Frost & Sullivan has presented a new report titled "European Markets for
Naturally-Reinforced Plastic Composites", in which it shows that plastics
containing a certain fraction of biobased materials are becoming
cost-competitive in the EU.
The report provides information on the technical and market developments in
the markets for naturally reinforced plastic composites in decking,
insulation and automotive applications. The research zooms in on the
following technologies: wood plastic composites and natural fibre
composites, including flax and hemp fibres in sectors including the
automotive, building, sports equipment and aeronautical industries.

Due to escalating oil prices, any technology that reduces the dependence on
oil has a fighting chance. Although naturally reinforced plastic composites
(NRPC) have plastic in their composition, their use limits the amount of it
necessary to manufacture a certain product. There have also been efforts to
decrease the amount of oil-derived content. NRPC are going to remain a
competitive technology to replace oil-based materials, as wood and natural
fibre prices are unlikely to grow faster than oil prices. Not all ?green?
technologies are cost-competitive, like renewable energy, which remains
fairly expensive. This factor is, therefore, a strong driving force in the
NRPC market.

NRPC help lower the dependence on oil while remaining cost-competitive. The
current penetration of wood plastic composites (WPC) in decking and natural
fibre composites (NFC) in the automotive segment remains below 10 per cent,
with further potential to increase it. - Frost & Sullivan

However, users of NFC have concerns over the available capacity and the
effect of a drastic reduction in European agricultural subsidies. WPC
products vary greatly in quality and without a global standard, consumers
have difficulties distinguishing low-quality products from top range ones.

Potential further market penetration

Both the environmental benefits and cost competitiveness of NRPC give these
materials the capacity to replace plastic or non-renewable reinforcements.
The main market segments for NRPC in 2008 are automotive, building and
technical parts. Market penetration of WPC in their main application,
decking, is less than 5 per cent. Many participants consider that the
penetration of WPC could go up to 15 per cent, similar to the U.S. decking
market:

The penetration of NFC in automotive applications is slightly higher, but
continues to be below 10 per cent. Companies involved in the automotive NFC
market think that from now on it would be more difficult to increase market
penetration in this sector, since most OEMs already use them. However, while
the NFC automotive market is developed in Europe, other regions could
provide more growth. Moreover, most OEMs use NFC in just one model and good
performance would encourage them to implement its use more widely.

Growth opportunities abound for NRPC in Europe. Ultimately, however,
suppliers will have to concentrate on raising public awareness and product
development to boost market penetration in existing segments and open up new
opportunities. If injection-moulded parts made with NRPC are successful, the
potential for market penetration will certainly increase, as the number of
possible applications will grow significantly.

Raising public awareness will be key in the development of NRPCs. By
providing more information to end users on their capabilities and to the
general public on their environmental advantages, market participants will
increase demand. - Frost & Sullivan

Major WPC participants are already working on product branding and the
implementation of global standards. In anticipation of future market
demands, NRPC market participants are developing new materials, using
thermoset resins and even bioplastics, and new processing techniques, like
injection moulding.

References:
MarketWatch: Naturally Reinforced Plastic Composites Emerge as a
Cost-competitive Green Technology in European Markets - July 1, 2008.
www.checkbiotech.org