Bioplastics challenge oil firms’ ambitions for plastics market
Materials made from sugar cane, wood and corn will grow at least 50% in next five years
Bioplastics currently make up about 1 per cent of the plastics market. Photograph: iStock
Companies that make packaging from plants instead of fossil fuels are starting to challenge the oil industry’s ambition to increase the supply of raw materials for plastics.
Use of bioplastics made from sugar cane, wood and corn will grow at least 50 per cent in the next five years, according to the European Bioplastics Association in Berlin, whose members include Cargill and Mitsubishi Chemical Holdings. German chemical giant BASF and the Finnish paper maker Stora Enso have stepped into the business to meet demand from the likes of Coca-Cola to Lego.
“Biochemicals and bioplastics could erode a portion of oil demand, much like recycling can erode overall virgin plastics demand,” said Pieterjan Van Uytvanck, a senior consultant at Wood Mackenzie, a research group focused on the oil industry. “It will become a larger portion of the supply.”
Oil companies make ethylene and other basic building blocks for plastic. They’ve been eyeing that market for growth as electric cars threaten to trim demand for fuel.
Bioplastics currently make up about 1 per cent of the plastics market, according to the industry’s organisation in Europe. They tend to have a smaller carbon footprint than their conventional counterparts. Some are also designed to naturally degrade after use.
The International Energy Agency forecasts that growth in the plastics market should boost petroleum demand. It takes about 8.5 barrels of oil-derived naphtha to produce the a ton of ethylene needed to manufacture 160,000 plastic bags, according to Bloomberg Intelligence calculations.