The global economy in 2020 was severely affected by the COVID-19 pandemic due to lockdowns and restrictions on cross-border movements, subsequently causing supply chain disruptions. All economic activities throughout value chains came to a halt as various governments worldwide implemented nationwide lockdowns. These restrictions and lockdowns were gradually relaxed, and economic activities resumed. However, the bioplastic industry was significantly impacted by the COVID-19 pandemic.
The low production volumes for bioplastics due to the closure of manufacturing facilities, disruptions in supply chains, and shortage of raw materials resulted in the increased usage of fossil fuel plastics. Also, virgin plastic became cheaper due to a decline in oil prices in 2020, negatively impacting the demand for bioplastics.
In addition, before the outbreak of the COVID-19 pandemic, policy and regulatory actions were in the process of enforcement for reducing the usage of single-use plastic, increasing recycling, and developing bio-alternatives to petroleum-based materials. However, during the pandemic, all these actions were halted due to a shift in focus for public health. Also, the COVID-19 crisis delayed green investments, which further impacted the research and development-related activities of bioplastics development. Bioplastics manufacturers thus felt the impacts of the COVID-19 pandemic in multiple dimensions.
As the effects of the COVID-19 pandemic slows down with the resumption of logistics and production facilities, bioplastics companies are likely to witness potential growth opportunities in the coming months. The normal production of bioplastics started as the demand for the products slowly increased as a waste management solution to avoid the utilization of single-use plastics.
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In addition, people will now be able to carry out awareness drives and seminars due to the relaxation of strict social distancing norms, which is expected to change people's behavior regarding the use of bioplastics and avoid single-use plastics. Hence, media coverage and public awareness campaigns are expected to increase the demand for bioplastics.
There are many new initiatives to promote a green recovery, which are expected to accelerate the production of bioplastics. For instance, the European Union is working towards the 2050 net-zero emissions goal. This initiative was aimed at tackling the ever-growing environmental and sustainability crisis by implementing the European Green Deal. Hence, these initiatives will strongly impact the adoption of bioplastics to lessen environmental risks related to plastic waste. Also, the demand for single-use plastic is prevalent in the packaging industry, which witnessed a surge during the pandemic leading to plastic waste. Governments and industry organizations are influencing the transition with standards or regulations either encouraging or mandating the use of biobased products.
Furthermore, investments in these technologies are expected to lead to the creation of new jobs globally and the development of advanced products. Private and public sectors are expected to allocate more funds to accelerate the adoption of bioplastics as people become more aware of the growing plastic waste and its impacts on the environment. Therefore, the demand for bioplastics is expected to rise once the pandemic subsides.
Thus, the COVID-19 positively impacted the bioplastics market, which is expected to drive market growth. According to Meticulous Research®, this market is expected to grow at a CAGR of 13.1% to reach USD 25.93 billion by 2029.