BDO Consumption Under Policy-Driven PBAT Mulch Film Promotion

In the process of managing agricultural film residual pollution in China, biodegradable mulch film with PBAT as the core raw material has become an important solution. Its promotion is closely related to comprehensive policy support. Against this background, the growing demand for PBAT mulch film will directly drive the consumption of the upstream raw material 1,4-butanediol (BDO), making its scale changes worthy of attention.

Image: Biodegradable Mulch Film Image Source: 1688

Policy System Construction and Promotion Support

At the policy level, a full-chain driving mechanism has been established, encompassing legal protection, financial subsidies, and scientific research efforts. In terms of laws and standards, the 2018 Law on the Prevention and Control of Soil Pollution explicitly encourages the use of biodegradable agricultural films. The 2020 Administrative Measures for Agricultural Films regulate market order, while the national standard "Fully Biodegradable Mulch Film for Agricultural Use" (GB/T35795-2017) sets quality thresholds from the perspective of technical indicators.

Substantial reduction in funding subsidies lowers the application threshold. The central government provides a basic subsidy of 60 yuan per mu, and local overlapping policies further strengthen incentives: the total subsidy in Yuyao, Zhejiang reaches 200 yuan per mu, while in Ningcheng County, Chifeng City, Inner Mongolia, and Guan County, Shandong, it reaches 170 yuan per mu and 168 yuan per mu, respectively. In terms of scientific research support, the special fund for the "14th Five-Year Plan" national key R&D program does not exceed 70 million yuan, focusing on tackling key technologies such as low-cost modification of PBAT. Demonstration projects promoted by the Science and Technology Development Center of the Ministry of Agriculture and Rural Affairs have formed replicable solutions.

Current Status of PBAT Mulch Film Promotion and Production Capacity Foundation

Driven by policies, PBAT mulch film has been piloted in more than 20 provinces and cities across the country, covering a variety of crops such as corn and tomatoes. In 2024, the total annual mulching area nationwide will be nearly 3 million mu. Based on a usage rate of 6.5 kilograms per mu, the annual consumption will be 19,500 tons, with PBAT accounting for 80%, resulting in an annual consumption of approximately 15,600 tons.

The industry's supply capacity has been simultaneously enhanced. In the first half of 2025, China's PBAT production capacity will exceed 1.6 million tons per year, with stable supply from enterprises such as Kingfa Sci. & Tech., Lanshan Tunhe, Ruian Bio, Hubei Yihua, and Donghua Tianye. The market price in East China has dropped to 9,400-10,100 yuan per ton, a significant decrease compared to 30,000 yuan per ton in 2021, laying the foundation for large-scale substitution.

BDO Consumption Scale Estimation

In PBAT production, BDO is the core raw material, and 0.53 tons of BDO are consumed per ton of PBAT. Currently, the annual consumption of PBAT in the biodegradable film sector is 15,600 tons, corresponding to an annual BDO consumption of approximately 8,268 tons.

China is a major user of mulch film, with an annual consumption exceeding 1.45 million tons and a coverage area reaching 250 million mu. Under continued policy promotion, if the coverage area of biodegradable mulch film reaches 50% of the total mulch film area (i.e., 125 million mu), and assuming a usage rate of 6.5 kilograms per mu, the annual demand will reach 812,500 tons. Correspondingly, the demand for PBAT will be 650,000 tons, which will drive the annual consumption of BDO to approximately 344,500 tons, representing an increase of more than 40 times compared to the current scale.

It should be noted that from a policy orientation perspective, the Ministry of Agriculture and Rural Affairs, in response to the suggestions from the National People's Congress, explicitly proposed the "scientific, prudent, and orderly promotion" of fully biodegradable mulch film, emphasizing the need to "focus on suitable regions and suitable crops," rather than pursuing comprehensive coverage.

The practice of the Liaoning Provincial Department of Agriculture and Rural Affairs also demonstrates that its promotion strategy follows the path of "suitability trials → core demonstration zones → gradual expansion." In 2024, it issued the "Guidance on Full Biodegradable Mulch Film Trials," emphasizing the need to "gradually clarify the degradation process in the field." This cautious approach is reflected in specific data: in Yunyang District, Hubei Province, the plan for 2024-2025 is to promote full biodegradable mulch film on only 20,000 mu, with 10% of the area required to serve as core demonstration zones for effectiveness verification.

According to the current policy pace, and referencing the Ministry of Agriculture and Rural Affairs' progress in establishing 19 evaluation and application bases across 12 provinces, the coverage rate of biodegradable mulch film is likely to gradually increase to 20%-30% within the next 5-8 years. Based on this estimate, the annual demand for mulch film would be approximately 325,000-487,500 tons, with a corresponding PBAT demand of 260,000-390,000 tons, which would drive an annual BDO consumption of 137,800-206,700 tons. This represents a 16-25 fold increase from the current scale, aligning more closely with the "scientific and prudent" policy orientation.

Supply and demand challenges in the industrial chain

The current PBAT industry exhibits the characteristics of "overcapacity alongside demand growth." In the first half of 2025, export volume increased by 65.48% year-on-year, but the domestic operating rate was only 10-20%. With the orderly advancement of mulching film promotion according to policy plans, BDO, as a key upstream raw material, needs to align with this gradual growth pace.

The Ministry of Agriculture and Rural Affairs has clearly stated that it will "strengthen the tracking and research of new products and new technologies," guiding local regions to "scientifically promote suitable crops in appropriate areas." This refined management approach will help avoid drastic fluctuations in the supply and demand of the industrial chain, providing a relatively stable market expectation for the BDO industry.