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SCOTT JAGOW: You're probably aware that most of the plastic in this country is made from petroleum, a nonrenewable source. But it doesn't have to be. A company in Washington County, Nebraska is making plastic out of corn. From the Marketplace Sustainability Desk, Sarah Gardner reports.

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SARAH GARDNER: When you walk into Cargill's NatureWorks plant in the small town of Blair, Nebraska, it smells a bit like a brewery.

CAREY BUCKLES: "Because you've got to remember, we're fermenting dextrose with microbes and adding nutrients and things and it kind of has that smell to it."

Plant manager Carey Buckles walks me through the manufacturing process, from corn sugar to lactic acid to a polymer called polylactic acid or PLA. Corn-based PLA is an alternative to some conventional plastics and is now used to make everything from deli containers to candy wrappers.

Cargill touts this bioplastic as environmentally friendly. Not only is the company's PLA made from a renewable resource, corn, but it's also biodegradable. And the whole process, the company claims, consumes up to 68 percent less fossil fuel than conventional plastic making. Now, Wal-Mart is packaging some of its fresh cut produce in clear containers made of Cargill's PLA. NatureWorks CEO Dennis McGrew.

DENNIS MCGREW: "Wal-Mart's announcement certainly has helped convince folks that we are real. But it also reinforces the fact that we are cost competitive. Clearly Wal-Mart is a large buyer and they've been able to do this without impacting their cost position negatively."

Wal-Mart's decision to go with corn-plastic has also expanded business for a small company just down the road in Fort Calhoun. Wilkinson Industries takes Cargill's corn plastic resin and molds it into those food containers Wal-Mart uses. Vice president of research and development Ray Massey Jr. says investing in bioplastics has paid off.

RAY MASSEY JR: "It has definitely got us notoriety that all the money in the world paying for publicity couldn't buy."

Wal-Mart and Wild Oats markets are just two of the retailers now using PLA food packaging. European grocers are customers as well but other retailers have begged off. Green business strategist Joel Makower says that's because much of the corn Cargill uses is genetically modified.

JOEL MAKOWER: "The genetically modified organisms don't end up in the PLA. But this has been a market barrier to a lot of companies. There are a lot companies saying, we don't want to touch that for fear of being accused of selling 'Frankenproducts."

NatureWorks now offers anti-GMO customers some options to ease their consciences. For an extra fee, they can buy offsets and Cargill will buy an equivalent amount of non-GMO corn.

In Blair, Nebraska, I'm Sarah Gardner for Marketplace.