Bioplastics bid to boost business

Whatever the hype surrounding bioplastics, and the debate swirling around the subject, one fact remains: it’s still a niche sector. Currently, the global bioplastics market accounts for just 1% of standard petrochemical-based polymer consumption. Yet the market has developed rapidly over the past few years – fast enough for the packaging sector to take it seriously and with good reason.

“Packaging is one of the most advanced fields of applications for bioplastics, both in biobased and biodegradable plastics,” explains Hasso von Pogrell, managing director at European Bioplastics. “Market penetration of bioplastic products within the packaging sector is well ahead of others.”

So while packaging is making inroads into the potential of the technology, some regions are moving faster than others. While the current global market is currently small, certain countries are finding more flexibility in how fast they can push bioplastic packaging. So which areas are moving forward and what shape will the market take in the future?

According to bioplastics producer Novamont’s director for new business development Stefano Facco, every region is growing but at different rates. This depends, he argues, on how seriously each country takes its green responsibilities. “The better the country’s waste management strategy then the better the growth for bioplastics,” he says. “It depends from country to country. Regions that have lower growth tend to send waste to landfill or incinerate it.”

But Facco adds that pretty much every region is on the up, which is good news for Novamont – the Italian firm produces starch-derived Mater-Bi. It’s also good for Braskem, which is working with Ecover to provide sugar-based cane for its packaging.

“Interestingly, despite worries about a double-dip recession, there continues to be great interest in what we are doing, but clearly we are very small in the total market,” says Paul Mines, chief executive at UK-based bioplastics specialist Biome, formerly Stanelco.

Predicted boom
While it may still be early days for the bioplastic market, a new report suggests that over the next decade there will be plenty of activity. Pira International’s The Future of Bioplastics for Packaging to 2020 notes that bioplastic packaging deman d is forecast to grow at a high rate over the next five to 10 years. Growth will not only come from the traditional biodegradable polymers, such as starch, cellulose and polylactic acid; a new breed of bioplastics will also be major drivers.

According to Pira, global bioplastic packaging consumption is projected to reach 125,000 tonnes in 2010 with a market value projected at $454m. Between 2005-10, global bioplastic packaging consumption has grown at a compound annual growth rate (CAGR) of 22.9%. The forecast is that demand will grow at a CAGR of 24.9% between 2010-15. And consumption is likely to hit 884,000 tonnes at a CAGR of 18.3% during 2015-20.

So where is this growth coming from? In 2010, Pira says that Europe is the largest regional market for bioplastic packaging with over half of world tonnage. It’s reported that demand benefits from favourable consumer and retail attitudes to sustainable packaging, plus supported government policies.

According to Steve Davies, director for corporate communications and public affairs at NatureWorks, the the European market is upbeat. In July, the US-based biopolymer manufacturer boosted its presence in Europe by linking up with Trevira, a German polyester fibre specialist. “The European market is performing very well in some applications and solidly in others,” explains Davies.

One area that’s rapidly increasing is wrap film packaging. Davies says it’s a light packaging so the price gap, when compared to traditional plastics, is not that important. Packaging made from New Ingeo, a biopolymer developed by NatureWorks, is, he adds, a “great way” to differentiate a product without adding much cost.

In fresh food packaging, cost remains an issue. Rigid thermoformed trays are still the order of the day in this segment, and Davies says that despite many companies being keen to go green, the price gap is still a stumbling block right now.

“We expect to see wider adoption in this segment,” explains Davies. “As the cost of oil rises, the economies of scale improve for converting Ingeo and other biopolymers into finished consumer packaging.”

According to Biome’s Mines, the UK isn’t showing huge promise right now. “The UK is not seeing spectacular growth, which we’ve seen more of in the US and northern Europe in the past six months,” he says.

That hasn’t always been the case. According to Novamont’s Facco, the UK led the way. “From the start the UK was one of the strongest drivers through supermarkets,” he says. “Overall, Europe is the most advanced area.”

For the whole of the continent, a more joined-up approach might assist the market still further. European Bioplastics’ von Pogrell believes that more needs to be done.

“In contrast to biofuels and renewable energies, there is currently no EU-wide framework that supports the material use of renewable sources,” he says. “Creating a fitting framework to facilitate a full-scale market introduction of bioplastics in Europe should be of highest priority.”

While Europe is edging clear at the moment, the signs are that this will change over time. According to Pira, North America currently trails Europe in terms of bioplastic packaging consumption but government and consumer attitudes are changing. Indeed, the signs are that North America and Asia will overtake Europe in the next 10 years. Japan, for example, is the biggest player in Asia thanks to government initiatives that support the bioplastic market.

“We expect the Japanese market to grow in 2010 with strong double-digit growth rates,” adds NatureWorks’ Davies. “Fresh food and durables are strong contributors to growth.”

Stateside success
In the company’s home North American market the picture is healthy. The films market is performing strongly with growth in snack food packaging. Flexible films used for shopping or bin bags are still a niche because of the low cost of polyethylene. Folding cartons are also proving to be a tougher nut to crack.

“Ingeo offers a viable alternative with great clarity, heat resistance and impact strength but the supply chain is hindered by a lack of infrastructure to produce the needed sheet stock,” says Davies.

In addition, interest is picking up in the North American durables sector. According to Davies, there are two segments that could prove to be valuable for NatureWorks: automotive and cosmetics.

“Cosmetic packaging and personal care items may represent the greatest opportunity where Ingeo’s environmental advantage is close to the customer and its property profile is considered ideal for many applications,” he adds.

Biome’s Mines also notes that in the US, there is an opportunity for growth. “The US market is starting to become aware of the issues and the potential of biomaterials although is still behind Europe,” he observes. “There’s more interest in composting and several cities have proposed carrier bag bans. It’s on local agendas if not nationally, but there’s certainly a change in attitudes to a few years ago. I find I’m now over there more, talking to people and working with people.”

Two nations loom large in the supply of raw materials. According to Pira’s report, most of the production is located in Brazil while China is set to open a new bioplastic production capacity in 2013 – this move will make the country a major global player.

Pira says that now is a “critical phase” in the development of the bioplastics market. Established suppliers are expanding their production capacity while new suppliers are entering the market. On the face of it, this all points to an encouraging future for bioplastic packaging – all continents are on an upward curve. However the sector has several more hoops to jump through before the alternative to petroleum-based plastics improves on its 1% market share.

MARKET DRIVERS FOR BIOPLASTIC PACKAGING

Green culture. Bioplastic packaging could help brands to tap into consumers’ positive feelings to any products considered environmentally friendly.
Sustainability programmes of retailers and brand owners. Sustainable packaging is currently a hot topic and retailers and brands can differentiate their products.
Growth in non-biodegradable plant-based polymers. For the next five years, this could be a key driver for sustainable packaging with the commercialisation of bio-derived PE.
New production capacities. Suppliers are expanding their production capacities and new players are entering the market.
Framework conditions. Every region has been developing its industry standards, regulations, certification and labelling to encourage the biodegradable polymer market.
Replacing oil-based polymers. The need to replace oil-based polymers is hampered by production costs and the availability of bio-based feedstock. But the rising cost of crude oil is narrowing the price gap.
Government initiatives. The European Commission has appointed an ad-hoc Advisory Group for bio-based products.

(Source: The Future of Bioplastics for Packaging to 2020, Pira International)