Biodegradable Plastics Market

Market Definition

Biodegradable plastics are designed to break down into natural substances, such as water, carbon dioxide, and biomass, through the action of microorganisms like bacteria, fungi, and algae. Biodegradable plastics decompose more quickly, with microorganisms using the plastic as a food source and converting it into simpler, environmentally harmless substances.

These plastics are commonly used in applications such as packaging materials, agricultural films, and medical products (like dissolvable stitches), offering a promising solution to reduce plastic waste across various industries.

Biodegradable Plastics Market Overview

The biodegradable plastics market size was valued at USD 8.14 billion in 2023 and is projected to grow from USD 9.50 billion in 2024 to USD 32.61 billion by 2031, exhibiting a CAGR of 19.27% during the forecast period.

The use of biodegradable plastics is increasing, due to their potential to reduce plastic pollution, growing consumer demand for eco-friendly products, and increasing regulations aimed at reducing environmental harm caused by traditional plastics.

This growth is further driven by their widening application scope in industries such as packaging, agriculture, medical devices, and textiles, as businesses seek sustainable alternatives to traditional plastics to minimize their environmental impact

Major companies operating in the biodegradable plastics market are NatureWorks LLC, BASF, Mitsubishi Chemical Group Corporation, Biome Bioplastics, Plantics, FKuR, Danimer Scientific, TORAY INDUSTRIES, INC., Novamont S.p.A, Cargill, Eastman Chemical Company, Trinseo, and LyondellBasell Industries.

The market is registering robust growth driven by increasing consumer demand for sustainable products, stricter environmental regulations, innovations in bioplastics technology, and the growing need to reduce plastic waste and its impact on the environment.

Ongoing advancements in bioplastics production and materials are making biodegradable plastics more versatile, cost-effective, and scalable. Research and development in new biodegradable polymers, such as PLA (Polylactic Acid) and PHA (Polyhydroxyalkanoates), are expanding their range of applications, making them viable for use in various industries like automotive, textiles, and electronics.

Key Highlights

1. The biodegradable plastics industry size was valued at USD 8.14 billion in 2023.
2. The market is projected to grow at a CAGR of 19.27% from 2024 to 2031.
3. Europe held a market share of 35.47% in 2023, with a valuation of USD 2.89 billion.
4. The packaging segment garnered USD 4.20 billion in revenue in 2023.
5. The Polyactic Acid (PLA) segment is expected to reach USD 13.66 billion by 2031.
6. The market in Europe is anticipated to grow at a CAGR of 19.85% during the forecast period.

Market Driver

"Rising Demand for Biodegradable Plastics Amid Plastic Pollution Concerns"

Growing concerns over plastic pollution and its detrimental effects on the environment have led to increased consumer demand for sustainable alternatives, driving the adoption of biodegradable plastics. The demand for biodegradable alternatives continues to grow as individuals, businesses, and governments become more mindful of their environmental impact.

• For instance, in April 2024, the European Union's (EU) proposed revision of the Packaging and Packaging Waste legislation aims to reduce packaging waste, improve recycling, and reduce reliance on primary resources. Key targets include cutting packaging waste by 15% per capita by 2040, increasing the use of recycled plastics, and ensuring that all packaging is recyclable by 2030. Companies will need to offer reusable or refillable options, and certain single-use packaging will be banned. The revision also mandates deposit return systems and sets requirements for recycled content in plastic packaging to support the recycling market.

These improvements are designed to help the EU achieve a significant reduction in packaging waste. The emphasis on reusable and refillable packaging reduces reliance on single-use plastics, promoting more sustainable alternatives. 

Additionally, mandatory recycled content in packaging reduces the need for primary resources, minimizing the environmental impact of plastic production. 

The measures also aim to enhance consumer awareness through standardized packaging formats and clear recyclability labels, encouraging greater participation in waste reduction. As a result, the EU is driving sustainability and advancing a more efficient, circular economy.

Market Challenge

"Absence of Sufficient Recycling and Disposal Infrastructure"

The biodegradable plastics market faces one of its most important key challenges in the lack of proper infrastructure for disposal and recycling. Many biodegradable plastics require specific conditions, such as industrial composting facilities, to break down effectively. 

