The global bioplastics market is booming – total production capacity is set to grow 400% by 2017, and the European Commission has designated bioplastics as a lead market. The Korean bio-industry is also growing, with production valued at 7.12 trillion won (around US$6.9 billion) in 2012, and the Ministry of Trade, Industry and Energy announcing in April 2014 that around 215 billion won (over US$200 million) will be invested into the bio-chemicals industry over the next 5 years. Despite this growth in the bio-industry, the Korean market for bioplastics remains small, and internationally accessible information hard to find. In April and May 2014, Latitude talked to a number of key players in the industry to find out more about the market for bioplastics in Korea.
It is hard to imagine, driving through the rice fields and foothills of Moga-myeon, a little town near Icheon, that just down the road thousands of biodegradable plastic sheets are being pumped out every day. Green Chemical Ltd. constructed their plant in 2006 and started producing plastic sheets made from 100% biodegradable PLA. These PLA sheets are now used in items like food containers, and sold at chain supermarkets and department stores. Green Chemical imports 100 tonnes of raw PLA material every month, and is looking forward to growth in the biodegradable waste bag and soil cover markets. While they have found success, Deputy General Manager Hwang Dae-youn claims that the market for PLA is only about 200 tonnes per month, still much less than 1% of the total plastic market in Korea. On the other hand, the market for PET is 100 times larger at around 20,000 tonnes per month. It is easy to see why companies are sceptical about this new industry.
Long established R&D tradition in biomaterials
However, Korea has an established history of R&D into the biomaterials industry. To help grow the bioplastics market, the Korea Biodegradable Plastics Association (KBPA) was established in 1999. The scope of the association was expanded in 2008 to cover (partly) biobased polymers in addition to fully biodegradable polymers, and is now called the Korean Bioplastics Association. KBPA Chairperson, Prof. Chin In-Joo claims that Korean companies have been investing in bioplastics since 1993. Prof. Chin believes companies in Korea have developed the materials and have done the research, but the “balance is not yet right,” and getting the message out about bioplastics has proved to be a difficult task.
The general consensus is that government regulations have not been kind to the bioplastics industry. Hwang Dae Youn would like government regulations to change to help grow the industry; “antipathy” is plaguing the industry, he claims. Currently, the standards in Korea are so few that many organisations are ignoring bioplastic or believe it has no future. Even when former President Lee Myung Bak invested heavily into ‘green’ industries, and ‘green growth,’ “bioplastics did not really benefit” according to Prof. Chin In-Joo.
J.J. Hwang, a senior research engineer at SK Chemicals, claims that current government policy “is from 20 years ago,” and “is an obstacle to the growth of the bio-industry…it is preventing a boom in the bio industry.” SK Chemicals has invested into both fully biodegradable plastics, and other partly bio-based plastics, but because of the market situation it has been difficult to get these products into mainstream use.
An adequate policy framework is needed
There are also claims that the bioplastics market has remained small because of a focus only on biodegradable plastics. Korea Biomaterial Packaging Association Chairperson, Prof. You Young-sun believes that due to a lack of usability and durability “biodegradable plastic has too many weaknesses” to be a viable option at the moment. J.J. Hwang recommends that, for now, we have to forget about the biodegradability of plastic and instead focus on an “exodus from petroleum,” going on to state that “biodegradable material is just one of many materials in this industry.” J.J. Hwang laments the fact that only fully biodegradable plastics are excluded from charges under Korea’s Extended Producer Responsibility (EPR) system. He believes that products listed under the EPR need a bio-contents policy, where charges are cut depending on how much biodegradable material is used. With a bio-contents policy manufacturers could make products that are bio-based but still cost effective and multi-use. In this way, use of PLA and biobased products would become more popular, and the proportion of biomass content used could gradually be increased as bioplastic products become normalized and prices fall.
Jang Seok-chan, Head Office Administration Manager at the newly formed Korea Packaging Recycling Cooperative, gave Latitude an in-depth overview of the EPR and Korea’s recycling system. To summarise, the EPR system is effective in many respects, and has worked well at increasing the recycling rate. For this reason Korea’s EPR system has been rightly praised by many. But there appear to be many loopholes where the policy could be abused. A focus on passing on responsibility to someone else along the chain, whilst doing just enough to pass a certain quota, has meant that no party really has any reason to advance the system or make it more eco-friendly. Korea’s Ministry of Environment has even acknowledged this issue, stating “there have been insufficient efforts deployed in adding higher value to the recycling industry.”
Currently, the bioplastics market is too small for fully biodegradable plastic to be recycled in the main stream, and thus waste PLA is collected and incinerated. Therefore, if one wants to recycle bioplastics, one must increase the quantity of the product used. Prof. Chin In-Joo echoed this point, claiming that “plastic made from 100% PLA can be collected and recycled…[however] quantity is important.” Prof. Chin went on to state that composting could be an even better solution, both environmentally and economically, but that Korea needs to invest in proper composting infrastructure. Either way, facilities for recycling and composting are lacking. There is space for new technological solutions that can upgrade Korea’s recycling facilities and help to efficiently recycle or compost more types of plastic material. Currently, according to Prof. Chin, of all plastic waste, only PET plastic is recycled, and even that is incinerated if it has been in contact with food.
Ultimately, trying to boost the bioplastics industry by pushing for a change in government regulations has proved fruitless up to this point. Therefore, the most likely way forward, in terms of boosting the industry, is to grow the market. Companies like Green Chemical Ltd., whose sales are growing, have proved that there is a market for bioplastics, if you have clear goals, a narrow focus, are willing to collaborate locally and internationally, and have a well-developed promotional campaign.
Given the knowledge and technology that so many companies and associations in Korea have, the potential for expansion of the bioplastics industry is high. However, investment in research and material production alone has proved lacking in terms of outcome. Now, if the bioplastics market is to grow without a change to government regulations, then manufacturers need to stand up and start producing and promoting bioplastic products.
For a copy of the full report, please contact Latitude.
Written by Thomas Vink, Latitude Ltd. – South Korea
