Biodegradable Paper and Plastic Packaging Market Size [2031]

Report Description

Biodegradable Paper and Plastic Packaging Market Outlook 2031

The global biodegradable paper and plastic packaging market size was USD 11.1 Bn in 2022 and is likely to reach USD 24.92 Bn by 2031, expanding at a CAGR of 9.4% during 2023–2031. The market growth is attributed to the growing innovation in packaging technology.

The rapid expansion of the food industry across the globe is anticipated to boost the demand for biodegradable paper and plastic packaging. Increasing awareness about the harmful effects of non-biodegradable plastics leads to a rising demand for sustainable packaging solutions.

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The widespread adoption of biodegradable plastic and paper for packaging across various industries is mainly attributed to their diverse range of characteristics, including biodegradability, recyclability, versatility, easy accessibility, and lightweight nature. Biodegradable plastic and paper are broken down into simpler substances by natural processes, such as microbial action, sunlight, and moisture, that are compatible with the ecosystem.

The market report finds that the COVID-19 pandemic hampered the biodegradable plastic and paper packaging market. In the early stages of the pandemic, the demand for single-use plastic products, such as disposable masks, gloves, and packaging for takeout food and groceries, has increased, due to hygiene and safety concerns. This led to a temporary hindrance of biodegradable plastic and paper alternatives.

Consumer awareness regarding the impact of single-use plastics on the environment has increased in the post-pandemic phase. Thus, many individuals started looking for eco-friendly alternatives. This shift in consumer preference is expected to drive the demand for biodegradable plastic and paper products.

Impact of Artificial Intelligence (AI) on Biodegradable Paper and Plastic Packaging Market

Artificial Intelligence (AI) is expected to boost the revenue of the key players competing in the biodegradable paper and plastic packaging market. AI-driven quality control systems monitor and inspect packaging materials for defects, ensuring that they meet industry standards.

This technology enhances supply chain management by optimizing logistics and inventory management. This leads to efficient processes, reduced waste, and decreased costs which benefit the adoption of biodegradable packaging materials.

Biodegradable Paper and Plastic Packaging Market Dynamics

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Major Drivers

Rising awareness about the drawbacks of single-use plastics and a shift in consumer preference towards sustainable packaging drives the market. Consumers are aware of environmental issues and the impact of single-use plastic packaging on the environment. Thus, they are highly looking for sustainable solutions to reduce plastic waste. However, biodegradable packaging materials break down naturally and have a low environmental impact, thereby boosting the market.

Shifting consumer preference towards eco-friendly products encourages manufacturers and several brands to use biodegradable packaging solutions. Many countries and regions are implementing stringent regulations, including the ban on plastic products, to reduce the use of single-use plastics and encourage consumers to adopt sustainable packaging solutions. This, in turn, boosts the market.

Rising government initiatives to educate the public about biodegradable packaging propels the market. Government initiatives serve as a powerful tool to spread awareness regarding the benefits of biodegradable packaging by highlighting the environmental benefits of using materials that naturally break down. Governments often allocate resources for research and development of sustainable packaging. This leads to innovations in biodegradable materials, making them accessible to businesses and reducing plastic waste. For instance,

• In January 2022, The US Department of Energy (DOE) invested USD 13.4 million in next-generation plastic technologies that reduce plastic waste and energy consumption. These technologies convert plastic films into valuable materials and design new plastics that are recyclable and biodegradable.

Existing Restraints

High cost of sustainable packaging materials hampers the market. Sustainable materials, such as biodegradable plastics and specialty papers, often require advanced production processes, which are more expensive compared to conventional packaging materials. This, in turn, increases production costs and significantly the cost of finished goods.

Emerging Opportunities

Growing technological advancements create lucrative opportunities in the market. Technological advancements enable the development of new and improved biodegradable materials. These materials hold enhanced properties, such as increased strength, durability, and flexibility, which makes them suitable for a wide range of industries and applications. Additionally, technological advancements in the waste management and recycling process contribute to a sustainable waste management system.

Scope of the Biodegradable Paper and Plastic Packaging Market Report

The market report includes an assessment of the market trends, segments, and regional markets. Overview and dynamics have also been included in the report.