However, these facilities are not widely available in many regions, leading to confusion about how to properly dispose of biodegradable plastics. As a result, they may end up in landfills or the environment, where they may not degrade as intended, contributing to plastic pollution. 

This gap in infrastructure significantly limits the potential benefits of biodegradable plastics. Key players in the market are investing in the development of industrial composting facilities and improving waste management systems. 

Companies are also working on creating standardized labeling for biodegradable plastics to ensure proper disposal, while collaborating with governments and industry stakeholders to promote the growth of recycling infrastructure and sustainable practices.

Market Trend

"Increased Use of Plant-based Bio Plastics"

The increasing adoption of plant-based bioplastics, such as PLA and PHA, derived from renewable sources like corn and sugarcane, is driven by environmental concerns and regulatory pressures. These materials offer a sustainable alternative to traditional petroleum-based plastics, with advancements in bioplastic technology improving their cost-effectiveness and broadening their use across various industries.

• In January 2024, European Bioplastics urged policymakers to accelerate biopolymer growth by promoting research, improving recycling, and creating favorable market conditions. The goal is to support sustainability, reduce carbon emissions, and help meet EU climate targets.

The growing use of plant-based bioplastics, such as PLA and PHA, is a key trend in the biodegradable plastic market, driven by environmental concerns and the shift toward sustainable alternatives. 

With advancements in production technologies making them more cost-competitive, plant-based bioplastics are becoming a preferred choice for packaging, agriculture, and other applications, aligning with the global push toward sustainability.

Biodegradable Plastics Market Report Snapshot

 Market Segmentation

• By Type (Starch Blends, PLA (Polylactic Acid), PHA(Polyhydroxyalkanoates), Others): The PLA (Polylactic Acid) segment earned USD 3.29 billion in 2023, due to its applications and advanced use in sustainable packaging, food containers, agricultural films, and textiles, as well as its biodegradability and growing preference over petroleum-based plastics in response to environmental concerns.  
• By End-Use Industry (Packaging, Agriculture, Textiles and Consumer Goods): The packaging segment held 51.65% share of the market in 2023, due to the increasing demand for sustainable and eco-friendly packaging solutions, driven by environmental regulations, consumer preferences for biodegradable options, and the growing adoption of plant-based bioplastics like PLA and PHA.

Biodegradable Plastics Market Regional Analysis

Europe accounted for a significant market share of around 35.47% in 2023, valued at USD 2.89 billion. The dominance in the market can be attributed to stringent environmental regulations, strong government support for sustainability initiatives, and high consumer awareness of plastic pollution. 

Countries like Germany, France, and the UK are leading the way in implementing policies that encourage the use of biodegradable plastics, fostering innovation, and creating demand for eco-friendly alternatives across various industries. 

These nations are also driving the market through investments in research and development, promoting circular economy models, and setting ambitious targets to reduce plastic waste and carbon emissions, further solidifying Europe's leadership in the biodegradable plastic market.

• For instance, in 2024, BIO-PLASTICS EUROPE is dedicated to advancing innovative, sustainable strategies and solutions for bio-based products, aligning with the EU Plastics Strategy and fostering a Circular Economy. By promoting the adoption of biodegradable plastics, it aims to reduce environmental impact, enhance resource efficiency, and support the transition to eco-friendly alternatives in the global plastics market.
• In 2024, according to European Bioplastics e.V. (EUBP), bioplastics currently account for approximately 0.5% of the nearly 414 million tonnes of plastic produced annually, with global plastic production consistently increasing due to rising demand and advanced applications. Reflecting this trend, the global bioplastics production capacity is projected to grow substantially, from 2.47 million tonnes in 2024 to 5.73 million tonnes by 2029, signaling significant opportunities for biodegradable plastics amid growing environmental concerns and regulatory support.

The market in North America is poised to grow at a CAGR of 19.59% through the projection period. Leading countries like the U.S. and Canada are driving this growth through robust regulatory support, increasing demand for sustainable products, and significant investments in research & development for eco-friendly solutions.

• In May 2023, Dow Inc. partnered with New Energy Blue in a long-term agreement to produce bio-based ethylene from agricultural residues like corn stover. This initiative reduces carbon emissions in plastic production and supports recyclable applications in transportation, footwear, and packaging, highlighting Dow's commitment to sustainability within the biodegradable plastics market.

