The global biodegradable packaging market is estimated to account for USD 228.1 billion in 2024. It is anticipated to grow at a CAGR of 6.8% during the assessment period and reach a value of USD 440.7 billion by 2034.
| Attributes | Description |
|---|---|
| Estimated Global Biodegradable Packaging Market Size (2024E) | USD 228.1 billion |
| Projected Global Biodegradable Packaging Market Value (2034F) | USD 440.7 billion |
| Value-based CAGR (2024 to 2034) | 6.8% |
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Circular Economy Integration: The New Normal in the Packaging Industry
Organizations across sectors are making numerous changes in their operations to be on the right side of the sustainability trend. In times like these, several new modules, aimed at reducing the overall carbon footprint have come to the fore. For instance, there is a huge shift observed in packaging-as-a-service brands toward reusable or refillable packaging systems. These companies provide incentives to users for sending back biodegradable or durable packaging for reuse.
For instance, Loop by TerraCycle has partnered with several big names in the food and beverage industry to make their packaging more carbon-neutral. Further, products from Nestle will now be using packaging solutions that are designed for multiple reuses before ultimately being recycled. This will, eventually, elevate consumer experience and attract eco-conscious consumers to the market.
Bio-based polymers are now being comprehensively used in these systems. Packaging materials made from polymers like PLA and PHA will make it very easy for manufacturers to minimize environmental impact. In the long term, the adoption of these materials is very likely to become normal, especially in industries where the demand for sustainable practices is increasing.
Smart packaging sensors in these systems are also a noteworthy addition. Embedded sensors in them help consumers and businesses get accurate information about packaging lifecycle stages. In such a vast marketplace, this will ensure proper disposal or return. These advanced sensors alert businesses when they are ready for composting. This technological integration will ensure materials are processed correctly.
Regulatory Pressure Boosting Adoption
Governments in several countries are now actively promoting sustainable packaging solutions. For this, regulatory scrutiny on packaging materials is being made very stern. Ban on single-use plastic, sustainable alternatives, and incentives have made businesses invest in these modules. The regulatory landscape, however complex, is evolving continuously for biodegradable packaging.
For instance, in the European Union, the Packaging and Packaging Waste Directive has set the recovery and recycling targets for packaging materials. However, in November 2022, this was changed to clarify labels like biobased, biodegradable, and compostable.
In the United States, too, several states have enacted their own regulations. For example, California’s SB 343 restricts the use of misleading recycling symbols on packaging. This means that only materials meeting specific recyclability criteria are labelled as such.
Such initiatives and policies by the government have reduced plastic waste and encouraged the adoption of sustainable practices.
Growing Concerns Associated with Plastic to Spur Significant Innovations
Well-established companies in the packaging industry significantly in making a shift toward plastic alternatives. This is why, the marketplace, as of now, is filled with numerous new materials, such as plant-based polymers, mycelium packaging, and recycled paper products, which are:
Here are some of the recently introduced bio-based materials in the industry and their benefits
| Bio-based Material | Benefits |
|---|---|
| Polylactic Acid (PLA) | Derived from renewable resources like corn starch, PLA is extremely biodegradable and used in a multitude of industries. |
| Polyhydroxyalkanoates (PHA) | Produced by microbial fermentation of sugars or lipids, this material, too, is fully biodegradable, making them suitable for packaging films and containers. |
| Seaweed-Based Packaging | Seaweed has been preferred more by businesses due to its rapid growth and minimal resource requirements |
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Poor Infrastructure
Several biodegradable materials often require industrial composting facilities to break down effectively. This is because it is in these facilities that controlled conditions, such as temperature, moisture, and microbial activity, are available. Such infrastructure may not be available in all regions, especially in underdeveloped parts of the world. This can result in biodegradable packaging ending up in landfills, negating the whole point of such packaging modules.
Mislabelling
The biodegradable packaging market consists of many terminologies that might confuse the layman. Labels like biodegradable, compostable, and biobased, are often used interchangeably in the market. Improper disposal or recycling activities due to this can negate their environmental benefits.
Also, numerous brands have been using vague or misleading claims about biodegradability to market products. This has created a sense of mistrust among the general populace when it comes to biodegradable packaging.
Energy and Resource Use
The production of some biodegradable materials often requires more energy, and thus, more financial resources. These prices may not be affordable to small and medium-sized businesses. These materials also involves significant energy use and natural resources like corn or sugarcane. This creates land-use conflicts and, thus, increased carbon footprints.
