Compostable Packaging Market - By Material, By Product, By Application, By End-use Industry and Forecast, 2025-2034

Compostable Packaging Market Size

The global compostable packaging market was valued at USD 80.5 billion in 2024 and is estimated to grow at a CAGR of 7.6% from 2025 to 2034.
 

The demand for sustainable packaging solutions is fueling market growth as environmental awareness and regulatory requirements increase. Eco-friendly packaging materials that are compostable, recyclable, and biodegradable are at the forefront of innovation and investment, aligning with consumer preferences for environmentally responsible products and promoting overall market development
 

For instance, in November 2024, UPM Specialty Papers and Eastman introduced biopolymer-coated paper, a compostable packaging solution that offers enhanced grease and oxygen barriers for food applications. The biopolymer-coated paper integrates Eastman’s biobased Solus additives with barrier base papers. The new paper solution features a thin, compostable coating that maintains its recyclability within existing fiber recycling streams. UPM’s barrier base papers, known as UPM Solide Lucent and UPM Prego, are enhanced by the unique coating, achieving a level of barrier performance that is unattainable by each component alone.
 

Compostable Packaging Market Trends

A key trend in the compostable packaging industry is the development of bioplastic-based products, such as polyhydroxyalkanoates (PHA), which are industrially compostable, non-toxic, and leave no microplastics behind. This innovation aligns with the rising consumer demand for eco-friendly alternatives that maintain high performance and convenience. Companies are leveraging advanced materials and technology to create durable, sustainable solutions that resonate with environmentally conscious consumers, fostering a shift toward packaging that supports both convenience and environmental stewardship.
 

For instance, In October 2024, Genecis Bioindustries launched Mad Tea, a brand offering 100% compostable tea pods compatible with Nespresso machines. The pods, made from PHA-based bioplastics, are eco-friendly, non-toxic, and leave no microplastics. Mad Tea provides quick-brewing, vegan, and lactose-free specialty teas, blending sustainability with convenience and bold flavors.
 

Compostable Packaging Market Analysis

Higher production costs present a significant challenge for the compostable packaging industry. Developing eco-friendly materials often involves specialized raw inputs, advanced technology, and research, making production more expensive compared to traditional plastic packaging. These increased costs can deter smaller companies from adopting compostable options, impacting large-scale implementation. Additionally, consumers may face higher prices for sustainably packaged products, limiting widespread acceptance. Balancing affordability with environmental responsibility is crucial for industry players to promote sustainable solutions while remaining competitive. Overcoming this cost barrier requires innovations in production efficiency, government incentives, and investments to scale up operations and reduce expenses over time.
 

The growing consumer preference for environmentally friendly products creates potential for the compostable packaging industry. As sustainability becomes a priority for shoppers, companies providing compostable packaging can tap into this demand. This shift allows for product differentiation, fostering brand loyalty and enabling premium pricing, positioning sustainability as a strategic advantage.
 

Based on material, the compostable packaging market is divided into polylactic acid (PLA), cellulose, bamboo, wood, and polyhydroxyalkanoate (PHA). The polylactic acid (PLA) segment is expected to reach a value of over USD 55 billion by 2034.
 

• PLA is a biodegradable plastic derived from renewable resources such as corn starch or sugarcane. This makes it an attractive alternative to traditional petroleum-based plastics, which are harmful to the environment. PLA's ability to degrade under industrial composting conditions ensures it meets sustainability goals, aligning with the growing demand for eco-friendly packaging solutions. Furthermore, its versatility in packaging applications, ranging from food containers to beverage cups, enhances its appeal in diverse industries, driving its market growth.
   
• PLA offers a compelling solution, as it provides similar functionality to conventional plastics, including durability and clarity, but with the added benefit of being compostable. As more regions implement regulations to reduce plastic waste, the demand for PLA-based packaging is expected to grow, reinforcing its dominant position in the market.
   

Based on product, the market is divided into bags & pouches, trays & plates, films & wraps, cups & bowls, and others. The films & wraps segment is the fastest growing segment with a CAGR of over 9% between 2025 and 2034.
 

• The films & wraps segment is the fastest growing in the market due to their widespread use in food packaging and increasing demand for eco-friendly alternatives to plastic films. Compostable films and wraps offer the same protective qualities as conventional plastics, such as moisture barrier, freshness retention, and durability, making them ideal for packaging fresh produce, snacks, and ready-to-eat meals. As consumers and brands seek more sustainable options, these films are gaining popularity because they can be easily composted after use, reducing landfill waste. Their ability to biodegrade quickly and leave no harmful residues aligns with the global push for zero-waste packaging solutions.
   

