What is the Difference Between Bioplastics and Bio-Based Additives?
Oil Markets, Market Regulation and Public Policy in the Plastics Industry
The story starts with petroleum and the number of markets that rely on it. Politicians today are fighting over oil regulations, but many of them don’t realize all the downstream effects that their legislation creates. When oil supplies are low, there is fallout across the plastics industry. Right now, plastic prices are shooting through the roof, and companies are claiming force majeure.
Today, this is creating a bottleneck in American manufacturing. The manufacturers of the products we use every day rely on plastic as one of the key raw materials that allow them to produce goods and make money.
Petroleum problems in America quickly become plastic problems because all of the plastic we are familiar with today is petroleum-based. But, what most people don’t know is that the original polymers and plastics were not petroleum-based.
The word “plastic” comes from the Greek word “plastikos,” which means “to grow” or “to form.” It was originally used as an adjective meaning “formative” (or capable of being deformed without rupture). Even the Greeks’ were familiar with the pliability and lightweight nature of polymers.
Organic polymers like rubber (discovered in the 18th century) and cellulose (discovered in the 19th century) were the bio-based materials that helped people build things before oil was around. Hemp is 70% cellulose, which is what makes it such an attractive candidate for plastics.
It wasn’t until the 1920s and 1930s that oil-based plastics were discovered and utilized. The free market chose oil-based plastics because there was a large supply at a low price.
Manufacturers are always looking to reduce their cost of goods sold. This forced their hands to the reliable supply chain of cheap raw materials: petroleum-based plastic.
Now, 100 years later, manufacturing has fundamentally changed. Consumer demand is pushing all manufacturers and industries toward a more sustainable future. This is causing manufacturers and raw material suppliers to try to figure out how to include bio-based materials in the products they’re producing.
Bio-based plastics can be made from a dozen or more different places:
- Cellulose-based plastics – materials like flax, jute, kenaf, sisal, hemp, and trees.
- Protein-based plastics – soy, milk, casein, and other protein-rich commodities.
- Starch-based plastics – corn starch, potato starch, and other types of starchy material.
- Other types of biomass – sugar cane, corn, and other bio-waste materials.
There are dozens of different bio-based inputs, production processes, and final outputs. This means that bioplastics can be approached from hundreds of different angles. But, when push comes to shove, the world of bioplastics is really about getting the cheapest possible input material with the highest throughput per hour.
Currently, there is no reliable bioplastic supply chain. There are resins like PLA, PHA, and bio-based polyethylene that exist in small silos within the plastics market. Unfortunately, these are expensive alternatives and have received very little traction.
This is leaving many hemp companies thinking about the potential market opportunity of turning hemp materials into plastics.
By and large, when it comes to hemp-based plastics, there are two schools of thought:
- Make the plastic out of hemp by converting hemp to cellulose, cellulose to oil (or ethanol), and oil to plastic.
- Use hemp as an additive to make the plastic that is already used in the marketplace stronger, lighter, cheaper, and more sustainable.
Unlike many other hemp companies, Heartland has taken the 2nd path, and we did so after months of research. We would have loved to go into the market selling “bioplastics”. But, when we spoke to the plastics market, they told us they didn’t want it.
As we know, the plastics and rubbers of today are mostly synthetic (petroleum-based) polymers. These polymers each have different chemical properties, which gives them certain performance characteristics.
Cellulose is the most abundant organic polymer, and can also be found in most crops grown today. This is commonly found in everything from paper and cardboard to lumber.
So, if we can get plastic from either petroleum-based polymers or bio-based polymers, how do we determine which is the better path forward?
That answer is different today than it may be a decade from now.
Plastic Market Supply Chains
The fact is, that the plastics market has pre-established relationships and supply chains. Any company that wants to operate in that market has to figure out how to align with those supply chains and relationships instead of competing with them. It took us dozens of phone calls to the plastics industry to figure that out.
Regardless of the market intelligence, we have gathered, there are still companies that are trying to make plastic out of hemp today. They are 100% certain that a world that only uses plastic made from hemp is better off.
Unfortunately, their idealistic notion of how the world should work hits a roadblock when they take the first step. Here are a few roadblocks that are preventing plastic made from hemp from becoming mainstream today.
