Biodegradable Polymers Market

Market Overview

The global biodegradable polymers market size was valued at USD 8.0 billion in 2023 and is projected to reach a value of USD 46.6 billion by 2032, registering a CAGR of 21.6% during the forecast period (2024-2032). Biodegradable Polymer market share is expected to expand substantially, primarily due to the increasing use of biodegradable polymers in the packaging industry.

Biodegradable polymers, also known as biopolymers or bio-based polymers, are a type of material derived from renewable resources such as plants, animals, or microorganisms and designed to degrade naturally in the environment over time through biological processes such as microbial action or enzymatic degradation into harmless byproducts such as water, carbon dioxide, and biomass. These polymers provide an environmentally acceptable alternative to traditional petroleum-based plastics, decreasing pollution and waste generation while encouraging sustainability in various industries. 

Furthermore, the rising packaging industry and the use of biodegradable plastics in their packaging are projected to drive the growth of the biodegradable polymer market throughout the forecast period. Furthermore, the trend toward eco-friendly packaging materials in the textile and packaging industries will likely drive the growth of the biodegradable polymers market. Furthermore, increased demand for biodegradable plastics in agriculture, such as plant pots, containers, and fertilizer bags, will likely boost market expansion.

However, the cost of producing biodegradable polymers is higher than that of petroleum-based polymers, and it has been observed that some of the biodegradable polymers when decomposed, produce methane in landfills, which is expected to harm the market and impede the growth of the biodegradable polymers market in the forecasted years. 

Highlights

Starch-based plastics account for the largest share of the market by type.

Packaging generates the highest revenue share of the end-use industry.

Market Dynamics

Global Biodegradable Polymers Market Drivers

Stringent Government Regulations

Governments worldwide enact rigorous regulations and policies to combat plastic pollution and encourage using biodegradable materials. Mandates like single-use plastic bans and bio-based product incentives drive biodegradable polymer market expansion. The European Union (EU) has led regulatory efforts to combat plastic pollution, including the Single-Use Plastics Directive, which attempts to decrease the environmental effects of some plastic products. The regulation includes steps to limit the use of single-use plastics and encourage the use of sustainable alternatives, such as biodegradable polymers. On July 3, 2021, the EU outlawed single-use plastics such as plates, silverware, straws, and cotton buds. The EU also mandates tethered bottle caps on July 3, 2024, and PET bottles containing at least 25% recycled plastic by 2025 and 30% by 2030. The EU also intends to reduce packaging waste by 5% by 2030 and 15% by 2040 and have all packaging entirely recyclable by the end of the century.

In addition,  in October 2023, Brazil passed a draft measure to ban single-use plastics made from non-compostable materials within a year and non-recyclable or compostable plastic packaging within seven years. In India, The Indian government announced a ban on single-use plastics on August 12, 2021, under the Plastic Waste Management Amendment Rules, 2021. The ban went into effect on July 1, 2022, covering the production, import, stockpiling, distribution, sale, and use of single-use plastic items. These goods include lightweight plastic bags, plastic bud sticks, balloon sticks, plastic flags, and candy sticks. 

As regulatory demands increase, biodegradable polymer makers are well positioned to capitalize on rising market opportunities and contribute to the transition to a more sustainable and environmentally conscious economy.

Global Biodegradable Polymers Market Restraints:

High Production costs

One of the key challenges for biodegradable polymers is their greater manufacturing costs compared to traditional petroleum-based plastics. The cost of raw materials, processing, and manufacturing procedures used to produce biodegradable polymers can be much greater, making them less economically viable for some applications. Biodegradable plastics are typically priced between USD 3.35 and USD 4.69 per kilogram, slightly higher than other conventional polymers. Biopolymer production costs range between USD 0.10 and USD 0.66 per kilogram, depending on market prices for glycerol and starch. In August 2023, the average price of crude glycerol for export in the US was USD 448 per ton, up 25% from the previous month. The average price of crude glycerol for import in the US was USD 489 per ton, up 13% from the previous month. 

Glycerol prices in the United States climbed by 11% in April 2019 to USD 958 per metric ton. In 2024, the US's wholesale price range for maize starch is between USD 0.44 and USD 1.36 per kilogram, or USD 0.20 to USD 0.62 per pound. Wholesale prices for potato starch range from USD 0.67 to USD 1.33 per kilogram or USD 0.30 to USD 0.60 per pound. 

