Green but in the Red: Can Bioplastics Become Economically Viable?

Recent Danimer Scientific and Brightmark bankruptcies have raised concerns around bioplastics and economics. Can a more innovative strategy shift the balance?

Over the past decade, the global push for sustainability has thrown bioplastics and advanced plastic recycling into the spotlight. These technologies promised a cleaner, circular economy where innovation could reduce plastic pollution. But the recent bankruptcies of Danimer Scientific and Brightmark show that green technology can’t escape the gravity of market forces. Despite receiving billions in investment and benefiting from strong environmental narratives, these ventures operated on uncertain economic footing.

You can also read: Cellulose Bioplastics: The Choice of Leading Companies.

So, can bioplastics truly offer a profitable, scalable alternative to petroleum-based plastics? Or do they represent another case where green hype has outpaced market readiness?

Why Bioplastics Struggle Economically

Bioplastics provide notable environmental advantages: they are biodegradable, derived from renewable sources, and often exhibit a lower carbon footprint. However, most companies in this niche have yet to achieve financial stability, reflecting the broader economic challenges of the sector.

High Production Costs vs. Petrochemical Plastics

Bioplastics cost significantly more to produce than conventional plastics. While traditional plastics like polyethylene benefit from decades of scaling and infrastructure, newer materials like PLA and PHA face high unit costs.

Source: European Bioplastics, IHS Markit, company reports

Even as prices fluctuate, bioplastics consistently carry a premium. Without subsidies, most manufacturers and consumers refuse to pay more—particularly in competitive sectors like food packaging or disposables.

Slow Market Adoption and Unstable Demand

Danimer built its business model around the expectation that single-use plastic bans and environmental rules would quickly drive up demand for biodegradable materials. While some jurisdictions enacted these bans, global adoption has been inconsistent and slower than predicted.

• Many clients delayed switching due to higher costs or lack of local composting infrastructure.
• Composting facilities that can handle PLA or PHA remain scarce.
• Vague labeling and varied performance (e.g., marine biodegradability vs. industrial compostability) caused confusion and stalled regulations.

With uncertain demand, plants like Danimer’s in Winchester operated below capacity and incurred heavy losses.

Overambitious Expansion and Investor Hype

The SPAC surge of 2020–2021 funneled fast capital into green startups, often before they secured reliable revenue. Danimer reached a post-SPAC valuation of $890 million, but by 2024, its market cap had fallen below $15 million, leading to its delisting. Overpromised projections and underwhelming execution drew scrutiny from short sellers, which further destabilized investor confidence.

Brightmark also scaled too quickly. Its Indiana pyrolysis plant was built to process 100,000 tons per year but only handled about 2,000 tons before declaring bankruptcy. Without proving technical and commercial feasibility, the company burned through cash with little return.

Feedstock and Logistics Challenges

Most bioplastics rely on agricultural feedstocks like corn or sugarcane, which compete with food markets and suffer from price swings. Additionally, recycling-based firms like Brightmark faced a different problem—dirty, mixed plastic waste that’s difficult to clean, sort, and process efficiently.

Key logistical and technical challenges:

• Sourcing and transporting raw materials at scale
• Separating and cleaning post-consumer plastic waste
• Scaling up unproven recycling technologies like pyrolysis

Policy Comparison: Bioplastics & Plastics Recycling

Sources: European Commission Circular Economy Reports, UNEP, OECD Plastic Outlook, national policy portals (2024).

Key Takeaways

• The EU leads in creating a strong, supportive environment for bioplastics and circular economy technologies.
• The United States suffers from fragmented policy, limiting nationwide adoption.
• Emerging economies like India and Brazil show potential but struggle with enforcement and infrastructure gaps.
• Incentives matter: Without government support, bioplastics cannot compete with cheaper, petroleum-based plastics.

Lessons from a Green Collapse

The collapses of Danimer Scientific and Brightmark reveal more than mismanagement—they highlight deeper structural challenges in the bioplastics and recycling sectors. Even though the underlying science holds promise, the business models often falter under economic pressure.

What Needs to Change?

• Set realistic expectations: Green technologies need patient capital and long-term thinking.
• Enact stronger policies: Governments must internalize the environmental costs of plastic through carbon pricing, plastic taxes, and mandatory compostability standards.
• Target investments: Fund scalable and proven solutions, especially in end-of-life treatment like enzymatic recycling and composting infrastructure.
• Encourage public-private partnerships: The EU’s success shows how coherent regulation and innovation grants help green businesses thrive.