Biodegradable Plastic Market - Global Industry Size, Share, Trends, Competition, Opportunity and Forecast, Segmented By Type (Starch Blends, Polylactic Acid (PLA), Polybutylene Adipate Terephthalate (PBAT), Polyhydroxyalkanoate (PHA), Others), By End User (Packaging, Consumer Goods, Textiles, Others), By Region and competition, 2021-2031F

Forecast Period	2027-2031
Market Size (2025)	USD 3.42 Billion
CAGR (2026-2031)	6.21%
Fastest Growing Segment	Polylactic Acid (PLA)
Largest Market	North America
Market Size (2031)	USD 4.91 Billion

Market Overview

The Global Biodegradable Plastic Market will grow from USD 3.42 Billion in 2025 to USD 4.91 Billion by 2031 at a 6.21% CAGR. Biodegradable plastics are polymeric materials engineered to decompose into water, carbon dioxide, and biomass through the enzymatic activity of microorganisms. The sector is fundamentally driven by rigorous government legislation targeting single-use waste and a growing corporate commitment to circular economy principles. These structural drivers differ from transient trends by enforcing long-term compliance and strategic operational shifts across supply chains. According to European Bioplastics, in 2024, the global bioplastics production capacity stood at approximately 2.47 million tonnes with packaging representing the largest market segment at 45 percent.

However, the industry faces a substantial challenge regarding the high cost of production relative to conventional petroleum-based counterparts. This economic disparity creates a barrier for price-sensitive manufacturers and limits mass adoption in cost-critical sectors. Furthermore, the limited availability of specialized industrial composting infrastructure often prevents these materials from degrading as intended, effectively stalling broader market integration and impeding the realization of their full environmental potential.

Key Market Drivers

Implementation of stringent government regulations and bans on conventional single-use plastics acts as a primary catalyst for the structural expansion of the biodegradable plastic sector. Legislative frameworks globally are shifting from voluntary guidelines to mandatory compliance, compelling manufacturers to substitute fossil-fuel-based polymers with compostable alternatives. This regulatory pressure is particularly evident in major manufacturing hubs where policy incentives are rapidly scaling production capabilities to meet new environmental standards. For example, according to CHEManager Online, January 2025, policy incentives in China are driving the bio-based polymer industry to a projected output of 2.53 million tons by 2026, up from 765,000 tons in 2023. Such state-level interventions effectively de-risk the high capital expenditure required for biopolymer manufacturing, ensuring that industrial capacity aligns with the mandated reduction in virgin plastic consumption.

Simultaneously, corporate commitments to circular economy models and carbon neutrality goals are driving substantial investments in production infrastructure. Major material science companies are expanding their operational footprints to secure supply chains for global consumer brands that are transitioning away from petrochemical packaging. According to CHEManager Online, January 2025, Emirates Biotech announced plans in December 2024 to construct a new biopolymer plant in the United Arab Emirates with an annual capacity of 160,000 tons, positioning the region as a key supplier for polylactic acid (PLA). This strategic scaling is indicative of a broader industry trend towards mass adoption and supply chain resilience. Reflecting this positive trajectory, according to European Bioplastics, December 2024, the global bioplastics production capacity is forecast to increase to approximately 5.73 million tonnes by 2029, underscoring the sector's robust response to these dual demand-side and regulatory pressures.

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Key Market Challenges

The high cost of production relative to conventional petroleum-based counterparts creates a formidable economic barrier that stifles the expansion of the biodegradable plastic market. Manufacturers in price-sensitive industries, particularly within the high-volume packaging sector, operate on thin profit margins that cannot absorb the premium associated with these advanced materials. Unlike established fossil-fuel plastics which benefit from decades of optimized supply chains and massive economies of scale, biodegradable options remain expensive to produce, rendering them commercially unviable for widespread application in cost-critical markets.

This financial disparity severely limits the industry's ability to transition from niche segments to mainstream adoption. The prohibitive pricing restricts demand to specialized eco-conscious consumers, thereby preventing the volume growth necessary to drive down unit costs. The impact of this challenge is evident in the sector's minimal global footprint. According to European Bioplastics, in 2024, bioplastics represented roughly 0.5 percent of the almost 414 million tonnes of global plastic production. This low market penetration underscores how production costs directly impede the industry's growth potential and stall its integration into the broader manufacturing landscape.

Key Market Trends

The commercialization of seaweed and algae-based biopolymers is emerging as a critical trend to decouple packaging supply chains from terrestrial land use and freshwater consumption. Unlike starch-based incumbents that compete with food crops, marine feedstocks offer a regenerative alternative that actively sequesters carbon during growth while providing superior barrier properties for grease and moisture resistance. This sub-sector is rapidly transitioning from R&D to scalable manufacturing, evidenced by significant capital inflows into companies developing home-compostable barrier films that do not require chemical additives. According to the Maritime Forum, February 2025, in the article 'Seven Seaweed Trends That Shaped 2024 and Beyond', seaweed-derived bioplastic firms maintained strong investment momentum throughout 2024, with the packaging innovator Notpla securing $26.8 million to expand its portfolio of biodegradable coatings and films.

