Compostable Packaging Market Size -By Material, By Product, By Application, By End-use Industry Analysis, Share, Growth 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 growing awareness of environmental issues in addition to regulatory obligations is encouraging investment in sustainable packaging materials. These eco-friendly products that include recyclable, compostable and biodegradable materials fit consumer needs, thus encouraging innovation and investment in them, which in turn promotes market growth.
 

For instance, in November 2024, UPM Specialty Papers together with Eastman launched biopolymer-covered paper, a compostable packaging that offers better oxygen and grease barriers for food products. The biopolymer-coated paper uses Eastman's bio-based Solus additives in combination with barrier-based papers. This alternative packaging solution uses a thin or ultra-thin coating that is easy to compost but allows it to be recycled in existing fiber recycling systems. The UPM Solide Lucent and UPM Prego barrier base papers benefit from the coating, improving the barrier performance that would not be achieved individually.

Compostable Packaging Market Trends

A key trend in the compostable packaging industry are bioplastics such as polyhydroxyalkanoates (PHAs) which are industrially compostable, non-toxic and free of any microplastics generation. Such progress reflects the current consumer trend towards green alternatives that have good utility and easy use. Companies invest in innovative materials and technologies to develop effective, durable, and recyclable products that meet consumers' increasingly demanding preferences for the environment, gradually changing the landscape of packaging that is user-friendly and environmentally friendly. For instance, in October 2024, Genecis Bioindustries introduced Mad Tea, a brand that sells compostable tea containers for Nespresso machines. These tea bags are made of PHA-based bioplastics that is eco-friendly, non-toxic and microplastic. Mad Tea specializes in the production of tea and makes fast and vegan tea that is lactose-free while maintaining a bold taste and sustainability.
 

Compostable Packaging Market Analysis

Higher production costs are the other significant challenge in the compostable packaging industry. Eco-friendly materials require specialized raw inputs, advanced technology, and research, which makes them costlier than regular plastic packaging. The increase in costs may discourage small companies from adopting compostable alternatives because of high costs of creating such environment-friendly materials. Thus, on the large-scale application, customers will be charged higher for sustainably packaged products, which might limit acceptance. The increase in production costs will continue to be a major challenge and to overcome this will require innovations in production processes, subsidies, and investments to enable migration to more efficient operating models.
 

The growing focus on eco-sustainability among consumers provides scope and market for the introduction of compostable packaging. Since eco sustainability is an important consideration for consumers, companies offering compostable packages should take note of it. This helps differentiate the product so that customers are loyal to the brand, and regardless of price positioning, then the brand can be used to indicate the strength of competitive advantage in the market.
 

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, or Polylactic Acid, is a synthetic plastic that is capable of rapid biodegradation. The polymers from which PLA is manufactured are obtained through the fermentation of sugarcane and corn starch, which allows PLA to maintain its sustainable appeal. PLA's ability to handle numerous food applications in the form of drink cups and food containers speaks volumes about its versatility, allowing it to thrive in several markets.
   
• With the growing concern about the disposal of plastic waste, which is one of the rapid growing problems, PLA seems to offer a reliable solution with its compostable properties while stimulating the functions of a normal plastic. With the increase in regulations for plastic waste across regions, demand for PLA-based packaging will be on the rise, thus supporting 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 compostable packaging market due to its extensive use in food packaging and growing demand for environmentally friendly alternatives to plastic films. Compostable films and wraps have the same protection properties as conventional plastics, like moisture barrier, freshness retention, and durability, which makes them perfect for packing fresh produce, snacks, and ready-to-eat meals. The popularity of these films is increasing among consumers and brands as they can easily be composted after use, thus avoiding waste in landfills. This property of fast biodegradability with no toxic residues makes them fit for the global demand for zero-waste packaging solutions.
   
• Manufacturers are developing new strategies to produce demographically specific compostable films using plant-based substances such as polylactic acid, which are light, airy and flexible and can be used to create versatile applications for vacuum bags, single-use wrappings, and bags.
   

North America held a significant share of over 30% in the global compostable packaging market. In the US market for compostable packaging, we see growth in expansion. This is due to increased consumer awareness and regulatory concerns related to technology. Industry is attempting to comply with regulatory requirements for eco packaging. In addition, research and development in compostable materials and investments in eco-friendly technologies accelerate the pace of adoption across industries, increasing the scope of market growth.
 

The Chinese Government targets the compostable packaging industry and offers incentives for research aimed at evaporating increasing plastic waste. The country is characterized by a large population and rapid urbanization, which increases the demand for environmentally safe packaging. New manufacturers are looking to buy new materials that have never been used before and joint ventures with international companies are developing technologies for the production of compostable materials.
 

The market for compostable packaging in India is on the rise due to greater environmental awareness and government support. The Government of India has launched a campaign promoting the use of compostable substitutes as an alternative campaign to single-use plastics. In addition, established and new start-up companies are involved in the production of environmentally friendly goods that serve the growing desire for environmentally friendly goods.
 

The South Korean compostable packaging market continues to grow year after year primarily because of the policies concerning waste management and environmental culture. The government fully supports green technology by pushing for research and development that has resulted in local companies shifting towards a greener direction. This comes in line with the needs of consumers who favor green products.
 

The strategy that Japan is employing for sustainable development, and technology is the driving force behind the expansion of the country in the market. There are higher principles of the circular economy that have encouraged companies to use green packaging. The joined efforts by the public institutions, research institutions, and the business sector are responsible for producing and spreading compostable packaging that consumers can already buy.
 

Compostable Packaging Market Share

Price, product innovation, sustainability and distribution are some of the important aspects that are responsible for competitiveness in the compostable packaging industry. Companies compete with affordable but top-quality compostable materials and focus on differentiation through eco-friendly solutions. Developing more functional and multipurpose packaging that is still able to decompose is important to strengthen the market by expanding the demand for environmentally friendly products. In addition, distribution channels are important, as companies seek collaboration with various big brands and retailers in order to improve the accessibility of sustainable packaging means.
 

Compostable Packaging Market Companies

Major players operating in the compostable packaging industry are:

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

Compostable Packaging Industry News

• In September 2024, Detpak launched a series of over 20 commercially compostable and recyclable PBS-lined packaging, including cartons, trays, and lunchboxes. PBS linings are commonly extruded onto the material for barrier formation, which suits them to be used for such applications as cartons, cups, and other applications, in which a significant barrier performance is required.
   
• In February 2024, At IPPE, in Atlanta, SEE launches a biobased compostable protein tray-an important shift for fresh meats and poultry packaging. It is made from renewable wood cellulose and, with USDA certification, provides an environmentally friendly replacement for polystyrene amid rising environmental pressure and legislative demands.
   

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