Compostable Packaging - Global Strategic Business Report

The global market for Compostable Packaging was estimated at US$84.5 Billion in 2024 and is projected to reach US$120.2 Billion by 2030, growing at a CAGR of 6.0% from 2024 to 2030. This comprehensive report provides an in-depth analysis of market trends, drivers, and forecasts, helping you make informed business decisions. The report includes the most recent global tariff developments and how they impact the Compostable Packaging market.

Global Compostable Packaging Market - Key Trends & Drivers Summarized

Why Is Compostable Packaging Becoming a Key Focus in Sustainable Packaging?

The increasing global emphasis on environmental sustainability and waste reduction has placed compostable packaging at the center of the packaging industry`s transformation. With conventional plastic waste contributing significantly to landfill overflow and marine pollution, businesses, regulators, and consumers are actively seeking sustainable alternatives. Compostable packaging, made from renewable plant-based materials such as cornstarch, bagasse, polylactic acid, and biopolymers, offers an eco-friendly solution that decomposes naturally without leaving harmful microplastics. Government regulations banning single-use plastics have accelerated the shift toward compostable alternatives. Many countries and regions, including the European Union, Canada, and parts of the United States, have implemented strict policies restricting the use of plastic packaging, compelling businesses to transition to sustainable alternatives. Additionally, an increasing number of cities have adopted composting programs, enabling compostable packaging to be effectively processed alongside food waste, reducing the burden on traditional recycling and landfill systems. Consumer demand has also played a critical role in driving market growth. As sustainability awareness increases, shoppers are actively choosing brands that prioritize environmentally friendly packaging. The food and beverage industry, in particular, has seen a rapid adoption of compostable packaging for takeaway containers, beverage cups, and snack wraps. Major brands and retailers are responding to this demand by integrating compostable materials into their packaging strategies, reinforcing their commitment to sustainability and reducing their reliance on fossil-fuel-based plastics.

How Are Material Innovations Enhancing the Effectiveness of Compostable Packaging?

Advancements in material science have significantly improved the performance and functionality of compostable packaging. Early iterations of biodegradable materials often faced challenges related to durability, heat resistance, and moisture retention, limiting their applicability. However, recent innovations in biopolymer technology have led to the development of stronger, more flexible, and highly functional compostable materials that can effectively replace plastic in various packaging applications. One of the most significant developments has been the introduction of water-resistant and grease-resistant coatings derived from natural plant-based sources. These coatings provide compostable packaging with the ability to handle liquid and oily food items without compromising structural integrity. The emergence of high-performance molded fiber packaging has further enhanced durability, enabling businesses to use compostable packaging for fresh produce, takeaway meals, and frozen foods. The push toward home-compostable packaging has also gained momentum. While traditional compostable materials require industrial composting facilities to break down effectively, new formulations are being developed to degrade in backyard composting environments. This innovation is particularly important in regions where municipal composting infrastructure is not yet fully developed, ensuring that consumers can responsibly dispose of packaging without relying on landfill-based waste management systems.

What Market Trends Are Driving the Adoption of Compostable Packaging?

The increasing integration of circular economy principles is a major trend shaping the compostable packaging market. Governments and businesses are focusing on creating closed-loop packaging systems where materials are either composted, reused, or repurposed, minimizing overall waste generation. This shift has led to stronger collaborations between packaging manufacturers, waste management companies, and policymakers to establish composting infrastructure and streamline the disposal process for compostable materials. The rapid expansion of the food delivery and e-commerce sectors has also contributed to the rising demand for compostable packaging. With online food delivery services experiencing exponential growth, disposable packaging waste has become a growing concern. Many restaurants, meal kit providers, and delivery platforms are transitioning to compostable alternatives to address sustainability concerns and meet regulatory compliance. Similarly, e-commerce businesses are increasingly adopting compostable mailers, void fillers, and protective wraps as part of their sustainable packaging initiatives. Retailers and supermarkets are playing a significant role in shaping market adoption. Private-label brands and grocery stores are introducing compostable packaging options for fresh produce, bakery items, and pre-packaged meals. Many retailers are also implementing sustainable packaging guidelines for suppliers, driving broader industry-wide adoption. Additionally, the expansion of smart labeling technologies, such as QR codes that guide consumers on composting practices, is improving consumer awareness and compliance with compostable waste disposal.

What Are the Key Growth Drivers Fueling the Market?

