Could war in Europe boost the bioplastics industry? Tipa calls for fossil fuel disconnect

14 Mar 2022 --- The bioplastics industry could experience a boom as fossil fuel-based virgin plastics face sharp price rises and material shortages due to COVID-19 disruptions, economic inflation and political conflict, according to Tipa. We speak to the Israeli bioplastics leader to understand how the recent invasion of Ukraine could spur an industry rush to source bio-based alternatives and what this could mean for environmental sustainability.

Tipa’s vice president of strategy analysis and public affairs, Julia Schifter, says the culmination of years of forces majeures negatively impacting traditional energy supplies and resources, combined with the recent outbreak of war in Ukraine, could put the bioplastics industry in prime position for rapid expansion.

“The bioplastics industry relies more on renewable plant-based resources rather than on fossil fuels. A third generation of bioplastics being developed now also will rely on waste streams like carbon emissions and food waste to create new bioplastics, and will enable further disconnect between bioplastic packaging and fossil fuels,” she says.

“In 2021, the prices of plastic polymers have risen over 50% following significant shortages due to the Texas (US) freeze, along with other multiple volatility aspects in the market. The existing war in Ukraine adds much more pressure on the prices of oil and gas, even beyond the spike increase of prices already in 2021.”

“The bioplastic industry, therefore, supports the stability of prices by disconnecting from the price of oil and gas and also supports a much greater cause of removing our dependency on depleting resources with a significant environmental and human health toll.”

Call for investment and subsidies
Schifter says the continuous volatility in the prices of oil and gas, beyond the price spike increases throughout 2021, should encourage government incentives to support the uptake of bioplastics.

Tipa is a leading producer of biodegradable packaging solutions.Recently, Russian officials warned that sanctions against its oil and gas markets could backfire on Western nations, resulting in prices of crude rising to US$300 per barrel.

This issue is compounded by turmoil within the European plastics industry, as converters and suppliers battle over who is shouldering the inflating costs of materials.

“The current bioplastic industry still represents a very small niche in the market. Globally, 400 million metric tons of plastic are produced per year vis-a-vis merely 1 million metric tons of bioplastics,” explains Schifter. “The largest industry that uses plastic is the packaging industry with 40% of all plastic produced used to make single-use packaging.”

“If we are connecting the dots between the raw materials used to produce the vast majority of plastics today and their almost absolute dependence on fossil-fuel derivatives, it should be ringing some alarm bells globally and propel a more careful look at how to disincentivize industry from using depleting and unstable fossil fuel-derived resources and use the opportunity to fully capture the value proposition of bioplastics.”

Bioplastic momentum
Some experts feel that the war in Ukraine and other issues over the past several years has little impact on the necessity for replacing fossil fuels with more environmentally sustainable alternatives like bioplastics. A spokesperson from European Bioplastics, an association promoting the use of biopolymers in packaging and other applications, tells PackagingInsights: “Regardless of current political or economic crisis, the striving towards a more sustainable lifestyle away from crude oil has already significantly gained momentum over the past years.”

“With fossil fuel prices being at historic highs, bioplastics become economically more attractive. Although fossil fuel prices can be expected to ease up again, we already had a foretaste of the direction prices will develop in the future with decreasing fossil resources.”The war in Ukraine has driven up fossil fuel prices, giving bioplastic alternatives a chance to become more cost competitive.

Policy promises and loopholes
While countries like France, Italy and China have already implemented various government incentives to promote the adoption of bioplastics, such tools span from a total ban on certain plastic applications to demanding that those be replaced with bioplastic compostable solutions. Other tools used already incentivize the bioplastic industry by assuring reduced extended producer responsibility (EPR) taxes, explains Schifter.

“In France, the sale of any plastic shopping bags and fresh produce bags has been banned since 2017 while compostable solutions are acceptable and encouraged to be used. China has also recently banned plastic shopping bags and all mailer bags while demanding those be replaced with compostable materials. Italy exempts compostable materials altogether from paying EPR taxes.”

Italy’s exemption of compostable single-use plastics came under fire recently, with activists demanding the country’s policymakers be taken to court for defying EU law, which they say could threaten the integrity of the single market.

“Yet, some counties still lag behind significantly in applying proper tools to assure the reduction of fossil fuel-derived, non-circular products that are placed in the market,” she continues.

“The upcoming UK Plastic Packaging Tax is a key example where the regulator aims to reduce the amount of virgin plastic in the market while it completely neglects to assure the bioplastic industry is offered the same playing level. Thus, the result is that the bioplastic industry will be penalized via this tax rather than being supported and promoted.”

PackagingInsights recently explored the latest trends in biodegradable packaging with experts in the field.

By Louis Gore-Langton

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