Compostable plastics market sees dramatic growth

By Brian R. Hook

Compostable plastics – biodegradable in soil or in a composting environment – may only be a small section of the overall plastics market, but that sliver is growing.

“There is a lot of growth” in the compostable plastics markets, said Keith Edwards, who works in market development out of Cincinnati for Florham Park, New Jersey based BASF Corp. – the North American affiliate of the German-based BASF Aktiengesellschaft (AG). He said that sales of the company’s compostable-product, trademarked Ecoflex, grew 25 percent in 2004. He expects Ecoflex sales to grow slightly more than that this year.

Ecoflex is designed to look, feel and perform like low-density polyethylene, Edwards said. He said it can be used for plastic bags and films. It also can be used for paper coatings, but he said compostable bags are currently driving the Ecoflex market.

“You can safely say that within eight weeks a bag composed of Ecoflex is basically going to be gone,” Edwards said, assuming that it is used in commercial composting programs that have well defined temperature and moisture levels.

“There are signs everywhere that the market is growing,” Edwards said. To meet growing demand, BASF has announced plans to build a new Ecoflex plant in Germany. As first reported last month by American Recycler, this new plant would almost double BASF’s Ecoflex capacity to around 14,000 tons a year. “Companies, like BASF, see the market continuing to grow and are putting resources behind the product,” he said.

To keep this momentum moving, Edwards said that the current international trend toward setting standards for compostable products is an important development. “There is a lot of credibility still lacking because of some campaigns done in the past where products were called biodegradable and they really weren’t,” he said.

The Biodegradable Products Institute, a not-for-profit trade organization based in New York, promotes the use of biodegradable polymeric material. The group, which also certifies compostable products, is open to any compostable materials and products that meet international testing requirements set by ASTM International, originally known as the American Society for Testing Materials, based in West Conshohocken, Pennsylvania.

BPI is also part of the International Compostability Certification Network, which includes similar trade groups in Europe, Japan, China and Taiwan. “Essentially we’ve agreed to work together to harmonize the specifications around the world so that manufacturers need only one fundamental set of criteria,” said Steve Mojo, executive director at BPI. “Marketers don’t need to redo the tests, which saves them money.”

Mojo said that he expects the market for compostable plastics, especially compostable plastic bags, to grow “dramatically” over the next few years along with the trend toward diverting food-waste to composting sites. He said that cities like San Francisco are leading the way by separating organic material from the waste stream.

“Where you find a lot of these programs taking place today are in areas where tips fees from landfills are fairly high,” Mojo said. “If you were to just use ordinary plastics, those materials don’t biodegrade. They don’t disintegrate. They need to be screened out at the end of the process or the fragments will detract from the end value of the compost.”

He said large manufacturers are also starting to use compostable plastics, leading to more volume. “People will learn how to run these materials more effectively and efficiently, so you will go higher up the learning curve,” driving down costs, Mojo said.

These market developments are starting to make up for the higher price of compostable plastics compared to more conventional plastics, according to Mojo. “The delta between the two is closer than it has ever been. The gap continues to close,” he said.

“I see more of this activity taking place everyday. I see there are a growing number of large companies, large suppliers, who are interested in this market. Those kinds of things tell me that the numbers are coming along slowly, but surely.”

Bob Boyle, technical sales manager at Cortec Corp., a producer of biodegradable plastic bags, headquartered in White Bear Lake, Minnesota, said that Cortec estimates the total potential for biodegradable bags at around 10 to 15 percent of the current volume.

Boyle said that his company expects to see sales of biodegradable bags grow by 500 percent annually for the next five years. He said that 75 percent of this is expected to come from collection bags, with a majority of those sales generated at the retail level.

Most of this demand in North America is coming from organic bag collection, according to Boyle. He said participants in community-based collection programs are using a vast majority of compostable plastic bags. “The reason this is the case is due to the cost avoidance and the environmental benefit that is actually realized,” he said.

Boyle said that for compostable bags to “truly be worth the cost, they must have a value that comes from higher participation rates.” And he said that one way for these participation rates to go up is by federal government participation. “If the U.S. government began to purchase compostable products or mandated organic waste diversion for its agencies, the market for compostable products would explode,” Boyle said.

Fortune Plastics Inc – a producer of polyethylene bags, sheeting and film, headquartered in Old Saybrook, Connecticut – also recently started to manufacturer compostable plastic bags. “The plastic effort has just begun and the overall market share is extremely small,” said Edward Gillespie, president of Fortune Plastics.

Gillespie said that most compostable bags are still made from paper. “Price is the ultimate consideration. Once plastic can reflect a savings over paper, the market will begin to shift. Once plastic compostable bags can reduce the spread between compostables and regular bags the market will explode,” Gillespie said.