Additionally, PLA production also competes with the food and feed markets for raw materials such as corn or sugarcane, causing feedstock price swings and affecting PLA production costs overall. Furthermore, extensive quality control techniques are required to maintain product purity and consistency, which increases production costs. Thus, biodegradable polymers' higher production costs are a barrier to widespread adoption across numerous industries, particularly in price-sensitive areas like packaging, where cost concerns play an important role in material selection. Manufacturers are looking into ways to improve manufacturing processes, reduce prices, and increase production capacity to meet the challenge of high production costs and make biodegradable polymers more competitive in the market.

Global Biodegradable Polymers Market Opportunity:

Increasing Demand for Sustainable Packaging

With rising consumer awareness and regulatory pressure to reduce plastic waste, the packaging business offers a big opportunity for biodegradable polymers. Biodegradable polymers provide sustainable alternatives to standard plastics for single-use packaging applications such as food containers, disposable cutlery, and shopping bags. As companies and retailers strive to improve their sustainability credentials, the demand for biodegradable packaging solutions will likely increase, propelling market expansion.

In 2023, Europe has prioritized sustainable packaging with the European Parliament's new position on the Packaging and Packaging Waste Regulation, which includes minimizing extra packaging and waste, prohibiting "forever chemicals" in food packaging, and increasing reuse and recycling. On October 24, 2023, the European Environment Committee voted on the regulation's revisions, and on November 22, 2023, the Parliament accepted the updated rules. 

Furthermore, according to a McKinsey survey, roughly half of US consumers are willing to spend 1 to 3% more for sustainable packaging, 25% are willing to pay 4 to 7% more, and approximately 12% are willing to pay 7 to 10% more. Major food corporations like Nestlé, Danone, and PepsiCo have pledged to shift to sustainable packaging and minimize their usage of single-use plastics. To satisfy their sustainability aims and consumer expectations, these companies consider different sustainable packaging choices, such as biodegradable polymers. 

Similarly, Corona India, a beer brand owned by Anheuser Busch InBev, will unveil a 100% biodegradable and compostable six-pack made entirely of barley straw in India in June 2022. With circularity at the heart of this innovation, Corona collaborates with barley farmers in India to purchase excess straw, frequently the source of crop burning, a significant issue in North India, to produce these 100% biodegradable compostable six-packs.

Regional Analysis

Asia-Pacific Dominates the Global Market

The global biodegradable polymers market analysis is conducted in North America, Europe, Asia-Pacific, the Middle East and Africa, and Latin America.

Asia-Pacific is the most significant global biodegradable polymers market shareholder and is estimated to grow at a CAGR of 21.3% over the forecast period. China has the greatest GDP in Asia-Pacific. Chinese plastics manufacturers, who account for nearly 29% of global plastic production, are focusing on increasing the use of corn, sugar, and other crops to develop biodegradable plastics, as concerns about environmental pollution have prompted Beijing directives and the possibility of a ban on conventional plastics single-use non-biodegradable plastics such as cutlery, plastic bags, and packaging. According to Interpak 2023, China accounts for a considerable portion of the worldwide flexible packaging market. The country's flexible packaging market is expected to develop at an average annual rate of 8% until 2022, compared to a global average of 4.3%. This expansion in the packaging business is primarily driven by dynamic economic development, rapid urbanization, and improvements in people's quality of life. Consumers increasingly prefer safe, convenient, creative, and environmentally responsible packaging.

Additionally, consumers are increasingly concerned about the materials used in packaging and their influence on their health and the environment. Companies are concentrating on transforming biodegradable plastic packaging. Food and beverage packaging is a major driver of demand for biodegradable polymers. According to Interpak 2023, China's entire retail trade in food packaging will reach 447,066 million units in 2023. Furthermore, China has a substantial presence in producing large quantities of plastics, which generates cash from trade exports and creates huge production capacity for various packaging industries. According to the International Trade Center (ITC), China shipped plastics and articles worth around USD 131.07 billion in 2021, a 36% increase over the previous year's shipments of USD 96.38 billion.

Moreover, plastic film mulching has been extremely beneficial to the Chinese agriculture business due to its impacts on soil warming, moisture conservation, and weed control. Plastic film usage standards have been enhanced, and appropriate procedures are being developed for multipurpose plastic film, mechanization of residue recycling technologies, and the substitution of polythene with biodegradable polymer films. This biodegradable plastic film mulching technology has increased grain crop yields by 20-50% and is important to the country's agricultural supply. 