Regulatory Framework Also Plays a Significant Role in Shaping the Market

• The ASTM International standards for biodegradable plastics, outlined in their feature article, provide guidelines and criteria for testing and certifying biodegradable plastics. These standards, such as ASTM D6400 and ASTM D6868, help ensure that biodegradable plastics meet specific requirements for compostability and environmental performance. The standards are essential for manufacturers to verify that their products break down in composting environments, minimizing environmental impact and promoting sustainable alternatives to conventional plastics. These guidelines are crucial for both the industry and consumers in ensuring proper disposal and environmental benefits.
• Federal and State Regulations: The U.S. has varied regulations at both the state and federal levels. Some states, like California, have enacted laws banning specific plastic products and promoting alternatives like biodegradable plastics. For example, California introduced a legislation to ban single-use plastic bags in 2016 and extended similar bans on plastic straws and utensils. Meanwhile, the federal government is focused on improving recycling programs, with the Environmental Protection Agency (EPA) unveiling the "National Recycling Strategy" in 2020 to enhance waste management and recycling systems across the country. Additionally, the U.S. is moving toward expanding sustainable packaging policies to promote the use of biodegradable plastics and reduce environmental impact.
• In Asia Pacific, countries like China, Japan, and India are taking significant steps to address plastic waste and promote biodegradable alternatives. China, for instance, has been focusing on reducing plastic waste by promoting biodegradable plastics and announced plans to restrict plastic waste and encourage sustainable alternatives. Japan, known for its stringent recycling and plastic waste management regulations, is increasingly exploring biodegradable plastics as a means to reduce landfill waste. Similarly, India has introduced regulations aimed at curbing plastic use, actively encouraging the adoption of biodegradable alternatives to reduce environmental impact. These efforts highlight the region's growing commitment to sustainable solutions in the face of plastic pollution.

Competitive Landscape

The biodegradable plastics market is characterized by a large number of participants, including both established corporations and rising organizations.

To achieve a competitive advantage in this continuously changing industry, these organizations pursue variety of strategic initiatives. Major strategies include new product innovation, collaborations and strategic partnership, corporate expansions, and mergers and acquisitions.

• For instance, in July 2024, Ecostarch, an India-based MSME, established a facility in Mokokchung to produce bioplastic bags from cassava plants. Engaging farmers within a 30-40 km radius, the initiative promotes cassava farming, creating employment and boosting the local economy. The establishment of this facility is driving the market, with a monthly capacity of three tons and supported by farmer training & resource facilitation.

List of Key Companies in Biodegradable Plastics Market:

• NatureWorks LLC
• BASF
• Mitsubishi Chemical Group Corporation.
• Biome Bioplastics
• Plantic
• FKuR
• Danimer Scientific
• TORAY INDUSTRIES, INC.
• Novamont S.p.A
• Cargill
• Eastman Chemical Company
• Trinseo
• LyondellBasell Industries

Recent Developments

• In August 2024, Nagase & Co., Ltd. partnered with TotalEnergies Corbion (TEC) to distribute Luminy PLA bioplastics in Japan. This collaboration aligns with Japan’s commitment to achieving carbon neutrality by 2050, supporting the adoption of low-emission technologies and sustainable materials to minimize waste and reduce GHG emissions in one of the world's largest economies.
• In April 2023, NatureWorks launched its new Ingeo biopolymer 6500D, an innovative material designed for use in flexible film applications. This biopolymer offers a sustainable alternative to petrochemical-based materials, derived from renewable plant-based sources. It is aimed at addressing the growing demand for eco-friendly packaging solutions and provides enhanced performance for applications such as food & beverage packaging. This development aligns with NatureWorks' commitment to advancing sustainable, renewable materials in the plastics industry.
• In April 2023, BASF announced the launch of a new product line, ecovio FS, a compostable bioplastic designed specifically for food packaging. This innovative material is made from renewable raw materials and offers an environmentally friendly alternative to conventional plastic packaging. BASF aims to support the transition to more sustainable packaging solutions with ecovio FS, which is certified for industrial composting and meets the growing demand for biodegradable materials in the food industry.