Written by Rajeev Prabhakar, Andy Walberer, and Emily Rowe, Kearney Global Management Consultants

It’s a grand vision: plastic packaging, made from renewable crops, would no longer go to landfills and oceans. Instead of filling up our trash, it would decompose into organic matter in the natural environment. Companies could replace most of their fossil fuel packaging with biodegradables and make enormous progress in sustainability.

That vision could still happen, but such bioplastics are a work in progress, with complexities still to resolve. Some bioplastics have achieved commercial scale, with prices close to those of fossil fuel plastics. Yet those bioplastics either aren’t biodegradable at all (Bio-PET), or biodegrade only under industrial heating conditions (PLA). Other bioplastics biodegrade under consumer conditions, but come with high prices and limited applications. So current bioplastic applications are still in niche areas. We can have affordable plastics with lower emissions and without fossil fuels, or we can have expensive biodegradable plastics, but so far it’s been challenging to have both.

We believe bioplastics can help with sustainability, but companies need to assess the net benefit. Some applications show more promise than others. And while helping to develop bioplastics, companies can also improve both the recyclability and the recycling infrastructure for fossil fuel plastics, as these are still necessary to achieve sustainability with bioplastics.

What are bioplastics?

Let’s define the term, which can be confusing. After all, nearly all plastics come from biological feedstock. But bioplastics typically address two separate groups of plastics: all those made from recent biomass (whether biodegradable or not) and those made of ancient biomass (fossil fuels), specifically constructed to be biodegradable. Bioplastics thus exclude all fossil fuel plastics that are not biodegradable, which accounts for 99 percent of all plastics now in use.

Bioplastics have drawn great interest: brands from beer to baby formula have tried them out to appeal to consumers looking to minimize waste. Plastics get extra attention because of worries about microplastics getting into the diet of marine life and eventually humans, along with carbon emissions from both the incineration of plastic waste and production itself.

Many consumer product manufacturers have pledged to make all their packaging recyclable, reusable, or compostable (biodegradable) by 2025. Yet these companies are struggling to make progress. Not only are popular formats such as flexible packaging difficult to recycle, but actual recycling is also falling far short of expectations.

Bioplastics, in theory, are an ideal solution, but progress so far hasn’t achieved this goal. Bioplastics with equivalent performance, such as Bio-PET (polyethylene terephthalate), have the same recycling requirements as fossil fuel-based PET (FF-PET).
Some bioplastics are biodegradable, such as PLA (polylactic acid), but only under high heat in industrial settings. For these plastics to biodegrade, municipalities need separate collection and composting systems. PLA is also recyclable, but not in most existing recycling streams.

Other bioplastics do biodegrade under common household and commercial conditions. PHA (polyhydroxyalkanoic acid) and PBS (polybutylene succinate) fall apart much faster than other plastics, partly because they come from bacterial fermentation. Yet it’s difficult to control their degradability, so brands have used them mainly for fragile boundaries, such as film, coatings, and bags. That limitation, combined with the higher cost of production (their complexity requires manufacture in batches) has also reduced their popularity. Note that some fossil fuel plastics are also biodegradable, such as PBAT (polybutylene adipate terephthalate), but these bioplastics have the same problems as PHA.

A dual approach to sustainability

Most companies using packaging must therefore assess the real-world pathway for each bioplastic. Are appropriate composting or recycling facilities in place in a specific region? If a company is determined to push bioplastics, it can offset higher costs by light-weighting the package or reducing components. Or it can charge a sustainability premium, justifying it to consumers by promoting the packaging’s environmental benefits.

PHA, the most versatile fully biodegradable plastic, is still a marginal player in the packaging world. Despite a projected annual growth rate of 45 percent, it will take time to move beyond niches and capture a significant share of the global packaging output. It will continue to garner a significant cost premium over fossil fuel plastics until manufacturers achieve greater consistency and scale.

To see where bioplastics could provide value, Kearney analyzed the options for food and beverage packaging (see figure).

The biggest environmental benefits for easily biodegradable bioplastics will show up where current package designs and formats are not easily recyclable (such as films, or when food contamination makes recycling difficult). Additional benefits could arise with major market shifts and lead to greater adoption. For example, if the prices of bioplastics fall substantially, due to innovation in manufacturing or access to lower-cost feedstocks such as used cooking oils, brands could introduce the materials in a broader set of applications. Stronger regulatory requirements for using bioplastics (or widespread industrial composting) could also support wider adoption.

While encouraging developments in bioplastics, companies should also consider how they can help promote investment in recycling infrastructure for both conventional and bioplastics. This infrastructure will be essential for reducing waste and increasing the amount of post-consumer recycled material available on the market.

With maturing markets, the grand vision for bioplastics could still come to fruition, so brands should watch this space. They can start with some niche products, and contribute where the economics make sense—all while continuing to invest in downstream infrastructure to manage plastic materials at end of life.

This article was written by Rajeev Prabhakar, Andy Walberer, and Emily Rowe and sent as part of a monthly perspective Kearney shares with its clients on the bigger trends unfolding across the operations landscape.

Rajeev Prabhakar is a senior partner in Kearney’s energy and process industries practice who specializes in strategy and M&A, operations excellence, sustainability, and complexity management. He is based in Philadelphia.

Andy Walberer is a senior partner and global lead for Kearney’s chemicals practice, specializing in corporate transformation, M&A strategy, and innovation in the chemicals industry. He is based in Chicago.

Emily Rowe is a specialist manager in Kearney’s sustainability practice with in-depth experience in climate strategy, sustainable supply chains, circularity in operations, and post-merger integrations. She is based in Toronto.