Simultaneously, the market is witnessing a rapid structural shift toward Polyhydroxyalkanoates (PHA) as the preferred material for applications requiring marine biodegradability and high thermal stability. Manufacturers are increasingly favoring this bacterially synthesized polyester over PLA for functional packaging because it degrades efficiently in natural environments without requiring specialized industrial composting facilities. This technical superiority is driving a massive expansion in installed manufacturing capacity as the material moves towards mainstream commercial availability. According to European Bioplastics, December 2024, in the 'Bioplastics Market Development Update 2024', the production capacity for PHAs is projected to grow substantially to reach 0.97 million tonnes by 2029, capturing approximately 17 percent of the total global bioplastics market share.

Segmental Insights

Polylactic Acid (PLA) represents the fastest-growing segment within the global biodegradable plastic market, primarily driven by its extensive versatility in packaging applications. This material is increasingly favored because it is derived from renewable resources such as corn starch and offers durability comparable to conventional thermoplastics. The segment expansion is further supported by stringent sustainability mandates from organizations like the European Commission, which advocate for the reduction of single-use fossil-based products. Consequently, manufacturers are rapidly adopting PLA for food containers and flexible films to align with global environmental standards and corporate sustainability goals.

Regional Insights

North America holds a dominant position in the Global Biodegradable Plastic Market, driven primarily by stringent government regulations and increasing consumer demand for sustainable packaging solutions. The market expansion is significantly supported by federal initiatives, such as the United States Department of Agriculture BioPreferred Program, which mandates the procurement of bio-based products by federal agencies. Additionally, Canada has implemented strict prohibitions on single-use plastics, further accelerating the adoption of biodegradable alternatives. This combination of supportive legislative frameworks and corporate sustainability commitments establishes North America as the leading regional market.

Recent Developments

• In December 2024, Kaneka Corporation announced the significant adoption of its proprietary biodegradable polymer, Green Planet, by Starbucks Coffee Japan, Ltd. The coffeehouse chain selected the 100% biomass-derived material to manufacture straws, aiming to replace conventional petroleum-based plastics in its operations. This rollout was scheduled to commence in designated stores before expanding nationwide, aligning with the brand’s commitment to reducing environmental impact. The Green Planet polymer is designed to biodegrade easily in both soil and seawater, offering a practical solution to marine pollution while maintaining the durability required for consumer beverage applications.
• In November 2024, Walki Group finalized a strategic partnership with Lactips to co-develop fully biodegradable and plastic-free food packaging solutions. This collaboration combined Walki’s expertise in fiber-based packaging with Lactips’ innovative natural polymer derived from casein, a protein found in milk. The resulting packaging materials were designed to be fully recyclable within the existing paper stream, addressing the urgent industry need for sustainable alternatives to single-use fossil-based plastics. The initiative also aimed to help food manufacturers comply with the increasingly stringent requirements of the European Union’s Single-Use Plastics Regulation.
• In August 2024, TotalEnergies Corbion entered into a strategic distribution and research agreement with Nagase & Co., Ltd. to advance the adoption of Luminy PLA bioplastics in Japan. Under the terms of the collaboration, the partners agreed to not only expand the market reach of the polylactic acid materials but also to engage in joint research and development to tailor material properties for specific local applications. This partnership was positioned to support Japan’s carbon neutrality objectives by providing high-performance, biobased alternatives that significantly reduce the carbon footprint compared to traditional plastics used in durable goods and packaging.
• In April 2024, NatureWorks and IMA announced a collaborative effort to launch a turnkey compostable coffee pod solution for the North American market. By leveraging NatureWorks' Ingeo PLA biopolymer, the partnership developed a complete rigid capsule system, including the body, filter, and lidding, that is fully compostable. The companies verified that the new biopolymer solution matched the brewing performance and production line speeds of incumbent materials, ensuring commercial viability. This innovation provided coffee brands with a scalable method to divert single-serve packaging waste from landfills to industrial composting infrastructure, promoting a circular economy model.

Key Market Players

• Novamont S.p.A.
• NatureWorks LLC
• Futerro Inc.
• Corbion N.V.
• BASF SE
• Kingfa SCI. & TECH. Co. Limited
• Zhejiang Hisun Biomaterials Co. Limited
• Danimer Scientific Inc.
• Kaneka Corporation
• Mitsubishi Chemical Holdings Corporation

By Type	By End User	By Region
Starch Blends Polylactic Acid (PLA) Polybutylene Adipate Terephthalate (PBAT) Polyhydroxyalkanoate (PHA) Others	Packaging Consumer Goods Textiles Others	North America Europe Asia Pacific South America Middle East & Africa

Report Scope:

In this report, the Global Biodegradable Plastic Market has been segmented into the following categories, in addition to the industry trends which have also been detailed below:

• Biodegradable Plastic Market, By Type:

• Starch Blends
• Polylactic Acid (PLA)
• Polybutylene Adipate Terephthalate (PBAT)
• Polyhydroxyalkanoate (PHA)
• Others

• Biodegradable Plastic Market, By End User:

• Packaging
• Consumer Goods
• Textiles
• Others

• Biodegradable Plastic Market, By Region:

• North America
• United States
• Canada
• Mexico
• Europe
• France
• United Kingdom
• Italy
• Germany
• Spain
• Asia Pacific
• China
• India
• Japan
• Australia
• South Korea
• South America
• Brazil
• Argentina
• Colombia
• Middle East & Africa
• South Africa
• Saudi Arabia
• UAE