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The compostable plastic market size is forecast to increase by USD 2.89 billion, at a CAGR of 19.16% between 2023 and 2028. The market's expansion hinges on various factors, notably the escalating adoption of compostable packaging and the mounting environmental risks linked with conventional plastics, which propel the demand for compostable plastics. Heightened consciousness surrounding environmental issues pertaining to plastic usage further drives this trend. As consumers become more environmentally aware, there's a notable shift towards sustainable alternatives like compostable plastics. This transition underscores a broader movement towards eco-friendly solutions and reflects changing consumer preferences towards products with reduced environmental impact. With an increasing emphasis on sustainability and environmental responsibility, the market for compostable plastics is poised for significant growth, catering to the evolving needs of environmentally-conscious consumers and businesses alike.
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The market is driven by the increasing emphasis on environmental sustainability, with a growing awareness of the adverse effects of traditional plastics. Governmental initiatives and green procurement policies further propel demand. Biodegradable plastics, particularly those derived from renewable sources like polylactic acid (PLA) and starch bags, are gaining traction. Rising consumer awareness and the adoption of compostable plastic packaging by food and beverage firms and restaurants signify key trends. However, challenges persist in the extraction and refining of bio-based materials and ensuring widespread adoption amidst competition from traditional polymers and petrochemical counterparts. Our researchers analyzed the data with 2022 as the base year and the key drivers, trends, and challenges. A holistic analysis of drivers will help companies refine their marketing strategies to gain a competitive advantage.
The increasing awareness of environmental concerns regarding plastic usage is notably driving market growth. Growing environmental awareness has made consumers more likely to purchase eco-friendly goods. As environmental concerns about plastic usage rise, compostable plastics are becoming more common. Recently, a brand-new line of compostable plastic-packaged coffee capsules was unveiled. Compostable capsules offer the chance to recover used coffee grounds, allowing for their processing at a facility where they can add valuable nutrients to the finished compost, in addition to addressing consumer concerns and keeping packaging out of landfills. Thus, one of the key factors anticipated to fuel the growth of the global market is rising awareness of environmental concerns regarding the use of plastic during the forecast period.
The growing number of investments, collaborations, and agreements among companies is an emerging trend in market growth. The companies that are active in the global market are attempting to concentrate on investments, partnerships, innovation, new product introductions, acquisitions, and growth. During the forecast period, these steps taken by companies will help marketers offer the best product and hold the largest market share. For example, the development of compostable bioplastics was to be aided by a USD 1 million investment in BOSK Bioproducts Inc. from the Canadian Department of Natural Resources in April 2021. BOSK Bioproducts Inc. will be able to develop products and enhance their compatibility with manufacturers of existing machinery due to this funding.
Similarly, in order to distribute biopolymer Ecovio for certified compostable bags, BASF SE and WPO Polymers teamed up in September 2021. Regarding the new rules, Ecovio is primarily employed to create plastic films for fruit and vegetable bags, organic waste bags, and certified compostable shopping bags, in addition to the mandated use of compostable bags by food service establishments and retailers. The use of plastic bags is now subject to stricter regulations in Spain, and BASF anticipates that this will lead to a rise in the demand for its resins. Thus, these factors are expected to drive the growth of the global market during the forecast period.
The high costs of compostable plastics compared with conventional plastics is a major challenge impeding market growth. Currently, the price of compostable plastic ranges from USD 2.65 to USD 6.68 per kilogram, compared to only USD 1.65 for conventional plastics. Other factors contributing to the low demand for bioplastics include high production costs due to companies' small-scale production, high R&D expenditures, and significant price differences between conventional petroleum-based plastics and bioplastics.
Compostable plastics are produced at a cost that is 25% to 75% higher than that of traditional plastics. This is primarily caused by the high cost of polymerization. The majority of the processes are also still in the development phase and have not yet reached economies of scale. Furthermore, since the technology is still in its infancy and various raw materials are being tested for the best production of plastics, one of the main problems with the production of compostable plastics is its unconvincing technology. Thus, such factors are expected to hinder the growth of the global market during the forecast period.
The market research report includes the adoption lifecycle of the market research and growth, covering from the innovator’s stage to the laggard’s stage. It focuses on adoption rates in different regions based on penetration. Furthermore, the report also includes key purchase criteria and drivers of price sensitivity to help companies evaluate and develop their market growth and forecasting strategies.
Customer Landscape
Companies are implementing various strategies, such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the market.
Green Dot Bioplastics Inc. - The company focuses on offering bio-composites, biodegradable, elastomers, starch composites and wood composites. The key offerings of the company include compostable plastics under its brand RENEW.
The report also includes detailed analyses of the competitive landscape of the market and information about 15 market companies, including:
Qualitative and quantitative analysis of companies has been conducted to help clients understand the wider business environment as well as the strengths and weaknesses of key market players. Data is qualitatively analyzed to categorize companies as pure play, category-focused, industry-focused, and diversified; it is quantitatively analyzed to categorize companies as dominant, leading, strong, tentative, and weak.
The market share growth by the packaging segment will be significant during the forecast period. The largest use of compostable plastics is in packaging. Bottles, loose-fill, cups, pots, blows, flexible films, and other products are made using these. Flexible and rigid packaging are the two most popular types of compostable packaging. Fresh food, dry snacks, candy, bakery goods, juice bottles, meat trays, as well as coatings for beverage cups, films, and card stock are all packaged with products made of compostable plastics.
