China desires to be simply as massive in bioplastics as it’s in solar modules – Nikkei Asia

| |

TOKYO – Chinese materials makers plan to dramatically increase their production of biodegradable plastics made from plants in response to China's ban on the disposal of plastic bags.

Only one company, the China BBCA Group, wants to expand its capacity for the production of the plastic to a level that far exceeds global demand.

The magnitude of these plans confirms the magnitude of the plastic waste problem in China. But it also raises concerns among competitors of a China-driven supply glut, such as that seen in solar cells and wind turbines.

“We want to show our answer to white pollution,” said BBCA President Li Rongjie under the heading of “plastic waste”.

BBCA, a supplier of lactic acids for food additives, started up a plant in August that can produce 50,000 tons of polylactic acid (PLA) polymers annually. Later in December, the groundbreaking ceremony took place in another facility. The group plans to reach the capacity to produce 700,000 tons of PLA annually by 2023.

In the same year, the global PLA market will grow to 370,000 tons, according to the Fuji Chimera Research Institute in Tokyo, after less than 200,000 tons in 2019.

PLA, a biodegradable compound made from corn and other plants, has a wide range of uses, including as nonwoven masks, clothing, and drinking straws. Nearly 10 other Chinese companies besides BBCA plan to increase their PLA capacity, a survey by China's Huaan Securities shows in July.

The China BBCA Group made prototypes of masks, mugs and clothing from a biodegradable plastic. (Photo by Shuhei Yamada)

Similar activity can be observed with other biodegradable plastics. About 15 companies plan to increase production of polybutylene adipate terephthalate, a petroleum-based compound also known as PBAT, according to Huaan.

According to interviews with the Tokyo-based BBCA partner HighChem, major Chinese manufacturers plan to increase the annual production of PBAT and polybutylene succinate (PBS) by a total of 1.24 million tons. This is 4.8 times its capacity in June 2020.

This trend dates back to January last year when the National Development and Reform Commission, China's top economic planning agency, announced a policy to limit the use of non-biodegradable plastic.

In China, 40% of used plastics end up in landfills or as garbage. The country is estimated to make up a quarter of the world's plastic waste that pollutes the oceans.

The Chinese public has complained heavily about the inadequate disposal of plastic waste, to the point where both the state and the Communist Party have been forced to react. The draft five-year plan presented by the party in November, setting out the main economic and political goals up to 2025, contained a provision to “strengthen the control of white pollution”.

The establishment of a biodegradable plastic production also corresponds to the goals of the local government. The city of Bengbu, where the BBCA is headquartered, and the surrounding province of Anhui provide financial subsidies and tax incentives to the company and support PLA business meetings.

Shopping bags and pellets made from PBAT. (Photo by Shuhei Yamada)

HighChem, a materials trading company, sees great potential for PBAT and recently signed a contract with a separate Chinese manufacturer to import and sell films for agricultural use.

If the production of biodegradable plastic in China continues to grow, “the cost of using it in environmental products will decrease,” said Ushio Taka, president of HighChem.

China's current demand for non-biodegradable plastic for applications like bags is estimated at millions of tons. The change in government policy could lead to a shift towards plastics, which would naturally collapse and continue to expand the market. In this scenario, a supply glut would not occur immediately.

But when Beijing passes such decrees, local governments tend to dangle incentives to increase production, and companies respond to the call in anticipation of subsidies and profits. This was the pattern previously seen in solar cells, wind turbines, and LCD screens. By increasing production, profitability is not taken into account, which leads to oversupply and global price drops.

In Japan, the government and chemical manufacturers are not as active in biodegradable plastics as their Chinese counterparts, but are focusing on biomass plastics. These consist of non-biodegradable plant material that can be burned to generate energy. The aim is to produce 2 million tons of all bioplastics annually by 2030.

However, the ability of Japanese suppliers to achieve this goal remains limited. Mitsubishi Chemical's joint venture with the Thai oil company PTT has a capacity of only 20,000 tons of biodegradable plastics per year. Another supplier, Kaneka, has an annual capacity of only 5,000 tons.

There are plans to increase capacity, but “the concern is that if we competed directly with the Chinese in investments, we would lose,” said a representative from Mitsubishi Chemical.

Despite the growing scope among Chinese competitors, German BASF sees China as a promising market in which demand will grow. The company is partnering with a local manufacturer to position itself for a larger market and license Red Avenue New Materials to manufacture and sell PBAT. Red Avenue is building a new facility that will be operational in 2022 with an annual capacity of 60,000 tons.

Previous

Sunnova expands solar and storage choices to the DC market

Market insights, tendencies and big enterprise alternatives for solar inverters 2021 to 2025 | ABB, Delta Vitality Methods, Enphase Vitality, Darfon Electronics and GE Energy – The Courier

Next