Bioplastics a hurdle to oil sector's plans to expand into plastics

London

COMPANIES that make packaging from plants instead of fossil fuels are starting to challenge the oil industry's ambition to increase the supply of raw materials for plastics.

Use of bioplastics made from sugar cane, wood and corn will grow at least 50 per cent in the next five years, according to the European Bioplastics Association in Berlin, whose members include Cargill Inc and Mitsubishi Chemical Holdings Corp. German chemical giant BASF SE and the Finnish paper maker Stora Enso Oyj have stepped into the business to meet demand from the likes of Coca-Cola Co to Lego A/S.

"Biochemicals and bioplastics could erode a portion of oil demand, much like recycling can erode overall virgin plastics demand," said Pieterjan Van Uytvanck, a senior consultan…