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Biodegradable generally refers to products that can be broken down by natural processes and biological organisms, including invertebrates, fungi, and bacteria. Until recently, consumer appreciation of the issues behind biodegradability was limited for a number of reasons. The proliferation of terminology and the complexity of the different processes involved prevented the general public from engaging with this feature of sustainable practice. As a result of this lack of understanding, the purchase decision-making process had not been duly influenced by considerations of the lifecycle of products or packaging, and the possibilities of reuse or recycling. However, as the related terminology—degradable, biodegradable, and compostable—entered more general use, consumer awareness of the terms grew, though consumers still lacked a complete understanding. This has been stimulated by government campaigns encouraging more household recycling, coupled with local government recycling plans and curbside collections. Retailer and consumer lobbying actions, particularly those concerning packaging and the reduction of single-use plastic bags, together with increasing media attention have also contributed to greater consumer engagement.

Consumer confusion toward biodegradable material results from the use of terms without proper explanation or communication to inform and educate the public. Recyclable, degradable, biodegradable, compostable, and home compostable are terms all currently used by manufacturers, but studies in the United Kingdom indicated that just 52 percent of the population are aware of biodegradable plastic packaging and only 15 percent are aware of compostable packaging, which also implies that consumers would not know how to dispose of the different materials. Only 10 percent of those surveyed always looked for disposal information on packaging, while 55 percent never read disposal information. Consumer knowledge of the potential negative effects of biodegradable and compostable plastics is also lacking. For consumers, the terms imply that the material just disappears without them having to consider the fossil fuels and energy that are used in their production, or the consequences of their breakdown in the environment, which may result in carbon dioxide, methane or metal toxins being released into the ground, water or air.

When better informed of the consequences of biodegradability and the options for disposal or recycling, evidence suggests that consumers are willing to take action to avoid negative consequences, such as avoiding sending such material to landfills, particularly to avoid the production of methane, a more potent greenhouse gas than carbon dioxide. Biodegradable bags tend to be less strong than other alternatives, and can result in consumer dissatisfaction when they break or tear during use. When given the informed choice between biodegradable and home compostable, more consumers are in favor of composting at home, which may lead to establishing clearer standards for composting, such as the European standard EN 13432.

Consumer mobilization in different areas has led to usage reduction or elimination of all types of plastics: nonbiodegradable, biodegradable, and degradable plastics. For example, in 2006 the Women's Institute of the United Kingdom held a Packaging Day of Action, urging members to demand the removal of unnecessary and excessive packaging on food products, and to use only compostable and recyclable materials where packaging was required.

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