Biodegradable Paper and Plastic Packaging Market Segment Insights

Material Type Segment Analysis

Based on material type, the biodegradable paper and plastic packaging market is divided into polylactic acid (PLA), polyhydroxyalkanoates (PHA), cellulose-based plastics, and starch-based plastic. The polylactic acid (PLA) segment is expected to hold a major share of the market during the projection period, as it is derived from renewable sources, such as cornstarch and sugarcane.

PLA is a versatile material that is molded into various forms including films, sheets, and containers. This adaptability makes it suitable for a wide range of packaging applications across different industries. Furthermore, rising investments to develop PLA materials to meet the overall growing demand is expected to boost the segment. For instance,

• In August 2021, NatureWorks LLC invested approximately USD 600 million to construct a PLA facility in Thailand, aimed at fulfilling the escalating demand for sustainable packaging materials in the country. The plant is projected to have an annual capacity of 75,000 tons of Ingeo biopolymer and produce the full portfolio of Ingeo PLA grades.

The cellulose-based plastics segment is expected to expand at a significant growth rate in the coming years, due to its high quality and it provides wide range of applications. Cellulose is the major abundant organic compound on Earth. It is found in plant cell walls and is readily available from sources, including wood pulp, cotton, and agricultural residues.

This abundance ensures a consistent and affordable supply of raw materials. Cellulose-based plastics are used in various packaging formats, including films, sheets, and containers. They are versatile and adapted to different industries and products, which makes them suitable for a diverse range of packaging needs.

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Packaging Segment Analysis

On the basis of packaging, the global market is segregated into boxboards/paperboard cartons, paper bags, flexible bags, bubble wraps, and corrugated boxes. The corrugated boxes segment is projected to register a considerable CAGR during the forecast period, as it provides sturdiness. Corrugated boxes are known for their strength and durability, which makes them a preferred choice for packaging a wide range of products.

Furthermore, the rising use of corrugated boxes in customized packaging is likely to drive the segment. These boxes provide excellent surfaces for printing, making them preferable for marketing products and improving brand identity.

End-user Segment Analysis

On the basis of end-user, the biodegradable paper and plastic packaging market is segmented into catering service wares, food & beverage, healthcare, personal & home care, and others. The food & beverages segment is anticipated to register a robust growth rate during the forecast period, due to rising focus on brand image and growing demand for sustainable packaging.

Food and beverage companies are focusing on green packaging to reduce their carbon footprint. Using biodegradable packaging allows them to attract eco-conscious consumers and enhance their brand reach. Food processing companies heavily prefer paper-based packaging, including paperboard containers, to pack dry products. Furthermore, the rising demand for ready-to-eat and packaged food, the expansion of online food delivery services, and rising innovation in packaging solutions are expected to boost the market. For instance,

• In June 2022, Corona, the renowned global beer brand, unveiled its innovative 100% biodegradable and compostable six-pack packaging in India. This advanced packaging is crafted from renewable sources, primarily barley straw.

The personal and home care segment is expected to expand at a significant growth rate in the coming years, due to rising demand for transparency and increasing focus on brand differentiation. Manufacturers of personal care & home care are highly using biodegradable packaging as a way to distinguish their products and align with the value of sustainability.

Consumers are demanding more transparency in product labeling and ingredients. Biodegradable packaging often communicates a clear message about the company's commitment to sustainability and responsible sourcing, which appeals to environmentally conscious consumers.

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Regional Outlook

In terms of region, the global biodegradable paper and plastic packaging market is classified as Asia Pacific, North America, Latin America, Europe, and Middle East & Africa. Asia Pacific is expected to dominate the market during the projection period, due to rapidly growing urbanization and increasing environmental awareness among individuals.

Asia Pacific is a rapidly growing region in terms of both population and economic development. This, in turn, increases consumption of a wide range of consumer goods, which significantly boosts the demand for biodegradable packaging. Rising environmental awareness among individuals and concerns about plastic pollution in the region has shifted their focus toward sustainable practices. Thus, consumers and businesses are becoming conscious of their ecological footprint, which increases the demand for eco-friendly packaging solutions. For instance,

The market in North America is projected to grow rapidly during the forecast period, owing to the rising demand for biodegradable packaging and rising technological advancements in packaging. Consumers in North America are actively seeking products and packaging solutions that align with sustainability values.

The region is known as a hub for technological innovation and R&D. North America is highly investing in the development of advanced biodegradable materials and packaging technologies. This leads to the creation of high-quality, cost-effective, and innovative biodegradable packaging solutions.

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