Global Compostable Plastic Market Worth USD 5.51 Billion By 2031 | CAGR of 15.5%

Introduction

Plastic has long been the material of choice for packaging. However, because synthetic polymers can't degrade naturally, this negatively impacts the environment and human health. Globally, sustainability is currently in vogue. One way to encourage sustainable living is to use sustainable packaging. Packaging made from compostable plastic is an eco-friendly alternative to plastic. The plastic packaging materials PHA, PLA, PBS, PBAT, and starch blends can all be composted. These compostable polymers mimic the advantageous qualities of conventional plastic, such as barrier properties, durability, shelf stability, etc., except that they are completely compostable. PHA, one of the main ingredients for compostable plastic types, has yet to be widely commercialized because of high price issues. Several producers are currently implementing various strategies to lower the cost of PHA and maintain steady demand. Only 15 to 20 manufacturers operating in this market; most take care of the initial raw material processing. Due to the high demand for compostable plastic, these businesses' production capacities are changing quickly, and similar trends are anticipated throughout the forecast period.

Market Dynamics

Environmentally Friendly Practices and A Rise in Plastics Use by Consumers

Utilizing compostable plastic reduces carbon footprint by 42%. Due to these cutting-edge technical features and functionalities, major corporations like Coca-Cola, Nestle, Nike, and Ford are interested in producing and using compostable plastic materials in various applications. Increasing consumer awareness of sustainable products connected to urgent environmental issues, such as global warming, is driving the adoption of compostable plastic materials. Users favor bioplastics in various industries, such as catering, packaging, agriculture, and automotive. Compostable plastics are suitable for use in organic farming. Agricultural and horticultural farmers use mulching films. They decompose on the earth's surface using plant pots and fertilizer rods. Customers favor compostable plastic packaging over synthetic plastic packaging because it decomposes alongside food. Due to its high biodegradability, lack of toxicity, environmental friendliness, and ability to directly replace conventional plastic, compostable plastic is preferred. It has emerged as one of the market's key growth drivers.

A Rise in CSR Activities and Decreasing Dependence on Petroleum Resource

As consumer environmental concerns grow, businesses use sustainable and environmentally friendly alternatives to develop and strengthen their brand image. For instance, leading companies like Coca-Cola and PepsiCo focus on using bio-based PLA, PSA, and other bottles for beverage packaging. The high cost of bioplastics is a significant factor limiting the industry's growth. The fluctuating price of crude oil, which raises the price of heteroplastic, can solve this issue. This issue can be resolved by enhancing R&D and reducing reliance on petroleum resources. The sector is anticipated to use a forward integration strategy to create its value chain because it has a robust infrastructure and capital base. PepsiCo’s “green” PET bottle is entirely composed of biomaterials and shares the same molecular structure. Additionally, due to advancements in R&D, a small number of PLA and PBAT-based food packaging products are being created.

Regional Analysis

Europe is the highest contributor to the global compostable plastic market and is anticipated to grow at a CAGR of 14.8% during the forecast period. The promotion of sustainable and biodegradable government and environmental policies by European associations is a significant factor fueling the growth of the European market for compostable plastic. A rise in consumer demand for compostable goods sparks the growth of plastic products in Europe. Compostable products are preferred over conventional plastic ones by European consumers due to their benefits for the environment. Europe thus controls a sizable revenue market share in the global compostable plastic market. The legal framework and policies in Europe encourage the widespread use of products made of compostable plastic, which presents opportunities for market expansion. The government's encouragement of makers of compostable goods through its supportive policies is another significant factor influencing European market expansion.

North America is expected to grow at the fastest CAGR of 15.7% during the forecast period. The North American market is rapidly growing due to the addition of new manufacturing facilities. Supportive government regulations and policies for the production and consumption of sustainable products, as well as the rise in consumer environmental consciousness, influence manufacturers of synthetic plastics to favor the production of compostable plastic materials. Consumers prefer compostable plastic packaging due to growing environmental concerns about the non-degradability of synthetic plastic packaging materials. Additionally, the presence of informed consumers with significant purchasing power, high levels of environmental awareness, and a legal and regulatory environment are predicted to support the growth of the North American compostable plastic market. The increasing demand for compostable plastic cups in restaurants and confectioneries will drive the market demand.

Key Highlights

• The global compostable plastic market was valued at USD 1.50 billion in 2022. It is projected to reach USD 5.51 billion by 2031, growing at a CAGR of 15.5% during the forecast period (2023–2031).
• Based on type, the global compostable plastic market is bifurcated into home compostable plastic and others. The other segment is the highest contributor to the market and is anticipated to grow at a CAGR of 14.9% during the forecast period.
• Based on application, the global compostable plastic market is bifurcated into compostable bags, compostable cutlery, compostable straw, compostable gloves, compostable cups, and compostable trays/dishes. The compostable bags segment owns the highest market share and is forecasted to grow at a CAGR of 16% during the forecast period.
• Europe is the highest contributor to the global compostable plastic market and is expected to grow at a CAGR of 14.8% during the forecast period.

Competitive Players

Competitive Players

The global compostable plastic market’s major key players are Cargill Incorporated, PTT MCC Biochem Co., Ltd., Biome Technologies plc, Cardia Bioplastics, Grabio Greentech Corporation, Northern Technologies International Corporation, S.K. Chemicals Co., Ltd., Minima Technology Co. Ltd., Biotec Pvt. Ltd., Green Dot Holdings LLC, Plantic Technologies Limited, BASF SE, Total Corbion PLA, Synbra Technology BV, Futerro, Novamont SpA, NatureWorks LLC, Eastman Chemical Company, Trinseo, Danimer Scientific, FKuR Kunststoff GmbH.

Recent Developments

Market News

• In November 2022, A Master Collaboration Agreement (MCA) between NatureWorks, an advanced materials company and the world's top producer of polylactic acid (PLA), and CJ Biomaterials, Inc., a division of South Korean company CJ CheilJedang, calls for the two companies to work together on the development of sustainable materials solutions based on NatureWorks' IngeoTM biopolymer and PHACTTM Biodegradable Polymers from CJ Biomaterials.

• In March 2022, Genomatica, a leader in sustainable materials, and Asahi Kasei, a global manufacturer with a Japanese base, recently announced a strategic alliance to commercialize nylon made from Genomatica's bio-based HMDA (hexamethylenediamine) building block.

Segmentation

Global Compostable Plastic Market: Segmentation

By Type

• Home Compostable Plastic
• Others

By Application

• Compostable Cutlery
• Compostable Bag
• Compostable Straw
• Compostable Gloves
• Compostable Cup
• Compostable Tray/Dish

By Regions

• North America
• Europe
• Asia-Pacific
• LAMEA