- Significant capital investment. Building a chemical manufacturing plant that converts hemp into biopolymers that can be converted to plastic at scale is at least a 9 figure investment.
- It costs more than traditional plastic. Bioplastics have less supply, less demand, and higher price points. This is problematic in a commodity market where manufacturers are relying on raw material supply chains at the lowest possible cost.
- Time. Time. Time. The amount of testing that would have to be done on biopolymers that don’t have a reliable supply chain means years of R&D testing without any certainty around the outcome. The product development process for biopolymers is at least multiple years.
Many people in the hemp industry assume that everyone wants bioplastics tomorrow. Unfortunately, manufacturing and distributing bioplastics at scale is no easy feat. There are a lot of roadblocks and market conditions that stand in the way of companies trying to convert bio-based materials to plastic at scale. This means that the majority of the market will be made up of petroleum-based plastics for the foreseeable future.
Lego is one of the few companies that has come out and stated that by 2030, they want all their products to use bio-based resins. Although that’s a great sustainability mandate, it’s still a long way away. Out of the hundreds of companies we’ve spoken to, Lego was the only one that wanted a biopolymer today. Every other company thought hemp additives were the simplest transition point.
Plastic derived from hemp will inevitably become a reality over the next 10-20 years. Gradually, chemical conversion plants will come online. Most of them will fail, but the ones that have great technology and customers will stay alive.
To us, the power of the hemp plant is not in its ability to convert into plastic, but its ability to give plastic specific performance characteristics. By using hemp as an additive to plastic, we are:
- Removing toxic additives from the global supply chain. This includes, but is not limited to: Reinforcement agents like glass fiber that are carcinogenic and require hazmat suits to utilize. Volume fillers like talc and calcium carbonate are carcinogenic, mined materials.
- Removing the amount of plastic needed to produce the same amount of material. Because hemp takes up so much volume, it requires less plastic to produce the same amount of total product (in cubic feet).
Using hemp as an additive allows us to make today’s plastics stronger, lighter, cheaper, and more sustainable. Here are just a few reasons why we decided that hemp has a great opportunity to make a positive impact on raw material supply chains as an additive.
Market Potential for Bio-Based Hemp Fiber in Plastics
Our total addressable market (TAM) is the 500 billion+ pounds of plastic that are used in the world. The total addressable market for the company that’s converting hemp into bioplastics is the handful of manufacturers looking to make that transition over the next few years.
Hemp Fiber Removes Toxic Additives in Plastics
Our ability to remove talc, calcium carbonate, glass fiber, and other additives from plastics is going to help our customers become more sustainable. The fact that it will require less plastic to produce the same amount of volume is icing on the cake. The toxic materials we’re replacing are heavy, carcinogenic, and require high carbon footprints in order to produce.
Additional Lightweighting in Automotive
The lightweighting benefits we are creating in the mobility sector allow vehicles to get higher MPG, acceleration, flexibility, and other performance benefits. Plastics are used across the mobility sector as a raw material because of its lightweight nature. Hemp additives will allow companies to even further lightweight their cars, boats, planes, bikes, buses, campers, canoes, 4-wheelers, and other modes of transportation.
Bio-Based Hemp Fiber Creates a Carbon-Negative Footprint
It’s amazing that a carbon-negative material like hemp, produced at scale, can fundamentally shift the carbon footprint of the plastic that touches all industries. Every 1 pound of hemp sequesters 2.85 pounds of carbon dioxide. This means that, at scale, our supply chain will be sequestering over one million pounds of carbon dioxide from the atmosphere each day. Hemp additives are the plastic industry’s opportunity to start reducing the negative impact on our environment today.
Our customers, investors, advisors, and scientists see industrial hemp providing tons of value as an additive to the products that are already being produced on a daily basis.
We are building our supply chain in a way that allows our manufacturing partners to use as much hemp as they want in their plastic. Our fibers and hurds are engineered specifically for polymers. We know the specific input format necessary for plastics compounders to use hemp-based materials as additives for performance benefits. Once we establish hemp as the premier additive in plastics, we can positively impact all the manufacturing sectors. In the near future, sustainable materials will be embedded into everything you see around you. It’s only a matter of time.
Join us as we build a world out of hemp.