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% in the next five years, according to European Bioplastics in Berlin, an association whose members include Cargill and Mitsubishi Chemical Holdings, German chemical giant BASF and the Finnish paper maker Stora Enso have stepped in to the business to meet demand from the likes of Coca-Cola to Lego. "Biochemicals and bioplastics could erode a portion of oil demand, much like recycling could erode overall virgin plastics demand," said Pieterjan Van Uytvanck, a senior consultant at Wood Mackenzie, a research group focused on the oil industry. "It will become a larger portion of the supply." Movie-goers famously learned in the 1967 film The Graduate that "there’s a great future in plastics". Oil companies make ethylene and other bas...

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