Global Market for Biodegradable Polymers

July 1, 2006

New biodegradable polymers are entering the market, accompanied by a continuing withdrawal of other products, along with key companies entering and leaving this market. Although this niche market has been commercial for well over 20 years, it is beset with a variety of roadblocks: high prices; lack of an industrial infrastructure; and a strong legislative mandate, just to name a few.

According to a soon-to-be-released and updated technical market research report, RP-175R Biodegradable Polymers from Business Communications Co., Inc. (BCC Inc.), the global market for biodegradable polymers is currently estimated at 114 million pounds. There have been technology advances, lower pricing, new products and markets for biodegradable polymers. Average annual growth rates are still far in excess of the GDP, with forecasts for the market well over 200 million pounds by the end of the decade.

This BCC market research report includes polymers that producers market as "fully biodegradable". Most define a fully biodegradable polymer as a polymer that is completely converted by microorganisms to carbon dioxide, water and humus. In the case of anaerobic biodegradation, carbon dioxide, methane and humus are the degradation products.

The North American biodegradable polymer market has not progressed as rapidly as those in Europe and Japan, and the major drivers for the U.S. market are mandated legislation and prospective increases in landfill pricing - none of which is foreseen within the next five years.

In terms of applications, packaging, which includes loose-fill packaging, comprised nearly 47% of the total polymer market in 2005. However, compost packaging will overtake the market, representing nearly 50% of the market by 2010. Other products - medical/hygiene, agricultural and paper coatings - play a smaller but no less important role in the total market size, representing 11% of the total applications in 2005.

For continued growth in North America, systems or infrastructures to collect and process biodegradable polymers must be put in place, consumers must be willing to accept the inconvenience and cost and, economically, biodegradable polymers must be viewed as a realistic and available option for waste disposal by all parties concerned - an admittedly tall order in the short or intermediate term.

There are only a few major players in this global business, led by NatureWorks LLC in North America, and Novamont and BASF in Europe. There are many Japanese companies involved, but they have relatively small production volumes, some of which are pilot plant operations.

Biodegradable polymers will remain a specialty niche market for at least 10 years and possibly indefinitely. Yet, there are sufficient companies willing to "hang in" and invest time and money to develop a profitable business in producing and supplying these materials.

For more information, contact Business Communications Company, Inc., 25 Van Zant Street, Norwalk, CT 06855; phone 203/853.4266; ext. 309; E-mail publisher@bccresearch.com.