Rabobank predicts increased European bioplastic production

By Erin Voegele | February 05, 2014

The Netherlands-based Rabobank recently published a report that indicates European demand for bioplastics could require 1.2 million metric tons of sugar by 2020, up from 110,000 metric tons last year. The report, titled “Bioplastics Moving to the Beet,” also indicates that food and agriculture (F&A) companies the E.U. are expected to take on key positions in the growing bioplastics industry.

“Bioplastics have drawn the interest of two groups of companies in the F&A sector: those who want to package their food and beverages in bioplastic and those who want to supply the feedstocks to make it,” said Rabobank analyst Paul Bosch in a statement. “Bioplastics show the highest growth projections when it comes to potential demand for EU sugar. Rabobank estimates a [compound annual growth rate] of up to 40 percent; significantly higher than the 5 percent expected in bioethanol and the flat outlook for food markets.”

In its analysis, Rabobank estimates that demand for sugar from the bioplastic segment will grow faster than demand for food and biofuel, but that the bioplastic sector will still consume less sugar than the food and biofuel industries in 2020. The report shows that in addition to the 1.2 metric tons of sugar demand expected in the bioplastics sector in 2020, the European food industry will demand 14.3 million metric tons, followed by the biofuel industry with 2.7 million metric tons of demand.

Within its report, Rabobank addresses bioplastic production pathways being pursued by bioplastic developers. First, the analysis addresses the production of biobased ethylene, which is used as a replacement for fossil-based ethylene. It is estimated that half of all plastics manufactured today are derived from fossil-based ethylene. Biobased ethylene can be made from ethanol. While the report indicates that biobased ethylene costs are currently too high to justify building new production facilities in Europe, Rabobank said there is potential to use existing underutilized ethylene production capacity in north-western Europe to produce the biobased alternative.

Second, the analysis addresses the potential to produce biobased terapthalic acid (PTA), which when combined with biobased ethylene enables the production of 100 percent biobased polyethylene teraphtalic acid (PET). Alternatively, a biobased furandicarboxylic acid (FDCA) could be combined with biobased ethylene to produce biobased polyethylene furanoate (PEF), which has better barrier capabilities than PET.

Finally, Rabobank’s report indicates that several sugar companies are looking at possibilities outside of the plastic bottle market, including the development of biobased PLA.

In the report, Rabobank also notes that the food packaging industry is the best fit for bioplastics and predicts that most of the growth in bioplastics will be in packaging, which is the largest single market for plastics.

While many have argued that bioplastic production will be centered in regions with the lowest cost feedstock, Rabobank notes that there is also good reason to believe bioplastic production will also increase in Europe because locally-produced products are more sustainable and EU authorizes are likely to influence the competition on the cost side. The report also indicates there is capacity in Europe to increase sugar production.

Additional information on the report is available on the Rabobank website