Businesses in the market have come up with various new solutions to lower their carbon footprint, especially when it comes to packaging. Corrugated boxes, folding cartons, bottles and jars, cans, trays, clamshells, and cutlery are some of the most prominent packaging types. Among these, corrugated boxes dominate the market due to:
A multitude of materials are used in curating packaging solutions such as PBAT, PBS, PLA, PHA, and starch blends. Among these, it has been observed that packaging companies prefer PBAT as they can be easily blended with other biodegradable polymers. This enhances the overall properties of the material and expands its functionality.
Biodegradable packaging usually consists of two main segments: rigid and flexible packaging solutions. Here, the former brings the most revenue to the market. This can be attributed to high demand across various industries, durability and protection, and branding opportunities.
Biodegradable packaging finds its applications in a wide spectrum of industries such as food, beverage, and cosmetics. The food sector accounts for the largest share as sustainability continues to be a priority for consumers and businesses.
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The following section talks about the region-wise analysis of the biodegradable packaging market with a focus on prominent countries.
| Countries | CAGR (%) |
|---|---|
| India | 9.1% |
| China | 7.8% |
| United Kingdom | 6.2% |
The Indian government in 2021 by making amendments to the Plastic Waste Management Rules, 2016, imposed a strict ban on identified single-use plastic items. This was done to mitigate plastic waste in the country. India ranked third globally, contributing 5.5 billion tonnes of single-use plastic (SUP) waste.
Following this ban, companies in the packaging industry had to quickly make a move toward biodegradable polymers, which helped the industry, which was in the nascent stages, expand exponentially.
Several companies are involved in the biodegradable packaging market in India, where UFlex and Ecoplast Ltd., are considered leaders.
China, as a country, has always been facing the problem of debris management owing to its large population and enormous manufacturing sector. To manage this, the government, through its various grants and subsidies, is actively promoting circular economy initiatives, of which biodegradable packaging is an essential component. The Chinese government also provides funding for R&D in biodegradable materials to encourage innovation and technological advancements in the industry.
The United Kingdom, as of now, enforces a Plastic Packaging Tax on packaging with less than 30% recycled content. With this move, the government is urging businesses in the manufacturing sector to innovate their packaging designs to minimize waste and facilitate recycling.
This has changed the whole dynamics of the biodegradable packaging market in the country. The government also promotes Extended Producer Responsibility (EPR) schemes to encourage sustainable packaging. DS Smith and Mondi Group are key players in the biodegradable packaging market in the United Kingdom.
Currently, South Korea's e-commerce market is the fourth largest in the Asia-Pacific region, behind China, Japan, and India. Post-pandemic, South Korea saw a double-digit growth in its e-commerce sector. This expansion automatically generated an excellent demand for biodegradable packaging solutions as consumers and businesses these days are looking for ways to lower their carbon footprint.
Besides this, industry-academia collaboration has also paved the way for a plethora of innovations in the industry. The market in Korea is filled with multinational brands but a few of them such as Unilever, Nestlé, and Coca-Cola stand out.
To stand out in the market, several companies are investing heavily in bioplastics derived from renewable resources. Corn starch, seaweed, mushrooms, etc., are some of the most prominent raw materials gaining popularity. For instance, Sway is creating packaging materials from seaweed, which are designed to be home-compostable. By doing so, they are offering a sustainable substitute for conventional plastics.
They are also making sure that the packaging itself uses fewer plastic components. For example, a plethora of companies in the food and beverage industries have replaced plastic rings on beverage cans with biodegradable materials. Some of them have also introduced paper straws instead of plastic ones to mitigate waste.
The industry also witnesses frequent taking over of tier-two companies by the well-established ones. For example, In November 2024, Amcor announced a USD 8.4 billion all-stock deal to acquire Berry Global Group. This merger aims to create a leading entity in consumer and healthcare packaging, with combined annual revenues projected at USD 24 billion. The transaction is expected to be finalized by mid-2025.
The global market is segmented by material into several key categories, including PBAT (Polybutylene Adipate Terephthalate), PBS (Polybutylene Succinate), PLA (Polylactic Acid), PHA (Polyhydroxyalkanoates), and starch blends.
The market is also analyzed based on packaging format, which includes rigid packaging and flexible packaging.
Further segmentation is done by packaging type, encompassing a variety of options such as corrugated boxes, folding cartons, bottles and jars, cans, trays, clamshells, and cutlery.
The market segmentation extends to end use, which includes categories such as food, beverages, and cosmetics.
The market can be segmented by region, encompassing North America, Europe, Asia Pacific, Middle East and Africa, and Latin America.
The market’s value for 2019 was estimated to be USD 180.5 billion.
The market is predicted to reach a size of USD 440.7 billion by 2034.
The market is anticipated to be valued at USD 228.1 billion in 2024.
The market is predicted to witness a CAGR of 6.8% during the forecast period.
India is set to be a promising country, with a CAGR of 9.1% over the next ten years.
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Biodegradable Packaging Market
