The Biodegradable Packaging Market is driven by growing consumer awareness

The biodegradable packaging market is witnessing significant growth owing to the rising awareness about environmental protection among consumers. Biodegradable packaging such as paper bags, wrapping paper, wood boxes and cardboard boxes are preferred over plastic and polymer packaging as they decompose completely leaving zero carbon footprints. The biodegradable packaging materials are produced using agricultural waste, plant-based raw materials or other natural fibers that add very little non-renewable carbon to the atmosphere during breakdown. Biodegradable packaging find applications in food and beverages, pharmaceutical, personal and home care industries to name a few.

The Global Biodegradable Packaging Market is estimated to be valued at US$ 37,919.7 Mn in 2024 and is expected to exhibit a CAGR of 20% over the forecast period of 2023 to 2030.

Key Takeaways
Key players operating in the biodegradable packaging are BASF SE, Smurfit Kappa Group, Mondi Group, Rocktenn, Stora Enso, Clearwater Paper Corporation, Amcor, Novamont S.P.A., Kruger Inc., Reynolds Group Holding Limited, and International Corp. BASF SE offers packaging solutions such as Ecovio, Ecopure and Biofine under its biodegradable packaging portfolio. Smurfit Kappa Group provides renewable, recyclable and biodegradable packaging options through its EcopacTM and Ecoomega product lines.

The increasing awareness about reducing plastic waste and focus on sustainability is driving the demand for biodegradable packaging materials globally. Stringent regulations banning single use plastic by various governments and recycling initiatives by leading brands are further propelling the market growth.

The biodegradable packaging manufacturers are expanding their production facilities across Asia Pacific, North America, Europe and Latin America to cater to the growing needs of end use industries in respective regions. The growing e-commerce industry is also providing opportunities for growth of the biodegradable flexible packaging market.

Market drivers
The major market driver for biodegradable packaging is the stringent government regulations against single use plastic. Many countries and states have completely banned or imposed heavy taxes on single use plastic items. This is prompting the brands and retailers to shift towards eco-friendly biodegradable packaging solutions. Secondly, the growing health and environment concerns of consumers have increased the demand for sustainable packaging. The increased spending on premium and organic products is also surging the adoption of biodegradable flexible packaging like stand up pouches and wraps.

Current geopolitical tensions are significantly impacting the growth of the biodegradable packaging market. The ongoing Russia-Ukraine conflict and sanctions have disrupted global supply chains and increased prices of key raw materials like paper and plastic resins used in biodegradable packaging production. This has hampered production volumes and driven manufacturing costs higher for biodegradable packaging producers. The conflict has also reduced demand for non-essential goods in Europe amid economic uncertainties, impacting market expansion prospects. However, the market is expected to gradually recover as tensions ease and alternative sourcing strategies are adopted. Producers must diversify their supply networks, pursue local sourcing where possible, and pass on reasonable price increases to maintain profitability in the volatile geopolitical environment. Governments worldwide also need policies supporting the adoption of sustainable packaging to drive the transition to a low-carbon economy and insulate the market from geopolitical risks over the long run.

North America currently holds the largest share of the global biodegradable packaging market in terms of value, led by the United States. This is owing to strong government support through regulations promoting sustainable packaging and increasing consumer demand for eco-friendly options. However, the market in Asia Pacific is expected to surge rapidly over the forecast period driven by China, Indonesia, and India. This growth will be fueled by rising environmental awareness, a fast-growing e-commerce industry, and supportive government policies and initiatives in the region encouraging biodegradable alternatives to combat plastic waste. The biodegradable packaging market is also anticipated to experience significant expansion in countries like Brazil and Mexico due to ongoing industrialization and urbanization trends. However, lack of proper waste management infrastructure remains a challenge in many developing markets.