Compostable Plastic Packaging Market Size, Share, Industry, Forecast and outlook (2024-2031)

Global Compostable Plastic Packaging Market is segmented By Type (Bags, Trays, Cups, Plates, Films, Lids, Straws, Cutlery, Bowls, Clamshells, Pouches & Sachets, Others), By Raw Material (PLA, PHA, Cellulose-based Plastics, Starch-based Plastics, Others), By End-User (Food & Beverages, Pharmaceuticals, Personal & Homecare, Others), By Region (North America, Europe, South America, Asia Pacific, Middle East, and Africa) – Share, Size, Outlook, and Opportunity Analysis, 2024-2031

Report Overview

The Global "Compostable Plastic Packaging Market" is predicted to reach at a high CAGR during the forecast period (2024-2031).

The term “compostable" refers to a product that can decompose into non-toxic, natural materials. It also does so at a rate that is comparable to that of other organic compounds. To produce a final compost product, microbes, humidity, and heat are required (CO2, water, inorganic compounds and biomass).

Compostable plastic packaging is defined as plastic that degrades through biological processes in the composting process to produce CO2, water, inorganic compounds, and biomass at a pace comparable to other compostable materials while leaving no visible, identifiable, or hazardous residue. The development of compostable plastic packaging is being driven by growing environmental concerns about plastic usage (since plastics contain hazardous chemicals that affect plants, animals, and people).

Unlike biodegradable plastics, compostable plastics decompose under tight environmental control, including greater temperatures, pressure, and nutrient concentration. Compostable plastics can breakdown in three to six months via aerobic and anaerobic decomposition processes. Anaerobic plastics, on the other hand, require special treatment, such as industrial composting, which is more expensive than regular home composting.

Compostable Plastic Packaging Market Summary

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Market Dynamics

As individuals become more aware of the need of adopting biodegradable items to reduce pollution around the world, the worldwide compostable plastic packaging market is increasing.

Increasing awareness for environmental concerns regarding plastic usage

As consumers become more mindful of biodegradable items and their lifestyles change, the Compostable Plastic Packaging Market is likely to grow. People have become more ecologically concerned, and they are more likely to purchase environmentally friendly products. Compostable plastic are becoming more popular as environmental worries about plastic usage grow (plastics contain hazardous toxins that harm plants, animals, and people). Invasive organisms can use floating plastic debris, which can last hundreds of years in water, as a mode of transit.

NatureWorks, a global leader in compostable plastic packaging, has recently released new coffee capsules made from compostable plastic packaging. In addition to introducing biodegradable plastic packaging material, manufacturers in the compostable plastic packaging material market are working to establish a comprehensive chain that leads to proper waste disposal.

Rules enacted by various governments and federal agencies with the goal of reducing plastic waste and encouraging the use of biodegradable plastics to boost compostable packaging

The packaging business around the world is poised to experience a major upheaval. Green packaging standards are becoming more stringent. As a result, many FMCG companies are being forced to employ biodegradable packaging in order to meet the criteria, which is fueling the market's expansion.

To lessen reliance on traditional plastics, industry trends are changing toward biobased goods. As an alternative to conventional, oil-derived plastics, compostable bags such as polylactic acid (PLA) and starch bags are frequently utilised. The BS N13432 standard is used to certify bio bags derived from natural resources.

Compostables decompose quickly, unlike fossil fuel-based plastics, which can take up to 500 years to totally degrade. Furthermore, due to government laws, most firms in industries such as packaging, textiles, and agriculture are switching to compostable plastic. Such considerations have a significant impact on the growth of the compostable plastic industry.

High costs of compostable plastics, is likely to hinder the market growth

The market's growth is hampered by the high cost of biodegradable plastic compared to its traditional competitors. Polylactic acid-based bioplastics, for example, are at least eight times more expensive than petroleum-based plastics. Compostable plastic bags are also not as sturdy as traditional plastic bags and are only watertight for a short time.

Biodegradable plastic is created from plant starch and requires precise conditions for decomposition, such as temperature, bacteria, humidity, and so on, which increases the cost of compostable plastics.