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The packaging segment was valued at USD 710.20 billion in 2018. For the packaging of premium and branded products with specific requirements, as well as organic food, bioplastic packaging such as compostable packaging is in high demand. More than 60% of bioplastics are used in packaging. These are utilized in the packaging of food, cosmetics, and other materials. Furthermore, the global e-commerce sector largely controls the packaging market. For packaging purposes, the e-commerce sector frequently makes use of foam, carrier bags, and shrink wrap. During the forecast period, the strong global e-commerce sector will fuel demand for packaging materials. Additionally, in 2020, the US, China, Japan, and India were among the top markets for food services globally. Due to their large population strength, these countries need a lot of food packaging materials. The growing world population will, therefore, increase the demand for food and fuel the market for food packaging materials. Thus, all such factors are anticipated to fuel the growth of the market during the forecast period.
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Europe is estimated to contribute 40% to the growth of the global market during the forecast period. Technavio’s analysts have elaborately explained the regional trends and drivers that shape the market during the forecast period. In terms of consumption, Europe accounted for one of the largest shares of the global market in 2022. The sizeable market share is attributed to the consumers' high demand for eco-friendly packaging materials. Government agencies support this high demand because such products are good for the environment. In order to encourage the use of bioplastics, numerous European nations have also established infrastructure for composting.
The two biggest markets in Europe are Germany and France. The production of plastic materials, plastic processing, and plastic machinery make up the three main subsectors of the German plastics industry. German consumer goods, packaging, automotive, and construction are the main end-user industries. By creating new materials, inventive additives, and other substance-improving materials, the region's abundance of manufacturers and processors also aids in the expansion of the market. These factors are anticipated to fuel the market for compostable plastic in the nation during the forecast period.
The market research report provides comprehensive data (region-wise segment analysis), with forecasts and estimates in "USD Billion" for the period 2024 to 2028, as well as historical data from 2018 to 2022 for the following segments.
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The market is experiencing significant growth driven by various factors, including the need to manage municipal waste more sustainably and the implementation of standards like BS N13432 for compostable containers and silverware. With a shift from synthetic to biobased products, there's a rising demand for renewable feedstock and plant-based materials such as corn starch and other bio-based materials. Industries like medical devices and construction are increasingly adopting biodegradable options for products like implants, sutures, and insulation. This growth is fueled by rising environmental awareness and the demand for sustainable packaging across sectors like cosmetics, homecare, and healthcare. The e-commerce industry is also embracing environmentally friendly packaging to reduce plastic pollution and carbon footprint during transportation.
Further, the BS N13432 standard serves as a benchmark for ensuring the quality and effectiveness of plant-based materials and bio-based materials used in various applications, including temporary implants, surgeries, and biodegradable sutures. These materials are also gaining traction in drug delivery systems, construction materials, and biodegradable insulation, contributing to the reduction of plastic waste and the development of niche products. With a focus on ethical waste management, industries like grocery shops and the e-commerce industry are adopting compostable shipping materials and mailing bags to facilitate online shopping while minimizing environmental impact. Innovations in material technology ensure durability and shelf life, while consumer education and labeling initiatives promote awareness, especially in sectors like cosmetics and personal care.
Market Scope |
|
Report Coverage |
Details |
Page number |
201 |
Base year |
2023 |
Historic period |
2018 - 2022 |
Forecast period |
2024-2028 |
Growth momentum & CAGR |
Accelerate at a CAGR of 19.16% |
Market Growth 2024-2028 |
USD 2.89 billion |
Market structure |
Fragmented |
YoY growth 2023-2024(%) |
15.6 |
Regional analysis |
Europe, North America, APAC, South America, and Middle East and Africa |
Performing market contribution |
Europe at 40% |
Key countries |
US, Germany, UK, France, and China |
Competitive landscape |
Leading Companies, Market Positioning of Companies, Competitive Strategies, and Industry Risks |
Key companies profiled |
BASF SE, BEWI ASA, Biome Technologies plc, BioTec Bags India Pvt. Ltd., BOSK Bioproducts, Cargill Inc., Danimer Scientific Inc., Eastman Chemical Co., Fkur Kunststoff GmbH, Futerro SA, Green Dot Bioplastics Inc., Kaneka Corp., KURARAY Co. Ltd., Mitsubishi Chemical Corp., Neste Corp., Northern Technologies International Corp., Novamont S.p.A., SK Chemicals Co. Ltd., Toray Industries Inc., TotalEnergies SE, and Trinseo PLC |
Market dynamics |
Parent market growth analysis, Market Forecasting, Market growth inducers and obstacles, Fast-growing and slow-growing segment analysis, COVID-19 impact and recovery analysis and future consumer dynamics, and Market condition analysis for the market forecast period. |
Customization purview |
If our market report has not included the data that you are looking for, you can reach out to our analysts and get segments customized. |
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1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation by End-user
7 Market Segmentation by Product
8 Customer Landscape
9 Geographic Landscape
10 Drivers, Challenges, and Opportunity/Restraints
11 Competitive Landscape
12 Competitive Analysis
13 Appendix
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