Canadian Packaging

Rapid Growth In Store For Biodegradable Plastics


October 27, 2008
by Canadian Packaging Staff

Despite the early teething pains and rising raw material costs, the demand for biodegradable plastics in the U.S. is expected to rise by 15 per cent annually to 720 million pounds by 2012, according to a new study from the Cleveland, Ohio-based market research firm The Freedonia Group, Inc.

Estimated to be worth US$845 million in 2012, the market for biodegradable plastics—currently representing less than half of a percentage point of all the thermoplastic demand in the U.S. is 2007—will continue to be driven by global anxieties over the rising crude oil prices and fears over the supply of oil, the Biodegradable Plastic report suggests, as well as growing public concerns over the environment.

“Escalating crude oil prices have made biodegradable plastics, which are sourced from renewable resources such as corn, more cost-competitive with petroleum-based conventional resin,” the report states.

“However, continued price declines are necessary for the anticipated biodegradables growth, ” the study’s authors point out, “and among the main threats to further declines in biodegradable prices are the rapidly rising prices for corn.”

Accounting for nearly three-quarters of all the biodegradable plastics used in the U.S. last year, the packaging sector will continue to be the biggest end-use industry for these plastics in 2012—with foodservice products and film goods representing the fastest-growth opportunities.

However, study also expects fiber markets—mainly the bedding, apparel and nonwoven segments—to boost their consumption of biodegradable plastics, along with the carpet, coatings, and injection- and blowmolded products.

The Freedonia Group report expects the demand for starch-based plastics to grow annually by 16.8 per cent to 293 million pounds by 2012, thanks to improved resin blends and increased use in foodservice items such as disposable plates, bowls and cutlery.

“The demand for PLA (polylactic acid) will expand by nearly 20 per cent per annum due to capacity additions and broadened applications brought about by resin improvements, as well as greater processor familiarity.

“Good opportunities are expected for PLA in areas such as thermoformed food packaging, and bedding and apparel fibers.”

For its part, U.S. market demand for polyester-based biodegradables is expected to soar by 25 per cent through 2012, according to the study.

“Gains will reflect significant capacity advances,” the report predicts, “and a more competitive pricing structure and opportunities in film and fiber products, such as compostable yard-bags and pallet-wrap, as well as fibers for apparel and nonwoven fabrics.”