Author: Jaakko Siltaloppi/ Aalto University
The purpose of the ValueBioMat project is to advance the decoupling of the plastics industry from fossil hydrocarbons. This calls for new bio-based feedstocks, technology for polymer synthesis and manufacturing, new models for recycling, as well as new business models that structure the industry’s value creating activities to leverage bio- and circular economy.
Based on 24 interviews with stakeholders across the wider plastics ecosystem, we have identified several challenges related to the transition to bioplastics.
A number of limitations and challenges are associated with the use of bio-feedstocks, for example pertaining to the available sustainable agricultural land and competition with food production. This exposes companies to new business risks.
Bio-based and recycled plastics also cannot compete against current solutions on material properties and price. Add in compatibility issues with current manufacturing processes and the efforts of value chain actors to maintain their profit margins, and the business case for bioplastics looks unattractive.
Furthermore, industrial supply chains are slow to transform. Stabilized roles among actors and path-dependent investments made to processes optimized for fossil-based virgin plastics, the growth of new bioplastic solutions remains slow.
Finally, while national and international legislation, particularly in the EU, drives development toward more sustainable options, many issues remain unresolved. For example, the extended producer responsibility models cultivate sub-optimal solutions with product designs and recyclability. Many unresolved questions also remain in the upcoming legislation, which inhibits current developments as companies remain uncertain about the impact of future policies on their business.
What can be done to address the issues?
At least three promising avenues are emerging for the transition of the plastics industry.
First, large consumer brands, such as Coca Cola, Unilever, Ikea, and Lego, are waking up to the growing demand for more sustainable materials in both products and packaging. Seeing an opportunity to offset higher material costs with increase in brand recognition and value, these companies are using their power to drive the adoption of bio-based and recycled plastics in their supply chain.
Second, innovations in biomaterials are increasing the number of alternatives available to manufacturers and consumer brands. The forestry sector in Finland is a showcase example in generating new innovative materials out of wood, including various types of biocomposites and bioplastics. Also, oil and petrochemical companies like Neste are developing and investing in technologies that allow the use of bio-based and recycled hydrocarbons in industrial-scale petrochemical processes.
Third, the development of recycling technology, both mechanical and chemical, enables a significant increase in the recycling rate of plastics in accordance with the EU directives. While many challenges remain unsolved, new technology coupled with growing market demand for recycled plastics opens new business opportunities for existing and new actors in the recycling value chain.
In the ValueBioMat project, we continue to investigate in detail these and other business opportunities related to bio-based and recycled plastics. In particular, we look at the development and commercialization of bioplastics from a systemic viewpoint, integrating technological, value chain, and business perspectives to identify pioneering solutions and new business models for a sustainable plastics industry.