The San Francisco Board of Supervisors’ vote last month to institute the first ban on polyethylene shopping bags in the United States may reduce the volume of plastic in landfills, but, despite many advocates’ hopes, it is unlikely to dramatically reduce dependence on imported oil. That’s because most biodegradable plastic bags (which San Francisco officials hope will take polyethylene’s place) rely on a petroleum-based form of polyester.

San Francisco’s ban will, however, create an important new market for biodegradable plastics that could bring plastics based on renewable feedstocks into the market. The best hope may be Metabolix, based in Cambridge, MA, which last year completed a $95 million initial public offering and signed a joint venture with agribusiness giant Archer Daniels Midland (ADM) to develop its corn sugar-based biodegradable polymer.

Standard polyethylene bags have multiplied (San Franciscans alone use 181 million a year) because they are cheap and easy to use. They also produce less pollution in their manufacture than paper bags do. Until recently, biodegradable plastic bags have cost at least three times more and fallen short on performance, but the picture has changed over the past decade. “Today you’ve got some products that work from a functionality standpoint–the price gap has come way down,” says Keith Edwards, biopolymers business manager in North America for German plastics and chemicals giant BASF.

Most biodegradable plastic bags are produced by blending plant starch with petroleum-based polyesters, which improves the bag’s strength and processibility with conventional film equipment. Leading producers are BASF and Italian polymers firm Novamont. Edwards estimates that biodegradable bags from these polymers could cost three to four cents more than the one-to-two-cents-per-bag cost of polyethylene. But he’s betting that San Francisco consumers will demand them thanks to San Francisco’s curbside organic-waste recycling program.

San Francisco’s environmental officials are making the same bet. Currently, the program collects about 300 tons of food per day, contributing to a 67 percent recycling rate for its municipal waste overall. But that number must rise significantly if the city is to meet a self-imposed goal to recycle 75 percent of its waste by 2010.

BASF recently boosted capacity for its biodegradable resin from 8,000 metric tons to 14,000 metric tons per year. Overall, the company expects annual production of biodegradable and bio-based polymers to triple or quadruple by 2010 from an estimated 50,000 tons produced worldwide in 2005. Meanwhile, Novamont plans to scale up a process for producing its biodegradable form of polyester from vegetable oils; it could begin within the next two years.

Metabolix expects that the first dedicated production plant for its polyhydroxyalkanoate (PHA) polymer will begin generating up to 110 million pounds of the natural polyester per year next year. The plant, which ADM is building adjacent to its Clinton, IA, corn wet mill, uses corn sugar to feed fermentation vessels filled with bacteria that have been genetically engineered by Metabolix to produce the polymer. Corn stocks will be burned to power the process. “We’ll reduce greenhouse-gas emissions by about two-thirds and petroleum usage by about 80 percent compared to traditional petroleum-based plastics,” says Metabolix vice president Brian Igoe.

Igoe says PHA will break down without the high temperatures found in industrial composting facilities. That means that bags or other products made from Metabolix’s polymers will degrade if they drift into wetlands or the ocean. “We’re not saying that our products are environmentally disposable–nobody would encourage that solution–but the reality is that we have very leaky collection systems,” Igoe says. He adds that those environmental benefits are central to Metabolix’s marketing plan because Metabolix’s polymer will cost three times as much as petroleum-based polymers.

But in many applications, including PHA-based bags that Igoe says could hit the market by the end of this year, the user will be willing to pay a premium. He thinks that many consumers are ready to do so–especially if they get to keep the convenience of plastic they’ve grown accustomed to. “Plastic bags are very functional,” says Igoe. “If you have a bag that has the environmental benefits we have, you’re going to see a lot more usage. There’s definitely a group of people out there willing to pay for cleaner and greener solutions.”

Ironically, just as biodegradable plastics are matching the performance of conventional plastics and finding willing markets, the success of biofuels is creating a new challenge: a rapidly rising demand for corn sugar. The use of corn sugar to produce ethanol has boosted food prices, doubling, for example, the price of tortillas in Mexico and sparking street protests. (See “Ethanol Demand Threatens Food Prices.”) Manufacturers of food-based plastics such as Metabolix could see their costs rise too. They might have to price the petroleum-free bag beyond what even San Francisco’s green buyers will pay.