Biodegradable Plastic Market Set to Hit USD 21.10 Billion by 2033, Driven by Sustainability Trends

Biodegradable Plastic Market Analysis

The market for biodegradable plastic is expected to expand at a compound annual growth rate (CAGR) of 13.45% from 2025 to 2033, from US$ 6.78 billion in 2024 to US$ 21.10 billion by 2033. Growing consumer worries about environmental issues, supportive government legislation, and the growing need for eco-friendly packaging are the main drivers of this expansion.

Trends in the Biodegradable Plastic Market:

Changing consumer preferences towards eco-friendly products are driving growth in the biodegradable plastic market. Increased awareness of the environmental impact of traditional plastic has led to a rise in the adoption of biodegradable alternatives, which help reduce plastic waste in landfills and oceans. This shift also contributes to a decrease in the carbon footprint associated with plastic production.

Government regulations banning single-use plastic products, such as cutlery, straws, and food containers, are further promoting the use of biodegradable plastics, creating a favorable market environment. Additionally, the establishment of high-quality standards and certification systems is supporting market growth by ensuring product reliability.

The demand for eco-friendly packaging solutions, particularly from the food and beverage (F&B) industry, is providing lucrative opportunities for market expansion. Furthermore, the increasing use of biodegradable plastics in agriculture and horticulture—such as in the production of mulching films and plant pots—acts as another significant growth factor.

Key information covered in the report

• Base Year - 2024
• Historical Period - 2021-2024
• Market Forecast - 2025-2033
• Market - US$ Billion

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Ongoing technological advancements are enabling the development of more durable and cost-effective biodegradable products. The easy availability of sustainable bio-based materials, as opposed to petroleum-based plastics, is also strengthening market growth. Other contributing factors include the rising demand for convenience and ready-to-eat (RTE) food products, the proliferation of online food delivery platforms, and innovative advancements in waste management technologies, all of which positively impact the growth of the biodegradable plastic market.

Key Market Drivers of Biodegradable Plastic Market:

Stringent Environmental Regulations

Globally, governments are enforcing stringent laws to reduce plastic waste and encourage environmentally friendly substitutes, which is propelling the market for biodegradable plastics. The Single-Use Plastics Directive of the European Union, which encourages the use of biodegradable materials and requires a decrease in single-use plastic products, is a prime example. This directive intends to reduce CO2 equivalent emissions by 3.4 million tons, according to the European Commission, underscoring the urgency of such policies for the environment. Both consumers and manufacturers are being pressured by these regulatory frameworks to choose more environmentally friendly options. Because of this, the demand for biodegradable plastics is rising in the consumer products, packaging, and agricultural sectors, making regulatory pressure a key factor in determining the market's future growth trajectory.

Growing Sustainability Awareness Among Consumers

The demand for biodegradable plastics is rising sharply as consumers become more conscious of environmental issues. More and more people are giving sustainability first priority when making purchases, especially when it comes to packaging. 74% of customers are willing to pay more for sustainable packaging, according to a global poll, and awareness is growing quickly in places like North America and Europe. This change is a result of a larger cultural trend toward ecologically conscious consumption, which is pressuring businesses to use eco-friendly products. Manufacturers are reacting to consumers' growing association of environmental initiatives with brand value by including biodegradable substitutes into their products. By encouraging innovation and hastening the transition from conventional plastics to more environmentally friendly, compostable alternatives, this behavioral trend is a potent market expander.

Increasing Funding for Circular Economy Projects

Adoption of biodegradable plastics is being accelerated by large expenditures in circular economy projects. These programs emphasize material reuse, waste reduction, and industry-wide sustainability. The European Investment Bank (EIB), which pledged €5.4 billion to finance circular economy initiatives in 2021, is a noteworthy example. Biodegradable plastics and renewable resources are given priority in many of these programs, which aid in the development of the technologies and infrastructure required for mass manufacturing and distribution. These expenditures not only encourage innovation but also increase the affordability and accessibility of sustainable materials. With more chances for growth and long-term environmental impact, the market for biodegradable plastics is expanding as governments, financial institutions, and private businesses increasingly invest in circular economy solutions.

North America Biodegradable Plastic Market

The North American region is projected to experience the highest growth during the forecast period. Increased consumer awareness regarding the environmental impact of plastics is driving demand for biodegradable alternatives. A recent survey found that 61% of U.S. consumers are willing to pay more for products with eco-friendly packaging, prompting industries to adopt biodegradable plastics for their packaging solutions.

Additionally, federal and state regulations are encouraging the use of biodegradable plastics in both the U.S. and Canada. For instance, California’s Plastic Pollution Reduction Act (2020) mandates that by 2025, at least 25% of single-use plastic packaging must be biodegradable. This regulatory pressure supports the shift towards eco-friendly alternatives like biodegradable plastics in North America.

Moreover, there is a growing investment in green technologies within the region. The U.S. Department of Energy (DOE) allocated over $27 million in 2023 to research and develop bio-based materials, including biodegradable plastics. These investments are accelerating innovation and the commercial adoption of sustainable materials.

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Overview of the Biodegradable Plastics Market in Japan

The biodegradable plastics market in Japan has seen significant growth in recent years, driven by increasing environmental concerns and the demand for sustainable solutions. Biodegradable plastics are designed to naturally break down over time, thereby reducing the impact of plastic waste on the environment. As a technologically advanced nation, Japan has been actively adopting and promoting biodegradable plastics to combat plastic pollution and support a circular economy.

Japan has instituted stringent regulations and policies to encourage the use of biodegradable plastics. The government has established specific targets to reduce plastic waste and facilitate the transition to sustainable materials. For example, the Plastic Resources Recycling Promotion Act aims to achieve a 25% recycling rate for plastic packaging by 2030. Such regulations have spurred companies to invest in biodegradable plastics and develop innovative solutions.

The growth of the packaging industry is also influencing demand for biodegradable plastics, especially due to the rising popularity of packaged foods, snacks, and ready-to-eat meals (RTEs). During the forecast period, the rapidly expanding packaging sector is expected to further boost the demand for biodegradable plastics.

Several major companies in Japan are actively participating in the biodegradable plastics market. These companies are concentrating on research and development, product innovation, and strategic partnerships to strengthen their positions in the market.

Recent Developments in Biodegradable Plastic Market

Beyond Plastic and CJ Biomaterials established a partnership in March 2024 to create biodegradable bottle caps made of plastic. Polyhydroxyalkanoate (PHA), a biopolymer obtained from natural sources, is used to make the cap. It improves the functionality of traditional plastics and has positive environmental effects.

Balrampur Chini Mills Ltd. invested USD 267 million (INR 2,000 crore) in bioplastics in February 2024 and plans to establish a PLA facility that can produce 75,000 tons annually.

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