Bio-Plastics Are Getting a Toehold in the Packaging Market

Credit: Novamont

Some manufacturers are seeking ways to introduce plant-based plastics -- bioplastics -- into their products. Such bio-materials offer a way to reduce life-cycle environmental impacts and greenhouse gas (GHG) emissions -- and to hedge against cost volatility in the supply of petroleum feedstock. Packaging is emerging as one of the most promising markets for bioplastics, especially in the manufacture of plastic containers.

According to market research firm IBISWorld, the global plastics manufacturing market is worth $779.8 billion in 2012 and is expected to grow to $941.4 billion in 2017. Approximately 28.7 percent of industry revenue is accounted for in North America, 28.5 percent in Europe and 25.5 percent in Asia. Asia's share has been growing because of development in China, resulting in declining share for North America and Europe. 

More than 128,000 companies operate in the plastics space. Due to the wide range of plastic products manufactured, even the biggest players account for very small pieces of the pie. Success in this industry depends on economies of scale, cost control, smart contract management, quality control, and effective R&D. Economics in the plastics business are particularly driven by the cost of feedstocks, primarily petroleum-based resins and recycled materials. The business is highly competitive and capital-intensive. Barriers to entry are high, presenting a challenge for the emerging bioplastics segment.

Bio-film food packaging. Credit: Novamont.

IBISWorld says 40.1 percent of plastics industry demand is in packaging. However, because packaging goods are relatively low-cost, large-scale products, plastic containers and packaging products account for only 14 percent of revenues in the plastics industry. Containers and packaging do constitute a growing segment for plastics. In the plastic container industry, the two primary segments are conventional plastic containers, such as those for drinks; and custom containers that are manufactured according to specified characteristics such as heat tolerance or air tightness.

In comparison to the $779.8 billion plastics market, bioplastics make up just a sliver: only $2.3 billion in 2011, according to Transparency Market Research. The bioplastics market is growing faster than the overall market, though. The firm expects bioplastics to reach $7.8 billion in 2018, an annual growth rate of 19.5 percent.

In its current state, the bioplastics segment faces a chicken-or-egg problem: Packaging is a large opportunity for bioplastics manufacturers, but "many customers will not even market-test new packaging products unless the scale exists to meet future needs," according to Lux Research Inc. in its report, "Bridging the Divide between Demands and Bio-Based Materials."

Bioplastics and Packaging Sustainability

Recyclability is an important environmental consideration in the plastics business, and particularly in packaging. However, it's worth noting that many bioplastics are not biodegradable. These products are physically identical to their petroleum-based counterparts and are being developed as drop-in substitutes. For such materials, then, recyclability of the final product is not necessarily increased by their use. Even without the use of plant-based substitutes, plastics already lend themselves to recycling and thus benefit from some preference in the market.

In the market for drop-in substitutes, bioplastics gain most of their "green halo" through their low life-cycle environmental impacts relative to petroleum resins. They tend to be made from feedstocks that are non-toxic and produce low levels of greenhouse gas (GHG) emissions.

Manufacturing Mater-Bi. Credit: Novamont.

Biodegradable bioplastics are being made, one example being Mater-Bi, manufactured by Italian chemistry firm Novamont. The market challenge is that such materials need to be disposed of in a manner that allows them to be composted. Practically speaking, this requires the materials to be disposed of via separation and diversion into the composting waste stream -- a logistical challenge in the short term.

One exception is PLA (polylactic acid), a transparent plastic made from sugar. PLA performs similarly to petroleum-based plastics such as polyethylene (PE) and polypropylene (PP) and is used to make water and juice bottles, clamshell containers, cups, and cutlery. BioCor LLC, a California company, is building a business based on recycling of PLA. The company says that an optical sort machine at a recycling center can separate PLA from other materials that look similar. Lux Research says that BioCor recycled 600,000 pounds of PLA back into lactic acid in 2011.

Replacing Polymers With Plant Materials

The most important conventional polymers used in packaging are low- and high-density polyethylene (LDPE and HDPE, respectively), polyethylene terephthalate (PET), and polyvinyl chloride (PVC), according to Lux. So far, plant-based PVC has not come to market, but bio-PE and bio-PET are starting to make an impact.

Bio-derived polyethylene is physically the same as conventional PE and can be produced from ethanol. Market research firm ICIS, specializing in the chemical industry, says that out of all biopolymers, "bio-based polyethylene is in the most advanced stage of commercialization."

Braskem, a Brazilian company and the market leader in bio-PE, according to ICIS, manufactures a material called Green PE, which it began producing at commercial scale in 2010. Braskem says Green PE, made from sugarcane ethanol, "removes up to 2.5 metric tons of CO2 from the atmosphere for each ton produced," whereas conventional PE production actually emits 3.5 tons. Braskem says Coca-Cola, Danone, Johnson & Johnson, and Procter & Gamble are using Green PE for containers. Tetra Pak is using Green PE for plastic caps and seals. ICIS says that Braskem's Green PE is fetching "a price premium of around 15 to 20 percent" above fossil-fuel-derived polyethylene due to its low-carbon life cycle. Braskem is producing 200,000 metric tons per year of its bio-PE.

Braskem's bioplastics plant in Brazil. Credit: Braskem.

U.S.-based Dow Chemical and Japanese industrial giant Mitsui are building a joint-venture sugarcane-to-PE plant in Brazil, according to ICIS. Dow plans to use the plant to produce bioresins for its high-performance Dowlex PE product. The plant will be able to produce 350,000 tons of product per year. When the plant was first announced, a Dow representative said the company expects to find "ample market demand and growth potential for biopolymers, particularly within the high-performance flexible packaging, hygiene, and medical markets."

Coke's PlantBottle has been licensed by Heinz. Credit: Coca-Cola.

For its PlantBottle, Coca-Cola is employing a bio-PET formulation that is up to 30 percent plant-based. PET is made up of two components, mono-ethylene glycol (MEG) and purified terephthalic acid (PTA). In the PlantBottle, Coke is using MEG produced from Brazilian sugarcane ethanol. PlantBottle is reportedly manufactured by Western Container Corporation in Fife, Wash., the chief maker of PET bottles for Coca-Cola. According to plastics industry writer Jan H. Schut, Coke was reporting by the end of 2011 that it had made about 10 billion PlantBottles in the previous two years. Schut estimates that this required the production of about 150 million pounds of bio-MEG.

Coca-Cola says that "Our packaging innovation teams are working on technology to develop PTA from plants, but it's complicated science and we expect it will be a few more years before we have a commercial breakthrough." Coke reportedly has initiated PTA-development partnerships with Virent of Madison, Wis., Gevo of Englewood, Colo., and Amsterdam-based Avantium.

For the time being, bioplastics are playing a limited role in packaging and in the plastics market overall. However, manufacturers are sure to keep their eye on plant-based materials as a means to increase the sustainability of the value chain. Meantime, bioplastics manufacturers would do well to seek out applications at margins where their product can provide "good enough" performance at lower cost, or environmental benefits at equal cost or at a premium. This can provide a wedge into the market while producers expand capacity and improve their products through intensive R&D.

EDITOR'S NOTE: This article is the first in a series on how bioplastics are being used throughout the manufacturing industry. You can read the rest of the series here:

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