Europe is anticipated to exhibit a CAGR of 21.9% over the forecast period. Between 2006 and 2018, Europe reduced the amount of plastic garbage sent to landfills by 44%. It is the first market to take the initiative to recycle non-decomposable waste. According to one survey, 29 million metric tonnes of plastic were recovered from European countries in 2018. Consumer acceptance of plant-based products and an abundant supply of recyclable raw materials are propelling the market in Germany. Germany is the leading producer of biodegradable polymers. By 2025, the country's consumption of petroleum-based plastics is predicted to decrease by 20%. The Bioeconomy Strategy and Action Plans implemented by the EU and UN are major motivators for Germany to become a market leader.

North America holds a sizable market share during the predicted period. Growing environmental concerns and awareness of the use of renewable polymers are projected to propel market expansion. Stringent laws and active promotion of sustainable practices promote environmentally favorable alternatives. The United States is among the largest consumers of plastic bags and packaging. As a result, waste plastic recovery, recycling targets, and trash collection and disposal legislation all help to boost the biodegradable polymer business in the US.

Segmental Analysis

The global biodegradable polymers market is segmented based on type and end-user industry.

The market is further segmented by type into Starch-Based Plastics, polylactic Acid, Polyhydroxy Alkanoates, Polyesters, and Cellulose Derivatives.

The leading product segment for biodegradable plastic was starch-based, accounting for more than 45% of total revenue. Starch-based polymers are made from renewable starches such as corn, wheat, and potatoes. These polymers are often made of starch granules combined with biodegradable polymers like polylactic acid (PLA) or polybutylene adipate-co-terephthalate. Starch-based polymers have excellent mechanical qualities and are widely utilized in packaging applications, disposable flatware, and agricultural mulch films. Under the right conditions, they biodegrade, converting carbon dioxide, water, and biomass through microbial action.

PHA is expected to have a significant increase over the forecast period. Polyhydroxyalkanoates (PHA) are biodegradable polymers generated by microorganisms under specific conditions. PHA polymers are highly adaptable and can be designed to have a variety of qualities, including flexibility, strength, and biodegradability. PHA is utilized in packaging, medical equipment, agricultural films, and consumer items because it is biocompatible and environmentally friendly. 

Additionally, PHA is widely employed in medicinal applications, including medication encapsulation and medical implants. Other medicinal applications include tissue engineering, bone marrow scaffolding, and bone plates. Aside from medicinal applications, PHA makes compost bags, agricultural foil and films, and food and beverage packaging. These factors are predicted to drive the global expansion of PHA.

The end-user industry can further bifurcate the market into agriculture, textiles, consumer goods, packaging, and healthcare.

Packaging was the leading application category for biodegradable plastic, accounting for more than 60% of the sales. Biodegradable polymers are widely used in the packaging sector, with applications including food packaging, beverage containers, personal care items, and industrial packaging. Unlike traditional plastics, biodegradable packaging materials have benefits such as compostability, recyclability, and a lower environmental impact. Biodegradable packaging solutions assist companies and retailers in meeting sustainability objectives, complying with regulatory standards, and appealing to environmentally conscious consumers looking for ecologically friendly packaging alternatives.

Furthermore, consumption of bio-degradable polymers is expanding in Europe and North America due to stringent government rules prohibiting the use of petroleum-based plastics and an increase in the use of bio-degradable polymers in rigid bottle packaging. The packaging sector in developing regions, such as Asia-Pacific, South America, and the Middle East, is predicted to rise throughout the forecast period as food packaging requirements in these regions improve, according to several food and safety organizations. As a result, it is likely to drive the growth of the bio-degradable polymers market over the forecast period. 

Biodegradable polymers are used in agriculture for various purposes, including mulch films, seed coatings, and soil stability mats. Biodegradable mulch films help to retain soil moisture, decrease weed growth, and increase crop production while reducing plastic waste in agricultural fields. Seed coverings created from biodegradable polymers defend against pests, diseases, and harsh environmental conditions while boosting seed germination and plant growth. Biodegradable soil stabilization mats help to minimize soil erosion and promote revegetation in environmentally sensitive locations.

Recent Developments

April 2024: dsm-Firmenich announced the EU license of Hy-D® for ruminants and rejuvenation in poultry and pigs.

January 2024: HAVIT, a smart electronic technology firm specializing in audio products, announced its commitment to environmental sustainability by launching a new eco-friendly packaging scheme.

April 2024: Toray developed a biodegradable spherical polyamide with four fine particles.