including biodegradable bags. Consumers are bringing their old fabric and plastic bags, and retail shops and small stores are not providing new plastic bags to prevent further spread.
• Prior to COVID-19 breakdown, a large number of multinationals such as Danone, Coca-Cola, and Nestlé promised to adopt biodegradable plastics under pressure from activists and consumers. However, after COVID-19 outbreak governments across different countries made several changes in their regulations regarding disposable and single use plastics to prevent further spread of the virus. For instance, the State of Maine postponed its ban on plastic bags until January 2021; thus, negatively impacting the market growth.
• In addition, supply chain disruptions due to irregular transport led to increase in lead time of raw materials, such as corn starch; thus, delaying the entire product process. For instance, according to a report by Business Standard, the corn starch consumption has reduced by 50% from 400,000 tons to 200,000 tons. Moreover, more than 100 countries have locked their international borders for transportation and non-essential trade activities, which hampered the supply-demand chain of the bioplastics market during the COVID-19 scenario
• In 2020, bioplastics prices were high in the Asia-Pacific region due to continued regional demand trends and tight product availability. Firm downstream demand for bioplastics in packaging, agriculture, and other sectors and stronger upstream costs are expected to sustain the price gain. Moreover, import dependency on China for various raw materials for the production of biodegradable plastics may change market scenario.
• As China started production in limited capacity, the material price for biodegradable plastic is expected to increase. Industry players are focusing to extend the lead time to avoid such high material price. This is predicted to enhance the performance of the bioplastics market post COVID-19 period.

Key findings of the study

• By type, the biodegradable segment is estimated to display the highest growth rate, in terms of revenue, registering a CAGR of 12.2% from 2022 to 2031.
• On the basis of application, the flexible packaging segment is anticipated to register the highest CAGR of 12.52% from 2022 to 2031.
• Asia-Pacific depicted the highest share of 44.56% in 2021, in terms of revenue, and is anticipated to grow at a CAGR of 12.46%