Canada Biodegradable Plastics Market Size, Share, Trends and Forecasts 2031

Key Findings

• The Canada Biodegradable Plastics Market is expanding as industries seek eco-friendly alternatives to conventional plastics to meet sustainability goals.

• Rising government regulations and bans on single-use plastics in Canada are boosting demand for biodegradable alternatives.

• Consumer preference for sustainable packaging solutions in Canada is accelerating market adoption across food, retail, and e-commerce.

• Biodegradable plastics are gaining traction in agriculture, where mulch films and plant pots reduce environmental impact.

• Technological advancements in biopolymers such as PLA, PHA, and starch blends are enhancing performance characteristics in Canada.

• Increasing investment in circular economy initiatives in Canada is strengthening the biodegradable plastics supply chain.

• Challenges with cost competitiveness and large-scale production remain, but innovation is steadily reducing barriers in Canada.

• Collaborations between chemical companies, packaging firms, and retailers in Canada are driving commercialization of new solutions.

Canada Biodegradable Plastics Market Size and Forecast

The Canada Biodegradable Plastics Market is projected to grow from USD 5.6 billion in 2025 to USD 13.8 billion by 2031, at a CAGR of 16.3% during the forecast period. Growth is being driven by stricter environmental regulations, growing consumer demand for sustainable alternatives, and technological advancements that enhance product strength, durability, and processing compatibility. With expanding applications in packaging, agriculture, textiles, and consumer goods, biodegradable plastics are expected to transition from niche to mainstream in Canada’s markets.

Introduction

Biodegradable plastics are polymers designed to break down naturally into water, carbon dioxide, and biomass through microbial activity. In Canada, these materials are increasingly being used to replace traditional plastics in packaging, agriculture, and disposable products. Popular biodegradable materials include polylactic acid (PLA), polyhydroxyalkanoates (PHA), starch-based plastics, and cellulose blends. The rise of eco-conscious consumers, combined with strong regulatory pressure to reduce plastic pollution, is fueling adoption. These materials provide a pathway to balance functionality with environmental responsibility.

Future Outlook

By 2031, biodegradable plastics in Canada are expected to see widespread use across packaging, agriculture, and consumer products as industries align with sustainability goals. Continuous R&D will improve cost efficiency, heat resistance, and strength, making them competitive with petroleum-based plastics. With governments supporting circular economy initiatives, biodegradable plastics will become a mainstream choice for retailers and manufacturers. Expansion of composting and waste management infrastructure will further support market penetration. Partnerships across industries will ensure scalability and innovation remain at the forefront.

Canada Biodegradable Plastics Market Trends

• Rising Demand for Sustainable Packaging
  In Canada, the packaging industry is leading adoption of biodegradable plastics due to growing consumer awareness and retailer commitments to sustainability. Companies are introducing compostable films, trays, and bags to replace single-use plastics. E-commerce and food delivery platforms are adopting eco-friendly packaging to enhance their brand value. Regulatory pressure further supports this transition toward biodegradable materials. This trend is set to dominate as packaging continues to be the largest application sector.

• Expansion of Biodegradable Agricultural Applications
  Biodegradable plastics are being increasingly used in Canada’s agricultural sector for mulch films, greenhouse covers, and plant pots. These materials reduce soil pollution by breaking down naturally after use, avoiding the disposal issues of conventional plastics. Farmers are adopting biodegradable films to enhance crop yield and reduce labor costs related to plastic removal. Government incentives are further encouraging adoption in rural economies. Agriculture is becoming a significant contributor to demand growth in Canada.

• Technological Advancements in Biopolymers
  Innovations in PLA, PHA, and starch blends are improving the mechanical strength, heat resistance, and flexibility of biodegradable plastics in Canada. These advancements make them suitable for a wider range of industrial and consumer applications. Research institutes and companies are collaborating to commercialize new blends that reduce production costs. These innovations are also enabling compatibility with existing plastic processing equipment. As performance improves, biodegradable plastics will capture a larger share of conventional plastic markets in Canada.

• Growing Circular Economy Initiatives
  In Canada, governments and corporations are investing heavily in circular economy strategies, emphasizing recycling, composting, and waste reduction. Biodegradable plastics fit into this model by providing materials that integrate into organic waste streams. Municipalities are expanding composting infrastructure to support large-scale adoption. Retailers are promoting biodegradable alternatives as part of their sustainability branding. This trend is accelerating the mainstream use of biodegradable plastics across industries in Canada.

• Collaborations and Strategic Partnerships
  Strategic partnerships between chemical manufacturers, packaging companies, and retailers in Canada are accelerating commercialization of biodegradable plastics. Joint ventures are helping to build local supply chains and reduce reliance on imports. Collaboration is also fostering the development of specialized applications, such as medical packaging and consumer goods. These partnerships are essential for scaling production while maintaining innovation. They will continue to shape the competitive landscape of the market in Canada.

Market Growth Drivers

• Stringent Environmental Regulations
  Governments in Canada are implementing strict regulations and bans on single-use plastics to combat pollution. This is creating a favorable environment for biodegradable plastics as they provide compliant alternatives. Policy support includes subsidies, incentives, and public procurement mandates. Regulatory frameworks are encouraging businesses to adopt eco-friendly packaging. Such government actions remain one of the strongest drivers for market adoption in Canada.

