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Biobased plastics drive interest in China, but face hurdles

By: Rebecca Kanthor
PLASTICS NEWS CORRESPONDENT

July 3, 2014

SHANGHAI — While biobased plastics account for less than 1 percent of the plastics resin sector, the 20 percent annual growth rate has some industry folk are abuzz.

At the China International Biobased Technology and Partnering Conference, held in Shanghai, speakers and participants expressed optimism about the industry’s future, while acknowledging they face major challenges.

Industry leader Natureworks LLC said demand is growing because bioplastics offers a greater value proposition to consumers than traditional plastics.

“Consumers are really asking brands and retailers to make a difference,” NatureWorks Asia Pacific commercial director Richard Weber said. “People want to see people make steps in the right direction. Major brands are taking steps and using biopolymers in the different programs to reduce the amount of plastics that they use.”

He added in an interview with Plastics News that the shale gas boom has become an unlikely boost to the biobased materials industry.

“We’re seeing heavier bottom of the [naphtha] cracker products get a little more expensive due to the shale revolution,” he said.

 Certification companies are noting an increase in interest from Asian countries.

“In 2010 I remember I suddenly noticed certainly for bio-based materials there is a lot of Chinese companies that are now starting to receive the certificate. Now we have about 30 Chinese companies that have certificates,” said Petra Michiels, contract manager for French certification company Vincotte. She added that they are also noting an increase in clients from Thailand, India, Taiwan and Japan.

 Even with the growing interest, polylactic acid materials are not yet visible enough in China, said conference exhibitor Hangzhou Seemore New Material Technology Co. Ltd.

“Right now, we spend a lot of time explaining our products to potential clients. A lot of clients don’t know what PLA is,” said R&D engineer Steven Zhou.

 And there are some very real barriers for Asian companies that manufacture biomaterials. Weber and other speakers emphasized that feedstock prices were a major challenge.

“From the investor’s standpoint, the key thing that all bioplastics companies look at is what is the cost of the feedstock,” he said.

 Feedstocks in China can be up to double the price of feedstocks in the United States, he said.

“The Chinese government is looking for potential investment here in China and I think this is something that has to be addressed. The price of corn here in China is roughly double that of the U.S. and [China] also have significantly higher sugar prices than world prices,” he said.

 Chinese polyhydroxyalkanoate (PHA) producer Ecomann Biotechnology Co.’s managing director Luke Zhong agreed. “In China, the price is the big challenge. The price of sugar and corn are higher than the international market. We have no choice, [so] we just buy sugar and corn in China. Hopefully we can influence the government and we can directly import sugar from outside. Currently we can’t do that. Even if we import, we have to add the tax, and there’s no advantage.”

He added that the company hopes to one day be able to use sugarcane and other agricultural waste as a feedstock, but they do not have the financial resources yet to do so.

Seemore’s Zhou said Chinese companies have to use lactide as a feedstock because they don’t have the technology to convert lactic acid to lactide.

“The positive is that more and more companies are beginning to join the field of bio-based plastics. For example COFCO Group is preparing to build 20,000 tons capacity PLA polymerization plant in Jilin, and is actively supporting the application to build industrial park,” he said.

He added that Zhejiang Hisun is also considering a major expansion of their capacity from 3,000 tons to 40,000 tons in the next few years. This could bring down PLA prices significantly, he said.

 Government policies could be crucial in the future of this industry. NatureWorks’ Weber spent a good deal of his speech discussing how governments could support the bioplastic sector.

He added that plastic bans, like next year’s planned one in China’s Jilin province, are showing to have limited effect. “What hasn’t worked as well is outright bans. This has caused a negative backlash,” he said, citing Italy’s ban. “They feel they are forced to do something. This has kept the demand for bioplastics down.”

Speakers were optimistic about bioplastics adoption in Asia. Weber said Taiwan and South Korea are excellent models of how governmental policies can support and push bioplastics growth.

“If governments can try the two-pronged approach: create the longer term demand through reduction and then economic incentives for the supply chain through taxes, it can be a very beneficial way to spur bioplastics demand.”