Bioplastics Investment Shows Long Term Strategy

Source: MultiBrief – Rapidly expanding bioplastics production capacity trends
Bioplastics and biobased products have been developing and maturing for decades, and have collectively been developed and commercialized in numerous examples. This has showcased the viability of biobased products as suitable replacements for traditional, long-developed petroleum-based products. This work has allowed customers to free themselves from dependency on oil, and allow them flexibility from the high costs of petroleum.

The problem one would consider is obvious; what about now, when oil is actually really cheap?

As pointed out by Donald Rosato in a recently published SPE article, the luxury of low oil prices today comes with the extreme risk and long term volatility of the oil market. Consider:

“Inflation-adjusted oil prices reached an all-time low in 1998 at $17.10 per barrel $mdash; lower than the price in 1946. And then just 10 years later, oil prices were at the all-time high for crude oil at $135.04 per barrel”

Low prices for polyethylene and polypropylene are great elements for North American plastics. There is reason for optimism in the short and medium terms, as fracking and shale operations have opened pipelines which should afford ample raw materials for the foreseeable future. What we do NOT know is what type of legislation, political swings, global demands, or technology developments will affect this surety of supply and bull market for feedstocks.

Based on this hesitancy, it is a great relief to see major players in the Plastics Industry thinking long-term on the development of biobased materials as an emerging technology solution, and not simply a trend. Major investments in biobased PET and inherently biobased PLA production will lead the way, but there are certainly more materials to follow in this logical evolution of the plastics industry.