Bioplastic Capacity Soars While Demand is Less Clear

Capacity to produce bioplastics continues to grow at a brisk rate. It's not so clear, however, if demand is keeping pace.

Global bioplastic production capacity will reach one million metric tons this year, and will more than double from 2010 to 2015, according to a study presented by the European Bioplastics association at the interpack trade fair being held this week in Dusseldorf, Germany.

The report was developed in conjunction with the University of Applied Sciences and Arts of Hanover, Germany.

"The encouraging trend in production capacity allows us to assume, that the figures presented today will even be exceeded in the coming years," says Hasso von Pogrell, managing director of European Bioplastics.

A big shift is taking place in market orientation.

In 2010, the bioplastics industry focused on biodegradable materials, totaling around 400,000 metric tons compared to 300,000 tons of biobased commodity plastics.

This ratio will be reversed in the coming years.

The market study shows that biobased commodity plastics, with a total of around one million tons, will make up the majority of production capacity in 2015.

"Biodegradable materials will, however, also grow substantially and will reach about 700,000 tons by then," says Professor Hans-Josef Endres of the University of Applied Sciences and Arts of Hanover.

It's interesting that the trade group's study focuses on "capacity" and not "demand".

There are signs that American producers are disappointed in the slow sales uptick for plastics made from renewable resources, such as corn.

Metabolix and Archer Daniels Midland opened a 50,000 tons per year plant in Iowa last year to produce bioplastics. It's not clear how long it may take to fill out that capacity, but Metabolix management recently told investors that the scheduled transition to commercial stage for its Mirel polymers is being pushed back a few months. The reasons are partially technical.

"In general, we are seeing smaller innovative customers move faster than the larger customer, which leads to a somewhat smaller initial order size in what we expect to see in the long-term," says Metabolix CEO Richard Eno.

Some of the strongest demand is coming from Europe, where countries such as Italy have banned bags that don't biodegrade.

Cereplast, another bioplastics' startup, had two customers last year that represented 63 percent of its sales. Seventy-seven percent of its sales last year were to customers outside the United States.

A recent survey conducted by Design News shows that engineers have significant interest in plastics made from renewable resources but only if significant issues can be overcome. These include high costs and performance issues.