Introduction to Polyhydroxyalkanoates: -
Polyhydroxyalkanoates (PHAs) are biodegradable natural polyester produced by various bacteria in the form of intracellular granules for energy / carbon storage under insufficient nutrient conditions. PHAs can be differentiated in more than 150 types depending on their basic building blocks and side chain. The side chain is mostly a saturated alkyl monomer. Most PHAs are chiral compounds as the synthesis is stereospecific. Naturally only R configured PHAs are found. Depending on the length of the carbons in the chain, PHAs can be classified in Short Chain, Medium Chain and Long Chain PHAs. The major differentiating factor for PHA from other bioplastics is its biodegradability. PHA is among the very few polymers which can biodegrade even under the ocean. High biodegradability of the PHA is one of the key drivers for the market. PHA is feed for living organisms under all environments (including ocean) and hence it biodegrades under every environmental conditions. However, the rate of biodegradation varies accordingly, depending on various external conditions like humidity, temperature, oxygen etc. Biodegradability of PHA is an advantage where separation of plastics is not feasible or possible.
Polyhydroxyalkanoates Demand Analysis
Global PHA demand was estimated to be over 50 kilo tons in 2022. The PHA market has witnessed strong growth during past five years. The global PHA market has grown at an annual average rates of 13% between 2016-2021 to the current levels primarily driven by increase PHA demand from packaging applications. In the coming years, PHA market is projected to cross 280 kilo tons, implying a CAGR of 18% during 2023 to 2032. The high growth rate can be attributed to increasing PHA consumption from North America and Western European countries. PHA has started gaining tractions in recent years mainly due to its biodegradability. PHAs are biodegradable under most of the surroundings conditions and even under ocean. The PHA is being marketed as the green & sustainable solution to conventional plastics such as PP, LDPE, and HDPE. PHA is produced form variety of feedstocks including waste food, agricultural crops, oils, and cassava starch. However, the Carbon neutrality of these feedstocks is still undetermined. At present only PHA produced from tertiary feedstock such as food-waste can be said carbon negative. Majority of PHA producers are using primary feedstock such as Canola oil, sugar roots and corn starch. Carbon neutrality/negativity of the overall PHA cycle is key question on the sustainability claims of various PHA manufacturers.
Global PHA Demand By Region - 2022 (Kilo Tons)
Polyhydroxyalkanoates Market, by Region
North America was the largest market for PHA in 2022 accounting for over 40% of global PHA market. The region will remain the largest market throughout the forecast period. Western Europe accounted for around 30% of market share in 2022. PHA demand in Asia Pacific is estimated to grow at a CAGR of 26% on the back of strong demand from end use industries in China, India and Japan. Currently the region is the third largest market for PHA after North America and Western Europe, however owing to fast growing PHA demand from China, Japan, and India the region is estimated to overtake Western Europe as second largest market during the forecast period. Middle East & Africa, Central & South America, and Central & Eastern Europe combined accounted for remaining share of the global PHA demand.
In 2022, Germany was the largest PHA market in the Western Europe accounting for more than 20% of the total regional PHA demand . The PHA demand in Germany is projected to grow at a CAGR of 22% during forecast period. Italy was the second largest PHA market after Germany accounting for more than 18% in 2022. After the shutdown of Bio-On in 2019, Biomer is the only PHA producer in the Western Europe. However, the company has small production capacity and cannot fulfil the entire demand of Western Europe. Most of the regional demand is met through the imports from USA and China. This scenario is likely to change during short term forecast as PHA plants of Nafigate Corporation in Czech Republic and TAIF in Russia will start their production before 2025 and is is estimated to export PHA to Western Europe.
Global PHA Demand By Application - 2022 (Kilo Tons)
In 2022, global PHA capacity was estimated to be more than 65 kilo tons. Major PHA players such as Danimer Scientific, Newlight Technologies, RWDC industries have announced their capacity expansions. The global capacity is projected to cross 550 kilo tons in the coming years. Currently Danimer Scientific is the largest producer of PHA in the world, with its PHA production facilities at Bainbridge and Winchester. The company has started expansion of both of its facilities, the total capacity of the company will reach 144 kilo tons by the end of 2024. Newlight Technologies also started their commercial PHA production facility in September 2020. The facility has annual production capacity of 23 kilo tons. Other major producers are RWDC industries, Ecomann technologies, CJ CheilJadang, Tainjin GreenBio and Kaneka.