The growth in the compostable packaging market is driven by several factors, including regulatory mandates, technological advancements, and shifting consumer preferences. One of the primary growth drivers is the increasing number of government policies banning single-use plastics. Countries across Europe, North America, and Asia-Pacific are enforcing legislation that requires businesses to transition to sustainable packaging, fueling demand for compostable solutions across multiple industries. The expansion of bioplastics and plant-based material manufacturing is another key factor accelerating market growth. Companies are investing heavily in the development of biopolymer production facilities, increasing the availability and affordability of compostable packaging materials. As production scales up and material costs decline, more businesses are expected to adopt compostable packaging as a cost-competitive alternative to traditional plastics. The rising corporate commitment to sustainability is also shaping market expansion. Major food and beverage brands, retail chains, and logistics companies are setting ambitious sustainability targets, integrating compostable packaging as part of their broader environmental responsibility initiatives. Many global brands have pledged to phase out plastic packaging by 2030, driving partnerships with compostable packaging manufacturers to develop scalable and industry-specific solutions. Additionally, the increasing consumer preference for eco-friendly products is driving adoption. Younger demographics, particularly millennials and Gen Z consumers, are prioritizing brands that demonstrate sustainability efforts, influencing purchasing decisions and brand loyalty. This shift in consumer behavior has prompted businesses to market their use of compostable packaging as a competitive differentiator, further accelerating market adoption.

With these factors collectively shaping the future of the compostable packaging market, the industry is poised for significant expansion, supported by advancements in material technology, evolving regulatory frameworks, and the growing demand for sustainable alternatives across various sectors.

Report Scope

The report analyzes the Compostable Packaging market, presented in terms of market value (US$ Thousand). The analysis covers the key segments and geographic regions outlined below.

Segments: Material (Polylactic Acid Material, Wood Material, Bamboo Material, Other Materials); Product Type (Compostable Bags, Compostable Trays, Compostable Pouches, Compostable Films, Other Product Types); Application (Food and Beverages Application, Pharmaceuticals Application, Cosmetics Application, Other Applications)

Geographic Regions/Countries: World; United States; Canada; Japan; China; Europe (France; Germany; Italy; United Kingdom; and Rest of Europe); Asia-Pacific; Rest of World.

Key Insights:

• Market Growth: Understand the significant growth trajectory of the Polylactic Acid Material segment, which is expected to reach US$54.5 Billion by 2030 with a CAGR of a 6.8%. The Wood Material segment is also set to grow at 5.9% CAGR over the analysis period.
• Regional Analysis: Gain insights into the U.S. market, estimated at $22.2 Billion in 2024, and China, forecasted to grow at an impressive 5.9% CAGR to reach $19.3 Billion by 2030. Discover growth trends in other key regions, including Japan, Canada, Germany, and the Asia-Pacific.

Why You Should Buy This Report:

• Detailed Market Analysis: Access a thorough analysis of the Global Compostable Packaging Market, covering all major geographic regions and market segments.
• Competitive Insights: Get an overview of the competitive landscape, including the market presence of major players across different geographies.
• Future Trends and Drivers: Understand the key trends and drivers shaping the future of the Global Compostable Packaging Market.
• Actionable Insights: Benefit from actionable insights that can help you identify new revenue opportunities and make strategic business decisions.

Key Questions Answered:

• How is the Global Compostable Packaging Market expected to evolve by 2030?
• What are the main drivers and restraints affecting the market?
• Which market segments will grow the most over the forecast period?
• How will market shares for different regions and segments change by 2030?
• Who are the leading players in the market, and what are their prospects?

Report Features:

• Comprehensive Market Data: Independent analysis of annual sales and market forecasts in US$ Million from 2024 to 2030.
• In-Depth Regional Analysis: Detailed insights into key markets, including the U.S., China, Japan, Canada, Europe, Asia-Pacific, Latin America, Middle East, and Africa.
• Company Profiles: Coverage of players such as Adapa Group, Amcor, Be Green Packaging, Biopak PTY Ltd, Carvajal Empaques S.A. and more.
• Complimentary Updates: Receive free report updates for one year to keep you informed of the latest market developments.

Select Competitors (Total 32 Featured):

• Adapa Group
• Amcor
• Be Green Packaging
• Biopak PTY Ltd
• Carvajal Empaques S.A.
• DS Smith
• Footprint
• Golden Arrow
• Greenpack Limited
• Huhtamäki Oyj
• International Paper Company
• Kraton Polymers
• Mondi Group
• Novamont
• Schur Flexibles Group
• Smurfit Kappa
• Stora Enso
• Tetra Pak
• TIPA Corp.
• UPM-Kymmene Corporation

Tariff Impact Analysis: Key Insights for 2025

Global tariff negotiations across 180+ countries are reshaping supply chains, costs, and competitiveness. This report reflects the latest developments as of April 2025 and incorporates forward-looking insights into the market outlook.

The analysts continuously track trade developments worldwide, drawing insights from leading global economists and over 200 industry and policy institutions, including think tanks, trade organizations, and national economic advisory bodies. This intelligence is integrated into forecasting models to provide timely, data-driven analysis of emerging risks and opportunities.

What’s Included in This Edition:

• Tariff-adjusted market forecasts by region and segment
• Analysis of cost and supply chain implications by sourcing and trade exposure
• Strategic insights into geographic shifts

Buyers receive a free July 2025 update with:

• Finalized tariff impacts and new trade agreement effects
• Updated projections reflecting global sourcing and cost shifts
• Expanded country-specific coverage across the industry