Page 191 - CW E-Magazine (11-6-2024)

Special Report Special Report

In 2020, China announced the new Key Findings 1: Robust confi dence dustry has formed a complete value versus food. Food security is a top prio-
3 goal: to achieve its peak carbon di- among Chinese entrepreneurs in chain, enabling innovative bio-based rity for the Chinese government, leading
oxide emissions before 2030 and attain business growth startups to fi nd partners for industria- to policy adjustments that prioritize grain
2.5 2 carbon neutrality by 2060, commonly Chinese companies confi rmed our potential of the domestic market serves aging the bio-based industry to explore
Our in-depth interviews with eight lizing their products. Thirdly, the vast for food and feed purposes while encour-
Production capacity (million tonnes) 1.5 1 PET rent projection shows that China’s CO initial estimations and desk-research as a signifi cant driver for the bio-based alternative biomass feedstocks. However,
termed as the “dual carbon goals.” Cur-
2
emissions is likely to enter a structural
observations, revealing a thriving industry. Projections indicate that the some critical questions arise: How sus-
PEF
demand for bio-based plastics in China tainable is the industry’s reliance on cur-
decline in 2024.
bio-based industry in China. Entrepre-
PHA
PLA
challenges are involved in transitioning to
expanding their businesses, with many
0.5 PTT In addition, the Chinese petro- neurs expressed strong confi dence in will surge to 2.53-mt by 2026. rent feedstocks like corn or wheat? What
PA chemical industry heavily relies on highlighting the current opportune Moreover, China boasts a rela- non-food biomass feedstocks?
2019 2020 2021 2022 2023 2024 2025 2026 imported oil. Projections indicate moment for business development. tively strong and active funding
the average external dependence bet- system, particularly in private eq- Another unique challenge in China
Fig. 1: Bio-based plastics production capacity in China (Tonnes), 2019-2026. ween 2020 and 2030 will reach 76%, Key Findings 2: Primary market uity (PE) and venture capital (VC). is policy-driven structural overcapa-
Structural overcapacity in bio- (mainly fossil-based) stands at 1.5- imposing the pressing need for the drivers of the Chinese bio-based Although overall transactions in this city, which is particularly prominent in
degradable plastics market mtpa, while the actual production is Chinese government to take strategic plastics industry sector weakened after 2020 due to the biodegradable market. To mitigate
Government policy has a signi- only 260,000-tonnes. Further, the action. The Chinese petrochemical in- Firstly, Government incentive poli- the broader economic downturn in these risks, some companies are plan-
fi cant impact on the biodegradable combined production capacity of dustry has embarked on a signifi cant cies play a crucial role. The Chinese China, PE and VC remain active in ning on expanding into international
plastics market in China, which PLA and PBAT is projected to reach transition towards a more sustainable government views the bio-based in- emerging and strategic industries markets, some are focusing on enhanc-
has been experiencing overcapacity. 3.6-mtpa by 2025, refl ecting an ave- model. dustry as potentially supporting its such as 5G, green energy, and the ing their core technological competi-
Since 2020, the Chinese government rage CAGR of 65%, however, the ‘dual-carbon’ plan, which has resulted bio-based industry. tiveness, while more companies have
has introduced a series of policies to market size is expected to increase to Key Policies Infl uencing Bio-Based in the implementation of various opted to halt investment projects in res-
boost the biodegradable plastics mar- only 2.5-mt by 2025. This suggests and Biodegradable Plastics Industries incentive policies and regulations in Key Findings 3: Potential risks facing ponse to these challenges.
ket, providing substantial resources an overcapacity situation in the bio- This report elucidates the latest recent years. the Chinese bio-based plastics industry
and incentives to companies. Ad- degradable plastics market. policy in China since 2021. One of There are potential risks and un- [The full report can be found here:
ditionally, private equity fi rms have the key policies unveiled in 2021 Secondly, the presence of the exis- certainties in this industry. One of main https://renewable-carbon.eu/publications/
followed the policy trend by invest- Chinese context: “Dual carbon goal” was the 14th Five-Year-Plan for the ting chemical industry is signifi cant. challenges in China is the concern about product/bio-based-and-biodegradable-plas-
ing in this sector. These factors have aligns with transformational policies Development of the Bioeconomy, China’s well-established chemical in- competition for biomass used for industry tics-industries-in-china-pdf/]
contributed to industry growth, but The Chinese government aims to which marked a significant mile-
have also led to structural overcapa- promote the bio-based industry for two stone in China’s national bioeco-
city as companies expand their unused reasons. First, the government is com- nomy strategy. This plan prioritizes Chemical Weekly | Import-Export Data
capacity without concern for fi nancial mitted to the carbon reduction goals innovation-driven development as
losses. outlined in the Paris Agreement. Sec- its core principle and aims to estab- Market Surveys | Directories
ond, it seeks to reduce its dependence lish a national biotechnology strategic
In 2023, annual combined pro- on oil resources for national security force. Business Forums | Expositions
duction capacity of PLA and PBAT reasons.
Following this strategy, the Chinese The only organisation in India catering exclusively to the needs of the entire chemical industry
government has implemented an
4,000,000 array of policies and regulations to Contact:
Production capacity (tonnes) 3,000,000 PLA and biodegradable materials and SEVAK PUBLICATIONS PVT. LTD.
promote the development of bio-based

chemicals, including the Three-Year
Action Plan to Accelerate the Innova-
2,000,000
602-B, Godrej Coliseum, K.J. Somaiya Hospital Road,
tive Development of Non-Food Bio-
based Materials issued in 2023. This
Behind Everard Nagar, Sion (E),
PBAT
1,000,000
notable policy aims to make non-food
Mumbai 400 022.
bio-based products competitive with
fossil-based products by 2050. The Phone: +91-22-24044471 / 72
2021 2022 2023 2024 2025
plan could have a profound impact
Fig. 2: Biodegradable plastics (PLA and PBAT) production capacity in China on the future of the bio-based Email: admin@chemicalweekly.com
(tonnes per annum). industry.
190 Chemical Weekly June 11, 2024 Chemical Weekly June 11, 2024 191

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