The bioplastics market is expected to grow at a CAGR of 33% during the forecast period. Emergence of bio-based and renewable raw materials, Growing prominence of bioplastic, and Government initiatives for increasing the use of bioplastic packaging are some of the significant factors fueling bioplastics market growth.
Emergence of bio-based and renewable raw materials
Cost-effectiveness of conventional plastic over bioplastics
The cost of production of bioplastics is 25%-75% more than conventional plastics. This is mainly due to the high polymerization cost. In addition, most of the processes are in the development stage and have not achieved economy of scale. Lack of required supply chain network at upcoming capacity locations is another challenge in the market. One of the main issues in the production of bioplastic is its unconvincing technology because the current technology is still in the nascent stage of development and different raw materials are being tested for the optimal production of bioplastics.
At present, the cost of bioplastics varies from $2.65 per kilogram to $6.68 per kilogram compared to that of the conventional plastics, which is only $1.65 per kilogram. High production cost because of small scale production by vendors, high R&D cost incurred by the vendors, and substantial difference in the price of conventional petroleum-based plastics and bioplastics are some of the other reasons accounting for the low demand for bioplastics.
Durability of bioplastics
The functional attributes of green plastics compared to conventional petroleum-based plastics include low barrier properties to air, water, oxygen, and low resistance to heat. Tests and trials are being carried out to increase the durability of bioplastics. Recovery of bioplastics from biomass leads to high purification with reduced processing cost. For instance, water molecules attack the ester linkages in PLA bioplastics, causing breakdown of the material; this does not happen in conventional plastics. Poor mechanical properties and process capabilities of bioplastics have been restricting the growth of the bioplastics market, and therefore, inhibiting its use in different applications. Research and innovations in the field of enhanced polymerization and blending techniques will improve critical properties and make bioplastics more competitive.
Complexity in adopting bioplastics over conventional plastics
In 2018, bioplastics represent around 2%-3% of the total plastics market, accounting for 360 million tons of annual plastic production. The consumers by far lack the proper understanding of the bioplastics because of the lack of knowledge regarding the benefits of bioplastics. They are not able to adopt bioplastics over the traditionally used petroleum-based plastics because bioplastics are costlier than conventional plastics, and moreover, consumers are not bothered about the ill effects of conventional plastics over bio-based plastics. The government is not being able to put a complete ban on the use of conventional plastics because they are used in many industries and there is no cheap substitute available till date to replace these plastics.
Bioplastics involve complex process as there are major factors to be considered while manufacturing them. It is a challenge for vendors to manufacture a sustainable product that is suitable throughout the value chain as factors such as the carbon footprint of the product, availability of raw material, feasibility, and business impact of the alternative feedstock over the conventional materials needs to be considered. Like the conventional petroleum-based plastics, the bioplastic materials must provide durability, protection, should be tamper-proof, and should have a long shelf life.
Another factor that is currently affecting the bioplastics industry is the operational difficulties. Raw materials for bioplastics come from different starch sources such as corn, wheat, beets, and potatoes. The first step is to extract dextrose from the starch. The second process is to convert the dextrose into lactic acid by fermentation. The lactic is then converted into lactides, which are then converted into PLA polymers used for bioplastic packaging.
To adopt bioplastic materials, significant amounts of time and money is invested, which increases the processing time and subsequent expense. This does not justify the shift to the new material.
High manufacturing cost for bioplastic
The cost of bioplastic materials is higher than that of conventional plastic materials. This is because of the limited availability of bio-based feedstock for producing bioplastic materials. Bioplastics are manufactured from renewable biomass sources such as corn starch, vegetable fats and oils, straw, food waste, and woodchips. The price of vegetable oils such as palm oil is increasing. For instance, the price of palm oil was likely to increase by around 8.4% by June 2019. Similarly, the price of barley straw in England and Wales increased from around $68 to $118 during February 2017-February 2018. Also, the prices of renewable raw materials, such as corn and sugarcane, are volatile. For instance, the price of corn increased by around 6.5% during 2018-2019.
The production process of bioplastics materials through agro-based raw materials is complex. The cost of R&D constitutes a major share of investment in bioplastics and has an impact on material and product prices. Thus, the increase in the price of raw materials will reduce the profit margins of vendors due to the rise in production costs of bioplastics. Hence, vendors are compelled to pass on these costs to end-users. This will hinder the growth of the market during the forecast period.
