From plastic filler produced with lignocellulosic fiber, to corn cob-based levulinic acid esters and biomass-based plasticizers, companies in the bioplastics sector are quickly moving to commercial production. Ongoing research and development activities in the bioplastics arena seem to have reached a tipping point, and the long-term market potential looks extremely positive.

What we are seeing right now-and expect to see in the future-is increased interest from venture capitalists in investing in renewable chemical platforms, including bioplastics, says Brent Erickson, executive vice president of the Biotechnology Industry Organization. "I think the long-term prospects for the sector are very good," he says.

According to Erickson, one factor driving interest in biobased plastics is the volatility in the oil and gas markets. "The volatility presents a real problem for the chemical industry," he says. "They are starting to look for new feedstocks, something the chemical industry is really starting to move towards to get some price stability."

Increased consumer demand for environmentally friendly products is also driving bioplastics’ market-share growth. There is greater awareness among brand owners regarding the opportunity that bioplastics can provide in differentiating their products from those of competitors, says Snehal Desai, business vice president at Segetis Inc., a Minnesota-based company that is developing biobased plasticizers. According to Desai, many brand owners are also working to reach sustainability targets, and realize that biobased plastics can assist in achieving those goals.

While the current price of some bioplastic materials may be prohibitively high for potential customers, Erickson says that is not expected to be a long-term problem. "I really expect to see the price of biobased plastic decrease," he says. "That premium is going to go away. As companies expand their production and become more efficient in producing the plastics, the price will go down. We saw that in the early days of petroleum plastics, and we are going to see the same thing with regard to bioplastics. Over time the price will go down, and that [cost premium] will be less and less of a factor." Desai agrees, noting that the current price premium is often a function of scale. Once production is scaled up, the price of bioplastics should come down.

Although the long-term outlook for bioplastics is bright, several factors are impeding short-term growth in the sector, including access to capital and government support. While the U.S. government has been very supportive of biofuels, Desai says there has been a lack of support for other biobased materials. "A biorefinery by definition should involve fuels as well as chemicals and plastics to make the whole footprint economical," Desai says. "Yet there is very little support coming from the U.S. government on the biomaterials and bioproducts end of the equation. That is needed because it is going to help drive overall affordability, and help de-risk some of the technology that needs to get to the market."

Erickson agrees that the U.S. government isn’t doing enough to build a domestic bioplastics industry. "We are starting to see companies go oversees and build capacity because it’s less expensive," he says. "I think that is bad for the United States and it is bad for our job situation. I really feel like congress and the administration need to do more in the way of providing incentives for bioplastics." According to Erickson, BIO has developed a production tax credit proposal for bioplastics that would help incentivize U.S. production.