• In addition to sustainability, the rapid growth of the films & wraps segment is also driven by advancements in material technology. Manufacturers are developing compostable films using plant-based materials like polylactic acid (PLA), which can be customized to fit a wide range of applications. These materials are lightweight, flexible, and can be used for a variety of packaging needs, such as single-use wraps, vacuum bags, and flexible pouches. With increasing regulatory pressure to phase out conventional plastics and the growing awareness of environmental issues, the demand for compostable films and wraps is expected to continue its strong growth trajectory in the coming years.
   

North America held the significant share of over 30% in the global market. The U.S. is experiencing growth in the compostable packaging market due to increasing consumer awareness of environmental issues and strong regulatory support aimed at reducing plastic waste. Companies are innovating to meet stricter sustainability standards and cater to the eco-conscious market. Additionally, advancements in compostable materials and investment in green technologies are driving adoption across industries, further propelling the market's expansion.
 

China is seeing growth in the compostable packaging industry due to government policies aimed at reducing plastic waste and enhancing sustainability. The nation's large consumer base and rapid urbanization have amplified the demand for environmentally friendly packaging solutions. Local manufacturers are investing in innovative materials, and partnerships with global companies are fostering advancements in compostable technology.
 

India’s market is expanding, driven by increasing environmental awareness and government initiatives promoting sustainable practices. The push for reducing single-use plastics has encouraged businesses to adopt compostable alternatives. Additionally, startups and established companies are focusing on eco-friendly innovations, catering to a growing segment of environmentally conscious consumers.
 

In South Korea, growth in the market is bolstered by strict waste management regulations and a strong culture of environmental responsibility. The government’s active role in promoting green technologies, coupled with support for research and development, has spurred local industries to adopt sustainable packaging solutions. This aligns with consumers' growing preference for eco-friendly products.
 

Japan’s growth in the compostable packaging market is fueled by its commitment to sustainability and technological innovation. The country’s emphasis on circular economy principles has pushed companies to adopt eco-friendly packaging. Collaborative efforts between government agencies, research institutions, and private enterprises are helping to develop and scale compostable packaging, meeting consumer demand for sustainable options.
 

Compostable Packaging Market Share

Competition in the compostable packaging industry is driven by several key factors, including price, product innovation, sustainability, and distribution. Companies compete by offering cost-effective yet high-quality compostable materials, with a strong emphasis on differentiating through advanced eco-friendly solutions. Product innovation, such as the development of more durable and versatile compostable packaging, is critical for attracting environmentally conscious consumers. Additionally, distribution channels play a significant role, as companies work to expand their reach through partnerships with major brands and retailers, ensuring wider availability of sustainable packaging solutions.
 

Compostable Packaging Market Companies

Major players operating in the compostable packaging industry are:

• Amcor
• Baroda Rapids
• Biopac
• Eurocell
• Futamura Chemical
• Genpak
• Good Start Packaging
• Graphic Packaging Holding
• International Paper
• Mayr-Melnhof Karton
• Mondi
• Pappco Greenware
• Pactiv Evergreen
• Sealed Air
• TIPA
• Ultra-Green Sustainable Packaging
• Vegware
• WestRock
   

Compostable Packaging Industry News

• In September 2024, Detpak launched range of over 20 commercially compostable and recyclable PBS-lined packaging, including cartons, trays, and lunchboxes. PBS linings are typically extruded onto the material to create a barrier, which makes them ideal to be used for a variety of purposes, including cartons, cups, and other applications requiring a robust barrier performance.  This initiative aligns with new legislation aimed at reducing single-use plastics. The PBS range meets both Australian and European composting standards, offering sustainable alternatives for food service businesses like Nando's.
   
• In February 2024, SEE launched the biobased compostable protein tray at the IPPE event in Atlanta, marking a significant shift in packaging for fresh meats and poultry. Made from renewable wood cellulose and certified by the USDA, the tray offers a sustainable alternative to polystyrene, addressing growing environmental concerns and legislative pressures.
   

This compostable packaging market research report includes in-depth coverage of the industry with estimates & forecast in terms of revenue (USD Billion) & volume (Kilo Tons) from 2022 to 2034, for the following segments:

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Market, By Material

• Polylactic acid (PLA)
• Cellulose
• Bamboo
• Wood
• Polyhydroxyalkanoate (PHA)

Market, By Product

• Bags & pouches
• Trays & plates
• Films & wraps
• Cups & bowls
• Others

Market, By Application

• Apparel & accessories
• Health & beauty
• Ready-to-eat foods
• Snacks & confectionery
• Others

Market, By End-use Industry

• Agriculture
• Food & Beverages
• Healthcare & Pharmaceuticals
• Retail & Consumer Goods
• Others

The above information is provided for the following regions and countries:

• North America
  • U.S.
  • Canada
• Europe
  • UK
  • Germany
  • France
  • Italy
  • Spain
  • Russia
• Asia Pacific
  • China
  • India
  • Japan
  • South Korea
  • Australia 
• Latin America
  • Brazil
  • Mexico
• MEA
  • UAE
  • Saudi Arabia
  • South Africa