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Plastics from Food Waste

The Blue Economy

Plastics from Food Waste

Plastics from Food Waste

Plastics from Food Waste


The Market

The world market for biodegradable plastics will enjoy double digit expansion between now and 2015 to about $6 billion. If present trends continue this figure will double again to an estimated $12 billion by 2025. While at present 65 percent of all bioplastics are produced to serve the packaging of food and beverages, it is expected that by 2025 already a quarter of the market will focus on the higher margin application in the automotive and electronics segment. The bio-plastics industry has even targeted medicine as one of the core market niches with profit margins that are expected to be up to ten times the margin commanded today for plastic cups and utensils. The European Bioplastics trade group expects that their production capacity will more than triple between 2007 and 2011 to 1.5 million tons. It is expected that by 2025 some 15 to 20 percent of petroleum used for plastics will be diverted to sources of plant, algae and bacteria-based origin. An analysis of the world’s production of bioplastics indicates that there are approximately 500 production and processing companies. Since the business is characterized by high growth and multiple innovations, it is a major magnet for entrepreneurs and investors. This is the underpinning logic behind the fact that the number of bioplastics-based companies is expected to increase tenfold to 5,000 over the next decade. The Helmut Kaiser Consultancy firm points out that less than 3 percent of all plastic waste gets recycled worldwide, compared to 30 percent for paper and 35 percent for metals. Numerous attempts to convert waste plastics into bags and clothing have received wide media attention, but failed to make a dent in the mountains of plastics or reduce the accumulation of plastics into artificial islands of garbage that desecrate the oceans. By Gunter Pauli Biodegradable plastics is gaining in popularity among a growing number of consumers who are eager to shift their purchasing power towards green solutions. In the mean time, bioplastics are increasingly competing with agricultural land that otherwise would be used for growing food. Corn, the main produce from which bioplastics are made, competes with tortillas in Mexico and corn flakes in Japan. The increase in demand and the subsequent increase in prices makes this basic food more expensive. The complexity of the situation compelled the United Nations to warn policy makers and industry leaders that the drive towards green plastics could affect food security. In a world where over one billion people go to bed hungry each night, the choice between saving petroleum and providing a meal a day requires a rethinking of our business models. In addition, a cup made from bioplastics behaves no differently from one made from fossil fuel. Once trapped in a landfill where it is deprived of air and heat, it simply will not degrade.

The Innovation

The sourcing of the raw material for plastics has forced scientists and business developers to rethink the strategy forward. NatureWorks, the American-Japanese joint venture between Cargill and Teijin continues to work with corn as the main source of starch which is the raw material for bioplastics. This has generated the debate about the use of genetically modified corn, which now dominates the US-market, and is rapidly penetrating the European market as demonstrated by the recent announcement that NatureWorks is doubling its output on the Old Continent to 140.000 tons per year. The debate goes beyond genetics. It also centers on the need for fertilizers and herbicides which are needed more for corn than soy. Professor Yoshihito Shirai from the Institute of Life Sciences at the Kyushu Institute of Technology (KIT) in Japan opted for a simple but rather innovative solution. He observed how restaurants in Japan discard vast amounts of food. As the stress on the local landfill increases, and the desire to reduce carbon emissions became more pronounced, Prof. Shirai combined all the available know-how and with the assistance of his colleagues and students designed a production unit for poly-lactic acid (PLA) where the base is raw material in the form of starch from food waste. While the content is lower in starch than corn, its financial model is convincing, and the benefits to the environment outperforms any other bioplastic, especially PLA produced from corn.

 

The First Cash Flow

The City of Kita-Kyushu early embarked on a composting program to reduce the stress on the landfill. Japan, an island with little livable space charges one of the highest tipping fees in the world. Diverting restaurant food waste from the landfill generates a first cash flow: restaurants continue to pay for waste collection, however the cash is now collected by the plastic producer who actually gets paid to take the waste. Thus instead of having to source a GMO corn, heavily irrigated depleting the aquifers, Prof. Shirai established the first factory in cooperation with the environmental company EBARA, which is committed to achieve the goal of zero waste and zero emissions. It is also the largest pump maker in Japan. The volume of production is minor compared to the 100,000 ton production units the bioplastics industry operates. This implies that Prof. Shirai could not economically use the standard process technologies. Instead he opted for a simple fermentation process that generates the PLA overnight, through a batch process. While the conversion rates are much lower than corn, the energy cost in transport and transformation is a fraction of the standard on the market, while its size can be tailored to the local landfill.

 

The Opportunity

Prof. Shirai and KIT did not have the ambition to build a new industry, their main purpose was to demonstrate the technical and commercial viability of small scale processing of food waste into PLA-type plastics. Even at a rate of one ton per day, the process is commercially viable simply because the sales price for plastic bags, used for garbage collection is ten times the cost of their raw material – petroleum. This type of a profit margin is always bound to attract new players on the market. In this case, fossil fuel-based bags are substituted with polymers manufactured from food waste, that never competes with food for people, while eliminating methane emissions from decomposing food that lengthens the economic life of the landfill. It certainly is a business model that can be implemented by entrepreneurs around the world.

Gunter has published 20 books (written 16 - edited 4), which have been printed in +30 languages and 365 fables bringing science and emotions to children. Over 17 million copies have been distributed worldwide. One of his fables “The Strongest Tree” is available in over 100 languages. His latest book published in April 2015 "The Blue Economy 2.0: 200 projects implemented, $4 billion invested and 3 million jobs created" is the new reality inspired the vision of his Report to the Club of Rome presented on November 2, 2009.

www.gunterpauli.com

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