Polyethylene terephthalate (PET) is primarily used is packaging applications of food and beverages. It is used to package water, soft drinks, alcoholic beverages, and food among others. The demand for PET has been surging at a robust growth rate of more than 9%, with its estimated global annual demand of more than 50 million tons per year. However as polyethylene terephthalate is a downstream derivative of crude oil, the market is susceptible to the price volatility of crude oil.

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Moreover, the growing public consciousness coupled with environmental sustainability factors has led to the development of bio-based polyethylene terephthalate. Bio-based PET utilizes chemical intermediates which reduce the dependence on petroleum resources. Bio-based PET is at a nascent stage in the market, and is commercially available as partially bio-based product. Most of the bio-based PET available in the market is manufactured from bio-based ethylene glycol. However most of the market is still dominated by traditional PET, utilizing fossil fuel, while bio-based PET accounts for about 40% of the global bio plastics production capacity. The share of bio-based PET in bio plastics production is expected to rise astronomically in the foreseeable future.

Government initiatives have been undertaken to reduce carbon emission. The American Chemistry Council recently launched a bio-based chemistry network; in order to educate policy makers to draft effective regulatory programs for the high growth bio-based chemical industry. The popular craving for green plastics is another growth driver, as green packaging is marketed as an USP by several companies to attract customers. Coca Cola introduced a concept called plant bottle, which essentially focused on bio-based PET and promoted environmental consciousness among consumers. The company has plans to replace PET bottles by plant bottles by the year 2020. The volatility of crude oil prices also indirectly affected the cost of production of PET. Lower cost technologies and increasing manufacturing capacities have substantially increased the market attractiveness of bio-based PET. Most of the bio-based PET is manufactured by fermentation of agricultural feed stocks such as sugarcane, corn and rice hull. The introduction of innovative technologies for the production of bio-based PET is also expected to propel the market for bio-based PET.

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Although bio-based PET is an environmentally sustainable alternative to traditional PET, according to some experts, even though the climate impact of bio-based PET scores well, some other environmental factors are not taken care of. According to them the farming and processing of the plants that are used as raw materials for the production of bio-based PET, cause severe acidification of the soil and ground water, and adversely affects the environment.

Europe and North America leads the research and development of bio-based PET, while Europe accounts for the largest market share of the product followed closely by North America.. The manufacturing base of bio-based PET has shifted to Asia Pacific and South America due to the favorable and cost effective manufacturing scenario in the region. The consumption of bio-based PET is expected to grow at the swiftest pace in Asia Pacific in the foreseeable future.

Some of the leading companies involved in the manufacturing of bio-based PET products are FMCG brands such as Coca Cola, Pepsico, and Danone. Other manufacturers include Anellotech, Inc.,Gevo, Inc., Draths Corporation and Virent, Inc. among others.