Global PHA Demand By Application - 2016-2032 (Kilo Tons)
Polyhydroxyalkanoates Market, by Application
In 2022, Packaging application was estimated to be a largest market for PHA accounting for over 40% of global PHA demand. Various companies such PepsiCo, Nestle, IKEA, and Bacardi have signed agreements with major PHA manufacturers like Danimer and Newlight for production, commercialization, and purchase of PHA for packaging applications. All these conglomerates are large scale consumers of plastic packaging. Increasing demand for sustainable packaging solutions from major conglomerates is key driver for PHA in the forecast period. Consumer Goods was the second largest application of PHA accounting for almost 30% of the global market in 2022 and is projected to cross 70 kilo tons by 2032 growing at a CAGR of 17% during forecast period. The consumer goods demand is driven by growing consumer awareness in Western European countries and North America.
Price is another key factor in adoption of PHA. At present the prices of PHA are around 2.5 to 3 times higher than conventional plastics. The major contributors to the cost are working capital, raw material cost and smaller scales of production. In a survey conducted by Prismane Consulting on Global Bio-Plastics Market, more than 50% of the respondents agreed that Price is the key factor for the end users of PHA.
PHA is indeed a more ‘environmentally friendly’ solution than conventional plastics, however the difficulties in the scale up and Price reduction are major restrains for the PHA. The growth of the market is mostly due to sustainability targets of various conglomerates, regulations on conventional plastics and to some extent environmental awareness in consumers. At present PHA cannot compete with conventional bioplastics on economic grounds. However, in the long term as price reduces and the environmental regulations become more stringent, PHA will capture more market of PE and PP particularly in Food packaging and Consumer goods applications.
Recent Developments in PHA Market
In May 2023, TotalEnergies signed a MoU with China based PHA producer - Bluepha to expand the adoption of PLA and PHA based products in China. Under the agreement, TotalEnergies and Bluepha will promote and facilitate the use of their PLA and PHA technologies in various market applications within China
Kaneka is the only producer of PHA in Japan. It recently invested JPY 15 bn (around EUR 126 million) to expand production of PHA at its site in Taksago, Japan by 5 kilo tons. The expansion is scheduled to be completed by the early 2024 and will lift company’s capacity to 20 kilo tons of PHA annually. Kaneka markets its PHA under brand name ANOILEX. It has focused on production of PHA suitable for packaging films and agricultural mulch films.
Newlight Technologies has also signed an agreement with various textile, packaging, and consumer goods companies. Nike has signed an off-take agreement with Newlight to purchase PHA for their apparels business. Furniture & packaging company IKEA had signed an agreement with Newlight in 2016. According to the agreement IKEA will purchase 50% of the PHA from Newlight’s 23 kilo ton plant in California. IKEA targets to be a ‘Carbon Negative’ company before 2030 and hence moving towards sustainable solutions such as PHA. Newlight has also signed various agreements with consumer goods companies such as The Body Shop and major electronic producers such as Dell and Hewlett-Packard (HP).
In March 2017, RWDC Industries entered a long-term R&D agreement with the University of Georgia for development of its Solon PHA. In 2019 the company successfully manufactured PHA based straws. In 2020, RWDC raised USD 133 million in its series B funding round which would be used in expansion of its Athens facility.
In 2016, CJ CheilJedang acquired assets of Metabolix (including IP rights). The company commissioned its first PHA plant in Pasuruan, Indonesia. The plant stated commercial operation in second half of 2022 and with production capacity of 5 kilo tons. The plant will use Palm Oil as feedstock for PHA production. CJ Bio (a division of South Korea- based CJ CheilJedang) is a sole producer of a amorphous PHA, it is a softer, and more rubbery version of the PHAs
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