October 23, 2007

Metabolix: The Future of Biodegradable Bio-Plastic

Yesterday, we pointed out green alternatives for plastic gift cards. One of the alternative was to substitute traditional plastic with biodegradable bio-plastic, such as Mirel. Mirel is produced by Cambridge, MA based Metabolix. Today, we are going to take a closer look at the barriers facing Metabolix with adoption of their biodegradable bioplastic and the competition they face from NatureWorks, especially in the gift card space.

The Mirel bio-plastic is made from corn with the aid of genetically engineered bacteria that ferments the corn into a suitable base material. A pound of Mirel cost about $2.50 a pound, while conventional plastic cost about $0.70 to $0.90 a pound. The main advantage of Mirel over other bio-plastic is that it breaks down faster. It takes about two months for Mirel to decompose in a compost pile and twice as long in wet environments. However, there are three potential barriers for using Mirel. First, the cost is more expensive than conventional plastic. How many companies are willing to use a material that is three times more expensive? Second, composting is the best option of breaking down the bio-plastic. But, how many households compost their own garbage? Furthermore, most garbage in landfills are compress so tightly that there is not much air or moisture in there to aid with decomposition. Third, there is a more mature bio-plastic out there, such as NatureWorks.

The most commonly used bio-plastic and biodegradable plastic is called NatureWorks, a product owned by a subsidiary of Cargill. The plastic is made from genetically modified (GM) corn. While it doesn’t use bacteria, it does use GM corn. Natureworks tout that their plastic is carbon neutral and requires 68% less energy to produce than conventional plastic. However, it does cost 10% to 20% more to produce than conventional plastic. Currently, Sam’s Club, Walmart, Buca Di Beppo, Target, and Blockbuster use NatureWorks for some of their gift cards. The main advantage that Natureworks has over Mirel is that it cost less and is transparent, which is useful for drink bottles. However, Mirel does have an advantage over NatureWorks in that it degrades faster.

While, both bio-plastic are more expensive than traditional plastic. The cost will drop with an increase demand for the material. For example, the City of San Francisco recently banned the use of styrofoam containers for restaurant take outs. Restaurants will need to use recyclable and compostable alternatives. Laws such as these help drive up demand for biodegradable bio-plastic, which in turn results in lower price. The issue of cost is the primary barrier and once that is taken care of the other barriers will take care of themselves. This is true for either Mirel or NatureWorks. However, for Mirel to come out ahead, it needs to find greater adoption and application. The fact that they are talking with over a dozen different companies about using Mirel as coffee cups, food containers, and disposable razor handles is an encouraging sign.

Plant-Based Plastics Carve Market Niche [AP via Google]

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