While still niche, the bioplastics market is growing. As consumers increasingly prefer more bio-based products, interest in bio-based petrochemical feedstocks is also growing. Bio-naphtha, a side product of second-generation hydrotreated vegetable oil biofuel plants, has a 50% to 80% lower greenhouse gas footprint compared to petroleum feeds, depending on the feedstock.
Using bio-naphtha as a drop-in feedstock in naphtha crackers, producing olefins and aromatics for bioplastics production, ‘could bring to the table a viable roadmap in achieving decarbonisation all along the value chain’, market intelligence firm S&P Global said in a recent insight blog.
The company predicts bio-naphtha is set to see a growing market in Europe and Asia, spurred by bioplastics demand and fuel blending mandates. While there is no bioplastics mandate in the European Union, and indeed rather a cautionary approach to the materials, the European Commission adopted new rules establishing the share of biofuels in mixed fuels this June. The United States has done the same, and five Asian countries have enacted blending mandates, Indonesia, Malaysia, Thailand, the Philippines, and Vietnam. As for bioplastics, Japan formulated a ‘Roadmap for bioplastics introduction’ in 2021, whilst the U.S. has a set a goal to replace 90% of plastics with biomaterials within the next 20 years.
Global biorefinery capacity has been expanding in recent years and is estimated to grow from 19 million mt/year as of 2023 to upward of about 50 million mt/year by 2030 in output including renewable diesel, jet fuels, bio-naphtha, and bio-LPG, based on the delivery of committed projects, according to research by the Biofuels Research and Analytics team at S&P Global Commodity Insights. Whilst the bio-naphtha market might stagnate in 2023 after expansion in the past few years, ‘major players are still seen to be investing along the bio-chemicals chain’, according to S&P Global.
“Bio-naphtha is currently used for two major downstream applications - fuel blending and bioplastics production - in major markets such as Europe,” S&P Global wrote. “Although fuel blending is considered the sector with a bigger market share in Europe, market participants generally expect bioplastics demand to dominate.”
The higher cost of bioplastics has been determinant in keeping demand low, at around 1% of the total polymer market, but ‘consumer-oriented applications may still opt for bioplastics based on a sustainability angle’, the analyst firm said citing European market sources.
“One example is the European toy sector, which is heard producing with bioplastics rather than recycled plastics because of legislative concerns about material safety for small children. In Asia, increased interest amongst brand-owner groups from South Korea and Japan such as cosmetic brands have generated some demand in the field,” S&P Global concluded.