Compostable Plastic Market Poised for Significant Growth, Projected to Reach USD 5 Billion by 2030

The global Compostable Plastic Market is experiencing rapid expansion, with market size projected to grow from USD 2 billion to USD 5  billion by 2030, at a compound annual growth rate (CAGR) of 12 % from 2025 to 2030. The rising demand for sustainable alternatives to conventional plastics and the increasing number of government initiatives to ban single-use plastics are key factors fueling market growth.

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Market Dynamics and Trends

The global shift towards environmental sustainability has accelerated the adoption of compostable plastics. These materials, made from renewable sources such as corn starch, potato starch, cellulose, and soy protein, decompose naturally into carbon dioxide, water, and biomass when treated with soil, making them a viable eco-friendly solution.

Governments worldwide are enforcing strict regulations to eliminate single-use plastics, further driving market expansion. Notably:

• In 2020, the German government announced a ban on single-use plastic products, including cutlery, straws, and food containers.
• China implemented a nationwide ban on non-biodegradable plastic bags in major cities by 2022.
• India launched the ‘Dular Kit’ initiative, introducing compostable carry bags and home compost solutions as part of its ‘Reduce, Reuse, Recycle’ strategy.

However, challenges such as high production costs and a lack of skilled labor remain barriers to market growth. Despite these hurdles, technological advancements and innovative products, such as Hemptensils’ plant-based disposable utensils, are expected to create new growth opportunities.

Market Segmentation and Scope

The compostable plastic market is segmented based on type, application, product, end-use industry, and geography:

• By Type: Home compostable plastic (including BioPBS FD92, BWC BF 90A, and Ecopond Flex 162) and others.
• By Application: Compostable cutlery, bags, straws, gloves, cups, trays/dishes, and more.
• By Product: Starch-based plastics, PLA, PHA, PBAT, and PBS.
• By End User: Packaging, consumer goods, textiles, agriculture & horticulture, and others.
• By Geography: North America, Europe, Asia-Pacific, and the Rest of the World (RoW).

Geographical Analysis

North America: Market Leader in Compostable Plastics

North America currently dominates the global compostable plastic market, driven by innovation and the adoption of eco-friendly disposable gloves such as Tri-Polymer Gloves, which offer 90% degradation and resistance to viruses, germs, and fungi. Additionally, major market players are focusing on product launches to strengthen their market presence:

• In March 2021, World Centric introduced a collection of certified compostable molded fiber, single-use cutlery, and serving utensils.

Europe: Steady Growth with Increasing Product Launches

Europe is expected to experience a steady rise in the biodegradable plastic market, with several companies launching compostable plastic products:

• In June 2020, EcoTensil introduced plastic-free paperboard utensils, including cutlery, plates, and straws, across Europe.
• In March 2022, Huhtamaki OYJ expanded its molded fiber packaging production, aiming to provide plastic-free food packaging solutions in the region.

Asia-Pacific: Fastest Growing Market

Asia-Pacific is projected to be the fastest-growing market, with significant contributions from China, India, and Australia. The increasing demand for compostable plastics in food packaging and consumer goods sectors is a key driver. Additionally, the expansion of the biodegradable plastic industry is fueled by government initiatives and regulations banning single-use plastics.

Competitive Landscape

The compostable plastic industry is highly competitive, with leading companies adopting various strategies, including partnerships, collaborations, and product innovations. Key players include:

• BASF SE
• Biome Technologies Plc
• Corbion N.V.
• Danimer Scientific
• Dow, Inc.
• Eastman Chemical Company
• Kuraray Co., Ltd.
• Mitsubishi Chemical Holdings
• Novamont S.P.A
• Ptt Global Chemical Company Limited

Strategic Partnerships and Product Innovations

• BASF & WPO Polymers Collaboration (September 2021): This partnership aimed to distribute Biopolymer Ecovio, an organic compostable plastic used for fruit and vegetable bags in Spain and Portugal.
• BASF & BillerudKorsnäs Collaboration (December 2020): The companies developed a home-compostable paper laminate for flexible packaging, suitable for wrapping cookies, ice cream, and dairy products.

Future Outlook

With increased environmental awareness, regulatory support, and innovations in compostable plastic technology, the global compostable plastic market is poised for significant expansion. Companies investing in R&D and strategic collaborations are expected to capitalize on the growing demand for sustainable packaging solutions.