Report: Bioplastics Promise a Solution to Environmental Challenges, but Obstacles Remain
Image via Michael Dziedzic, Unsplash
Plastic is one of society's most versatile inventions: strong enough to build vehicles, safe enough to eat off of, flexible enough to wear, and durable enough to last hundreds of years. But as the world uses more and more plastic, it has become a threat to the environment and human health. A new report from Boulder-based venture capital and research firm Saoradh Enterprise Partners (SEP) explores bioplastics as one potential solution and identifies the most investable companies in the space.
Traditional plastic is environmentally damaging throughout its lifecycle. Extracting fossil fuels, manufacturing, and disposal contribute to a carbon footprint of 232 million tons in the US alone. A 2021 report found that the US plastics industry is on track to emit more than the coal industry by 2030. Plastic is filling landfills and clogging waterways and oceans, incrementally breaking down into microplastics that are ingested or inhaled by fish, animals, and humans.
Technology
Bioplastics – defined as "partially or fully biobased and/or biodegradable" – are an environmentally safer, renewable alternative to fossil-based plastics. "Biobased" and "biodegradable" are distinct characteristics; a biobased plastic is not necessarily biodegradable and vice versa.
SEP found that most companies produce bioplastics using waste, cellulose, and starch (in that order). Bioplastics can also utilize protein or glucose, and companies are working on methods to create bioplastics from captured CO2.
Market Drivers
The bioplastics market is young, but the industry anticipates a remarkable 20-30% annual growth rate. Other estimates place the market value at $7 billion in 2020 and predict growth to $15 billion by 2028. Increased policy support, customer acceptance, and oil price volatility contribute to this growth. Other market drivers include innovation in biodegradable product recycling and radiocarbon analysis (which regulators use to determine biobased vs. fossil-based content).
Market Limitations
Bioplastics must meet a long list of qualifications to replace petroleum-based plastic: they must be durable, flexible, lightweight, nontoxic, waterproof, odorless, tasteless, and able to withstand all the same strength tests as traditional plastic. Replicating the properties of traditional plastic is expensive – SEP found that bioplastics can cost 20% to 100% more than conventional plastic. Because of this cost barrier, bioplastics produced today may contain as little as 5% biobased content.
“Bioplastics are well-suited for some applications, but decarbonizing the plastics industry will require a host of solutions – primarily focused on end-of-life and recycling. SEP’s report is a comprehensive analysis of the promises and pitfalls of bioplastics and their place in the cleantech puzzle.”
Companies
Although bioplastics face barriers to reaching cost parity with conventional plastic, consumer demand is growing for a sustainable plastic option. Leading companies, including Ford, Goodyear, Rebook, and others, are adopting bioplastics in their supply chains. SEP found over 300 investors active in the bioplastics space.
SEP identified 106 notable cleantech companies operating in the bioplastics supply chain – most are midstream or producing end-devices. Of these, SEP found 22 to be most interesting to investors. The complete database of companies is available upon purchase of the full report.
Purchase the Report
The Bioplastics report is 112 pages and includes:
A global database of notable companies (with a US focus).
One hour of individualized support from the SEP team.
Find more details, including a full table of contents, and purchase the report on the SEP Marketplace.
ABOUT TOPIC REPORTS
Topic reports explore cleantech investment spaces with the aim to calibrate investors, uncover opportunities, and identify possible solutions to Solving Climate+ by 2050. SEP produces topic reports twice per quarter to gather data and insights important to evaluating key cleantech investment spaces as part of our Innovation Flow Reporting (IFR) service. Upcoming reports include Biochar, Bioplastics, Clean Food, Desalination, and Refrigerants.
ABOUT INNOVATION FLOW REPORTING
SEP’s Innovation Flow Reporting (IFR) service is designed to illuminate innovation hubs and identify and capture the best cleantech commercialization opportunities for SEP and our corporate clients. More than just market research, Innovation Flow Reporting delivers actionable information. IFR uncovers new cleantech opportunities for corporate venture capital offices, innovation programs, product development teams, and R&D departments. We know it works because we use it to drive our investing.
ABOUT SAORADH ENTERPRISE PARTNERS
Saoradh Enterprise Partners (SEP) is a cleantech venture capital and research firm based in Boulder, Colorado. SEP partners with innovators, entrepreneurs, and corporations to find solutions at the magical intersection of science (what’s possible), finance (what’s bankable), industry (what’s needed), and planet (what matters). Learn more at www.saoradh.com.