Biodegradable Polymers Market in Europe Technology and Product Landscape Biodegradable Polymers Market 2017

Overview for Polylactic Acid (PLA) PLASTICS Conventional Plastic (petro-based) (oxo degradable) Bio-Based Bio-Degradable Bio-Based Non-Biodegradable Made from petrochemicals with biodegradable additives Made from Renewable Materials Polylactic Acid (PLA) Manufacturing Technology Biomass Renewable Sources Ring Opening Polymerization Poly Condensation of Lactic Acid Blending Biodegradable Polymers First Gen Sugar cane, Corn Sugar beet, Cassava Second Gen Bagasse, Corn Stover, Wheat Straw, Wood Chips Third Gen Succinic Acid, Algae, Lignin Market under focus

Value Chain and Major Stakeholders: Overview Bio-based plastics and polymers are derived from agricultural produce where sugar remains the major raw material; the end products are completely biodegradable and can also be further recycled. The feed stock goes to the chemical/biotechnology industry for further processing of sugar in to bioplastics and biopolymers Retail stores remain the direct point of sales of products to end-users and after the consumer uses the products it is then processed for direct decomposition Bioplastics and Biopolymers are obtained from biological sources, mostly agricultural produce, such as sugar, wood or bio-waste Bio-plastic granules are converted into end-user products such as bottles, packaging materials, and other consumer products Sugar/starch refineries remain the major feedstocks for bioplastics and biopolymers, as bioplastics are made by converting the sugar present in plants into plastic OEMs use these end-user products as packaging or component for their final products. For instance, bioplastic bottles are used to package aerated drinks The sugar is chemically processed to form plastic granules by plastic manufacturers 2 1 7 3 OEM 6 4 5

Overview of Technology for Polylactic Acid Raw Materials Dominance of first generation bio mass such as sugarcane and corn starch Ongoing development of second generation biomass such as bagasse and wheat straw Experimentations with third gen sources such as lignin and algae PLA Manufacturing Processes Ring Polymerization technology using metal catalyst Less energy consuming Better heat resistance Polymerization by direct poly- condensation of lactic acid Less raw material wastage Improved yield Polylactic acid modification by blending with biodegradable polymers Improved flexibility, sturdiness and heat resistance Enhanced composability PLA Processing and Applications Suitable for all the major plastic production methods such as injection moulding, blow moulding, thermoforming and extrusion Many PLA variants can be processed on conventional plastic processing machinery Most used in packaging and 3D printing Emerging applications in automobile and construction by blending PLA with other polymers Other Technological Aspects Increased focus on improving the feedstock efficiency (ratio of feedstock weight to the final plastic polymer weight) further from the already high efficiency of 1KG polymer to 1.6KG feedstock Negative perception around usage of GMO crops as feedstock in packaging plastic, especially in food packaging

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Biodegradable Polymers Market – Trends Common to Focus Countries European companies have started recognizing the importance of standardization, labels, and certification in driving the development of the biodegradability of packaging. Labelling in the bio-plastics industry is crucial to enable consumers to differentiate between bio-plastic products and conventional plastics Robust and unambiguous standards are expected to foster collaboration, innovation and competition in the bio-plastics industry, in addition to easing consumers’ lives and increasing awareness Robust labelling standards for bio-plastics in Europe Additives to make conventional plastics biodegradable Research and Development is being undertaken by manufacturers to develop several bio-based polymers and additives, that make conventional plastics biodegradable These additives are blended with conventional polymers such as PET, making them biodegradable Development of alternative sources of biomass Few manufacturers are looking at developing alternative sources of biomass such as algae to improve the cost effectiveness of bioplastics Increasing use of PLA in medical applications PLA’s are often used in the manufacture of plastic films, bottles, and biodegradable medical devices such as screws, pins, rods, and plates It is often used for medical implants that biodegrade within the body. The biodegradability of PLA allows these implants to biodegrade within 6-12 months, which makes PLA suitable for these applications

Biodegradable Polymers Market – Drivers Common to Focus Countries Conducive policy framework and awareness reforms undertaken by regulatory bodies and private organizations across Europe are expected to have a positive effect on the market for biodegradable polymers Examples include the ban on conventional plastic bags that give out an exception to biodegradable bags, and a bioeconomy vision that envisions a bio-based economy for the whole of Europe Conducive policy frameworks Widening spectrum of applications Several variants of bioplastics are now providing mechanical properties similar to conventional plastics, widening the end user segments from beyond packaging to the construction industry, and industries with high heat requirements Examples include BioPBS from MCCP, Biograde from FKuR, and BIOPLAST 900 from BIOTEC amongst others Drop-in solutions for processing bioplastics Several variants of drop-in solutions of bioplastics exist, wherein bioplastics can be processed on standard plastic processing equipment and no new processing machinery is required. This provides for easy switching to bioplastic processing for existing conventional plastic processing firms Bio-Flex from FKuR in Germany is one such example of a drop-in solution Increased use of PLA in 3D printing PLA and ABS (Acrylonitrile Butadiene Styrene) are the major polymers used as 3D printer filaments PLA melts at a much lower point compared to ABS, which greatly reduces the energy consumption. PLA is also preferred due to it being odourless Hence, with the growth in demand for 3D printers in Europe, there has been an increasing use of PLA as 3D printing filaments due to their superior capabilities

Biodegradable Polymers Market – Challenges Common to Focus Countries Biodegradable raw material is at least 3 times costlier than conventional plastics. Considering the higher raw material cost and double the volume of raw material needed for production, biodegradable bags end up being 3–6 times more expensive than conventional bags Lowering oil prices have rendered conventional oil based plastic manufacturing cheaper. Brent crude has fallen from over US$100 a barrel to just over US$50 a barrel making the raw materials for oxo degradable plastic cheaper. This is further pressuring the bioplastics, which are already expensive to produce, and do not yet enjoy economies of scale Expensive compared to alternatives Biodegradable bags need to be up to twice as thick as conventional bags to offer the same performance and durability. For example, the minimum required thickness for a biodegradable produce bag is 16 microns. Conventional produce bags generally need to be only 7 microns thick Less durable than conventional bags Questionable biodegradability Biodegradable bags do not degrade under ocean marine conditions. Biodegradable plastic are too dense to float on the surface of water and sink to the bottom of the ocean where conditions are not conducive to degradation Biodegradable plastics not seen as a solution to littering The policy frameworks are focused on recycling and reducing landfills, by reduction in all kinds of plastic usage, thus reducing the littering. The use and disposal of bioplastics is not seen as a potential solution to the problem of littering and are more often seen as slightly cleaner alternatives to conventional plastics The biodegradable bag’s ‘biodegradability’ perception encourages littering. Consumers are less concerned with the disposal of biodegradable bags into the surrounding environment Shifting of manufacturing to the USA New manufacturing of bioplastics are slowly shifting to the USA due to favorable procurement policies and relatively higher preference given to bio-based materials