COVID-19 Impact Analysis

COVID-19 has had a significant impact on a variety of businesses around the world, particularly the packaging business. Packaging businesses were developing new technologies that were environmentally benign, reusable, and biodegradable. Concerns about the hygiene and safety of reused packaging, however, put a temporary halt to the packaging industry's development toward a circular and sustainable supply chain.

Consumer preferences, e-commerce, new or increased hygiene and consumer-safety concerns, redefined sustainability, and increased sustainability are some of the important sectors in the packaging industry that have been influenced.

Market Segmentation Analysis

By End-User, the compostable plastic packaging market is classified into food & beverages, pharmaceuticals, personal & homecare and others.

Food & Beverages segment is expected to be the dominant type during the forecast period (2021-2028)  

With growing government food packaging restrictions resulting in more usage of degradable or biodegradable packaging for the industry, the segment has a larger proportion of the biodegradable packaging market. The widespread usage of compostable packaging in the food and beverage industry compared to other industries, as well as high consumption, is driving the segment’s growth. Rising health consciousness is another factor driving growth.

Brands are inventing creative ways to package their goods that not only maintain freshness, convenience, and food safety but also decrease their environmental effect, ranging from recyclable to compostable choices. Government laws and rising consumer awareness of environmental issues have resulted in the use of healthier, safer, and more convenient eco-friendly materials, driving up demand for compostable packaging in food and beverages industry.

Geographical Share

Europe region holds the largest market share global compostable plastic packaging market

Europe has emerged as the leading market for compostable plastic packaging. Due to increased concern from government and European legislative framework, and policies that are likely to encourage the widespread usage of biodegradable plastic goods and give growth prospects for the market, Europe accounted for the biggest revenue share in the compostable plastic market.

The expansion of the market in Europe is being driven by the transition to a low-carbon and circular economy, improved legislative support for the bioeconomy, and increased consumer awareness of sustainable products and packaging. The European Union's decision to cut total consumption of thin plastic bags in the region by around 80% by 2019 compared to 2010 levels is projected to provide substantial growth prospects for biodegradable plastics manufacturers in the next five years.

Traditional end-user industries, including as packaging, agriculture, and textiles, are seeing a major increase in demand for compostable plastics. Compostable plastics are also becoming more popular in other specialty markets, such as medical implants and drug delivery systems, which is propelling the total market forward.

Market Key Players and Competitive Landscape

The Compostable Plastic Packaging Market is extremely fragmented, as global companies focus on developing new methods to produce plastic packaging from a variety of readily available natural resources.  Some of the key players which are contributing to the growth of the market include Kruger Inc., Clearwater Paper Corporation, Mondi Group, Amcor, Rocktenn, Novamont S.P.A., Smurfit Kappa Group, Reynolds Group Holding Limited, Stora Enso and BASF SE, among others. The major players are adopting several growth strategies such as product launches, acquisitions, and collaborations, which are contributing to the growth of the compostable plastic packaging globally.   

Kruger Inc.:

Overview: Founded in 1904, Kruger Inc., based in Montréal, Canada, manufactures 100% recycled containerboard, corrugated packaging, tissue products, publication and specialty papers, renewable energy, cellulosic biomaterials, and wines & spirits.

The corporation is also a major recycler of paper and paperboard in North America. Kruger has 19 locations in Canada and the United States, including operations in Maine, New York, North Carolina, Rhode Island, Tennessee, and Virginia.

Product Portfolio: The Company’s portfolio is comprised of traditional industry sectors like pulp and paper, containerboard and packaging.

Key Developments:  Kruger Inc., announced in May 2021 that it would invest $114 million in a new Elizabethtown facility. The new 400,000-square-foot facility will be the first of its kind in the city. T.J.'s facility will be located there. Kruger Packaging (USA) LLC will be based at Patterson Industrial Park in Elizabethtown, and it will be the company's first corrugated box plant in the United States.

The global compostable plastic packaging market report would provide an access to an approx. 62 market data tables, 64 figures and 180 pages.