Bioplastics struggle to build scale and grow into bigger alternative to petrochemicals

Production of bioplastics is still growing at a much lower rate compared with petrochemicals. However, carbon emission taxation and single-use, fossil-based plastic bans may help change that. Transparent pricing will also be necessary for a bigger expansion.

Biodegradable packaging made from seaweed. Image courtesy of Notpla.

“Currently our costs are higher as we haven't reached scale economies. But we're becoming competitive rapidly thanks to the increasing number of legislation against single-use plastic around the world,” Pierre Paslier, co-founder and co-CEO of bioplastic producer Notpla said by email.

Ashish Chitalia, head of polyolefins at the energy and petrochemicals consultancy and research organization Wood MacKenzie, said bioplastics are important as they help cutting “the carbon dioxide emission and also reducing the plastic waste which is a major environmental challenge.”

Can bioplastics improve sustainability?

“There are certain advantages that you can see. First, it is bio-sourced. We don’t quite use fossil fuels, be it gas or crude oil. You are looking at corn, cassava, most of the things that are grown essentially in the agricultural side of things,” Chitalia said.

A second advantage is that they have a lower carbon footprint compared with petrochemicals. A third is that they are biodegradable, he added.

One biodegradable plastic is PLA (polylactic acid). According to Bioplastics News, it’s a non-toxic polyester produced by fermenting of carbohydrates like corn starch or sugar cane. PLA can be melted, reshaped and mechanically recycled.

PLA is compostable and biodegradable, but it will only decompose within three months under appropriate conditions, otherwise it could take many years.

Bioplastic challenges

“Challenges are in economics, number one. It’s pretty expensive to produce bioplastic relative to petrochemicals,” Chitalia said.

“Another thing is that is it high competition with agricultural resources” for food, he added.

“You are competing for sugar, corn, for sugar cane,” he said.

The rate for growth of bioplastics is small relative to other materials, he added.

“Our forecast for bioplastic is that it is only likely to grow at an average of 3% relative to 3.5%-4% for polyethylene, polypropylene and other plastics,” he added.

And that bioplastic expansion rate is from a very low base. Bioplastics do not represent more than 1% of all the plastics used in the world.

How to increase the role of bioplastics?

“If we could improve integration with bio-refineries and have an increase in logistics that’s really important,” said Chitalia.

“Second is from government policy, policies to get consumers to use more bioplastics” such as starch polymers, he added.

“A carbon tax on something that is leaving a carbon footprint, that can also help bioplastics penetration into the overall plastics market,” he added.

Actions such as the planned Canadian ban on single-use plastics could help bioplastics play a bigger role.

Gaining economies of scale

“Based on research we’ve seen that some of the converters are willing to pay a little bit of premium for bioplastic so if you bring these three together, integration efficiency, carbon tax policies and a little bit of a bioplastic premium it can then with scale compete with PE, PS,” Chitalia said.

“Most of the time what you will find is bioplastic has found good markets in food service applications,” Chitalia said.

"PLA has found a good market in 3D printing for example, as well as packaging, food packaging and non-food packaging,” he added.

“But the scale isn’t quite there and the penetration definitely needs some support,” he said.

Role of taxation and policies

“It's great to see some pioneering taxes and policies. There has been over 100 new policies in the last 12 months alone around the world, so the scene is rapidly changing,” said Notpla’s co-CEO Paslier.

Notpla, based in London, uses seaweed as an alternative to petrochemicals to make packaging.

Its first product, Ooho!, is a biodegradable sachet that can contain liquids, including cocktails or condiments. It degrades in 4-6 weeks without any need for composting.

Paslier said he has seen lobbying efforts that he considers are intended to delay policies that could have results including a faster adoption of biodegradable packaging.

Yet trends appear to clearly favor ecological alternatives, even at higher prices, he said.

“Prices are not a limiting factor for now as companies that are implementing sustainable packaging are growing twice as fast as the ones that are sticking with plastic packaging,” he said.

The “EU and the U.S. coasts (East and West) are the most innovative markets in this new paradigm, but China is pushing a lot of initiatives at a massive scale, so it's truly global,” Paslier added.

Price opacity

Louise Boddy, head of Commercial Strategy, Sustainability at price assessment and consulting organization ICIS, listed biodegradable materials among products yet to be commoditized, so their market suffers from price opacity.

This means that a lack of price references for materials such as biodegradables may make it harder for businesses to make projections and take decisions.

“You can value on the cost plus, that’s one way, but if you are looking for a fair market value it’s a little more complicated at the moment,” she said, speaking during a Reuters Events Leadership Forum in late November.

One way to get market-based pricing for bioplastic packaging materials could be by “looking at what these products deliver to the buyers,” she said.

“So, first of all, on the quality side, what is coming out is virgin quality. So that’s one of the markets where you can triangulate value, against its transparent well known price drivers,” she said.

Similarly, buyers could look at the closest green option for the product.

Companies may also consider “what is the environmental benefit to you and your customers of buying this product over another” such as avoided CO2 or reduced plastic waste, she added.

By Renzo Pipoli