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Bio-based products have a multitrillion growth opportunity.

Relevance to the Future of Logistics

Building & Construction Material

According to the United Nations Environment Programme, approximately 40% of global energy use and about 30% of energy-related greenhouse gas emissions are linked to the building and construction sector. With logistics organizations utilizing hundreds of thousands of facilities, warehouses, and offices, there is a great opportunity to reduce the environmental footprint of supply chains beyond just transport emissions.

Bio-based building materials have significant potential in achieving sustainability goals, with many tech providers already recognizing their capabilities. For example, Prometheus Materials, an American startup, has developed a bio-cement alternative to conventional cement (a large emitter of CO2) through a photosynthetic process using microalgae. By utilizing bio-based materials, logistics organizations are empowered in tackling not just emissions from transportation but also from building construction.

Warehouse Assets

As e-commerce expands, the number of warehouses will grow exponentially along with associated warehousing assets such as pallets, racks, and picking bins. For instance, the global pallet market is expected to increase by more than 33% from 82 billion USD in 2020 to 110.5 billion USD in 2027. However, more assets generally mean more anticipated replacements, usually due to normal wear and tear.

Today, 90% of pallets are wooden and are already mostly bio-based but they break relatively easily compared with their fully metal or plastic counterparts. Instead of replacing them with these less sustainable alternatives or with increasingly expensive wood and nails, logistics organizations are progressively searching for bio-based materials that are more durable and reusable. One attractive solution, provided by Dutch company CocoPallet, is made from coconut husks that are not only biodegradable but also more durable and space efficient when stacked for storage.

By using bio-based materials like coconut pallets for assets in facilities, organizations can further enable warehouses and supply chains to be more sustainable while reducing replacement costs.

Packaging & Packing Materials

The most visible waste outputs from supply chains are packaging and packing materials, with less than 10% of plastic products recycled globally. Bags, wraps, bottles, and styrofoam are contaminating natural environments around the world. Pressure to address the status quo has grown, compelling the logistics industry to seek biodegradable alternatives.

However, not all biodegradable products come from renewable sources, and several companies especially in the eRetail and fashion sector, around the world are seeking to bridge this gap. Mushroom Packaging in New York, for example, designs and manufactures fungus-derived packaging for various products that can decompose in soils within 45 days. Meanwhile Notpla, based in the UK, utilizes seaweed to mass-produce food containers, paper, and liquid sachets that are both edible and compostable.

By adopting packaging and packing material that are both biodegradable and bio-based, supply chain organizations can better ensure they are tackling the sustainability challenge for the entire product life span, not just downstream.

Challenges

Bio-based material production is still relatively small and there may be supply challenges if such materials are adopted on a large scale.
Most bio-based solutions are pricier than less sustainable alternatives, limiting adoption.
While still a worthy step towards achieving sustainability goals, bio-based materials are not all biodegradable and may still contribute to waste.

This trend should be MODERATELY monitored, with some use cases applicable today.

Outlook

Due to increasing demand for more sustainable solutions, bio-based materials – despite not being new – have developed recent momentum across supply chains. However, adoption is limited by costs and current production scale. Still, as more bio-based alternatives are developed and reach market, we anticipate a surge in use to address sustainability challenges.

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Sources
  1. United Nations Environment Programme (UNEP) (2020): Sustainable Buildings
  2. Statista (2022): Pallet market size worldwide 2019-2027 (2022)
  3. Fédération Européenne des Fabricants de Palettes et Emballages en Bois (FEFPEB) (accessed 2022): Facts & Figures
  4. National Wooden Pallet and Container Association (NWPCA) (2021): Pallet Facts
  5. United Nations Environment Programme (UNEP) (2022): Our planet is choking on plastic