How the fossil fuel industry is pushing plastics on the world
We’re in the midst of an energy transition. Renewable power and electric vehicles are getting cheaper, the grid is getting greener, and oil and gas companies are getting nervous.
That’s why the fossil fuel giants are looking towards petrochemicals, and plastics in particular, as their next major growth market.
“Plastics is the Plan B for the fossil fuel industry,” said Judith Enck, Founder and President of the nonprofit advocacy group Beyond Plastics.
Plastics, which are made from fossil fuels, are set to drive nearly half of oil demand growth by midcentury, according to the International Energy Agency. That outpaces even hard-to-decarbonize sectors like aviation and shipping.
“Every company who is currently engaged in producing plastic, if you look at their capital budgets for the next two to three years, they’re all talking about expansion plans,” said Ramesh Ramachandran, CEO of No Plastic Waste, an initiative from the Mindaroo Foundation that’s working to create a market-based approach to a circular plastics economy.
Yet much of the developed world is already awash in plastics. So fossil fuel and petrochemical companies are relying on emerging economies in Asia and Africa to drive growth.
Plastic floods the developing world
Alan Gelder of Wood Mackenzie forecasts that every year through 2050, there will be 10 million metric tons of growth in the market for petrochemicals, which are used to make plastics and other products. He says much of that will be shipped overseas.
“We’re not expecting demand growth in the U.S., but it could be where the places where facilities get built to satisfy global demand growth.”
A sanitary worker deals with an influx of plastic bottles at a recycling center in Serbia
Getty Images
Alongside Middle Eastern oil giants like Qatar, Saudi Arabia and the UAE, the United States is a leading producer and exporter of plastic feedstocks and polymers. Asia in general, and China specifically, are the largest importers of these plastic building blocks.
But Enck doubts consumers actually want more plastic “So what is driving this, is just this glut of fracked gas and the fossil fuel industry teaming up with the chemical industry to just crank out more and more plastic.”
Indeed, an Ipsos survey of over 19,000 adults found that 71% of consumers worldwide want to ban single-use plastics.
As unpopular as they may be today, however, plastics became ubiquitous for a reason.
“Petrochemicals are fantastically good at what they do in terms of lightweight flexibility, durability, versatility,” Gelder said. And thanks in part to fossil fuel subsidies, they’re also generally the cheapest option available.
The problem is that most plastic ends up languishing in landfills, or as litter on the land or sea. Only 9% of all plastic ever made has been recycled, because generally, making virgin plastic is the cheapest option.
China used to profitably recycle much of the world’s plastic, but stopped accepting plastic waste imports in 2018, since much of it was…
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