• Rising Consumer Awareness and Demand
  In Canada, consumers are becoming increasingly aware of environmental issues caused by plastic waste. This is fueling demand for biodegradable alternatives in packaging, retail, and food service industries. Brands that adopt biodegradable plastics are gaining consumer trust and loyalty. Social media campaigns and sustainability-focused marketing are amplifying this trend. Growing consumer activism is expected to be a long-term driver of adoption in Canada.

• Growth of Food and Beverage Industry
  The food and beverage sector in Canada is rapidly shifting toward biodegradable packaging for takeaway, delivery, and retail purposes. Companies are adopting compostable trays, straws, and cutlery to meet consumer and regulatory demands. This trend is being supported by the expansion of quick-service restaurants and online food delivery. Food retailers are also under pressure to demonstrate sustainability practices. The strong growth of this sector directly fuels demand for biodegradable plastics in Canada.

• Technological Improvements in Production Processes
  In Canada, advances in polymer chemistry and industrial processing are reducing the cost of producing biodegradable plastics. These innovations are improving scalability while enhancing performance. Compatibility with conventional manufacturing equipment is lowering barriers for companies to transition. This technological progress is expanding the application scope of biodegradable materials. It also ensures long-term competitiveness against petroleum-based plastics in Canada.

• Supportive Circular Economy Policies
  Circular economy initiatives in Canada are prioritizing resource efficiency, waste reduction, and recycling. Biodegradable plastics are well-aligned with these policies as they naturally decompose into biomass. Municipalities are investing in composting facilities to support this transition. Businesses adopting biodegradable solutions are also benefiting from favorable policies and funding. The alignment with circular economy frameworks is creating strong demand growth in Canada.

Challenges in the Market

• High Cost of Production
  Biodegradable plastics in Canada remain significantly more expensive to produce compared to conventional plastics. The reliance on agricultural feedstocks and specialized processes adds to overall costs. These higher prices limit adoption across price-sensitive industries. While technological improvements are reducing costs gradually, affordability remains a key challenge. Achieving parity with traditional plastics will be crucial for large-scale adoption in Canada.

• Limited Industrial Composting Infrastructure
  Despite growing demand, the lack of industrial composting facilities in Canada limits the proper disposal of biodegradable plastics. Without the right environment, many biodegradable materials fail to degrade efficiently. This creates skepticism about their real environmental benefits. Governments and municipalities must invest heavily in waste management systems. Until infrastructure expands, the market will face limitations in scaling adoption.

• Performance Limitations Compared to Conventional Plastics
  Biodegradable plastics often lack the same level of heat resistance, durability, and barrier properties as petroleum-based plastics in Canada. These performance gaps restrict their application in high-demand industries such as electronics and heavy packaging. Research is addressing these limitations, but challenges remain. Customers may be hesitant to switch unless performance is comparable. This remains a restraint on broader adoption across Canada industries.

• Competition from Other Sustainable Materials
  In Canada, biodegradable plastics face competition from recyclable plastics, paper-based packaging, and aluminum. Companies may choose these alternatives if they are cheaper or have established recycling infrastructure. This competitive environment reduces the pace of adoption. Biodegradable plastics must demonstrate clear advantages to capture market share. The competition will continue to pose challenges as sustainability solutions diversify in Canada.

• Dependence on Agricultural Feedstocks
  Production of biodegradable plastics in Canada depends heavily on feedstocks like corn, sugarcane, and starch. This creates pressure on agricultural resources and raises concerns about food security. Fluctuations in crop prices directly affect production costs. Expanding demand could intensify the food-versus-plastics debate in Canada. Developing second-generation feedstocks will be critical to overcoming this long-term challenge.

Canada Biodegradable Plastics Market Segmentation

By Type

• Polylactic Acid (PLA)

• Polyhydroxyalkanoates (PHA)

• Starch-Based Plastics

• Cellulose Blends

• Others

By Application

• Packaging

• Agriculture

• Consumer Goods

• Textiles

• Others

By End-User Industry

• Food & Beverage

• Agriculture

• Retail & E-commerce

• Healthcare

• Others

Leading Key Players

• BASF SE

• NatureWorks LLC

• Mitsubishi Chemical Group

• Total Corbion PLA

• Novamont S.p.A.

• Biome Bioplastics Ltd.

• Green Dot Bioplastics

• Danimer Scientific

• Futerro SA

• Cardia Bioplastics

Recent Developments

• BASF SE expanded its biodegradable plastics production capacity in Canada to meet rising demand in packaging.

• NatureWorks LLC launched new grades of PLA tailored for food and beverage applications in Canada.

• Mitsubishi Chemical Group partnered with local packaging companies in Canada to develop compostable materials.

• Total Corbion PLA announced investment in biopolymer R&D centers in Canada for product innovation.

• Novamont S.p.A. collaborated with retailers in Canada to introduce compostable shopping bags.

This Market Report Will Answer the Following Questions

1. What is the projected size and CAGR of the Canada Biodegradable Plastics Market by 2031?

2. How are government regulations in Canada shaping demand for biodegradable plastics?

3. Which sectors, such as packaging and agriculture, are driving the most adoption in Canada?

4. What are the major challenges related to costs, infrastructure, and competition in Canada?

5. Who are the leading players driving innovation and expansion in Canada’s biodegradable plastics market?