SUSTAINABLE MANUFACTURING
mainly because of their better quality products and premiumpricing strategy.
None of the foreign bio-plastics suppliers
currently active in China are in the PHA segment. In 2016, the PHA segment experienced relatively faster growth rates and is highly concentrated with three dominant suppliers, all being Chinese companies. Foreign companies are relativelymore active in the PLA and PBS segments where their competitive advantages lie. PLA and PBS require product modifications tomake up for their performance deficiencies and thismodification expertise ismore common among the foreign players. Beyond China,much of the global capacity for
biodegradable plastics bags, and bio-plastics in general, lies in China and with Chinese firms. In the initial stages of China’s bio-plastics sector development,most of this capacity is exported to Western countries that have greater demand for these products. This was when the environmental awareness and efforts were relatively stronger elsewhere in the world than in China. According to a study by GCiS China Strategic
Research, the production capacity of biodegradable plastics had grown to at least 600,000 tonnes by the end of 2016 andmuch of this is concentrated in the eastern coastal regions like Guangdong and Jiangsu province. At least 75million tonnes of traditional non-
biodegradable plasticsmanufacturing capacity still remained in China by 2016.With biodegradable plastics production capacity at less than 1 per cent of traditional plastics, bio-plastics still has a long way to go – at least froma pessimistic viewpoint. On the brighter side, bio-plastics seemto have immense market potential. The largest downstreamusage of biodegradable
plastics in China is disposable plastic bags, followed closely by packaging and then tableware. Together the top three applications accounted for 81 per cent
16 /// Environmental Engineering /// October 2017
of themarket revenues. The application inmedical supply and agriculture & forestry each takes up 7 per cent of the total revenues. In recent years, demand fromdownstreamindustries is drivenmainly by government regulations like the Plastic Limit Order and No Plastics Order. But the downstream adoption of biodegradable plastics has been slow and reluctant. At themoment, downstreamadoption of
biodegradable plastics ismainly taken up by larger downstreamusers likeWalmart or Ikea.With an average price of at least two to three times higher than traditional plastics, it is an uphill battle to willingly use biodegradable
options.Many smaller downstreamusers in Jilin continue using traditional plastics and risk being fined while somemay even resort to using fake biodegradable plastics bags! These and traditional plastics are still easily available fromneighbouring provinces like Liaoning, or even further South fromHebei and Anhui where regulatory standards are not as strict. Even if Jilin canmaintain a strict No Plastic Ban order within the province, it would be difficult to stemthe flow of non-biodegradable plastics frombeyond its province. Unlike areas like the phasing out ofHCFC where
there are clear phase out targets, there are no such performance targets when it comes to the biodegradable plastics sector. In fact, apart fromthe guidance document issued by the State Council in 2008, the No Plastics order implemented by Jilin and Jiangsu is an administrative order rather than a statutory order. If China continues to experience lower economic growth rates in the longer run, the policymakersmight have to bemore selective in terms of which industries or sectors to support. And when that happens, will the bio-plastics sector continue to receive asmuch support or will it quietly recede and fall off the radar likemany of China’s other industrial policy experiments? EE
Pie charts show China’s bio-plastics revenues by application, above left, and its revenues by product, above
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