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How the fossil fuel industry is pushing plastics on the world


Energy transition underway. The grid is becoming greener and renewable power, as well as electric cars, are cheaper. Oil and gas companies have become nervous.

The fossil fuel industry giants have begun to look towards plastics and petrochemicals as their next big growth area.

“Plastics, the Plan B of the fossil fuel industry,” declared Judith Enck. She is also the President and Founder of this non-profit advocacy organization. Beyond Plastics.

Plastics (which are made of fossil fuels) will account for nearly half the oil demand growth through midcentury according to the International Energy Agency.This surpasses sectors such as shipping and aviation, which are notoriously difficult to decarbonize.

Ramesh Ramachandran is the CEO of Ramesh Ramachandran. No Plastic WasteMindaroo Foundation has launched, an initiative that aims to establish a market-based system for creating a circular plastics industry.

But much of the industrialized world is already saturated with plastics. To drive their growth, fossil fuel and chemical companies rely on the emerging economies of Asia and Africa.

The developing world is flooded with plastic

Wood Mackenzie’s Alan Gelder predicts that there will 10 million tons per year growth in demand for petrochemicals. These chemicals are essential to the production of plastics. Much of this will go overseas, he says.

We don’t expect demand growth to the U.S. but this could be the place where facilities are built to meet global demand.”

At a Serbian recycling centre, a sanitary worker helps with plastic bottle influx

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United States are a major producer and exporter, alongside Middle Eastern oil giants, such as Qatar, Saudi Arabia, UAE and Saudi Arabia. These plastic building blocks are mainly imported from Asia, but also China.

Enck says that plastic is not what consumers really want.

In fact, Ipsos surveyed over 19,000 adults and found this. 71% of consumers worldwide want to ban single-use plastics.

Although plastics may not be popular right now, they are still very common.

Gelder stated that petrochemicals were “fantastically good” at their job in light flexibility, durability and versatility. They are also the most affordable option, thanks to subsidies from fossil fuels.

Problem is, most plastic end up in landfills or being littered on land and sea. Only 9% of all plastic ever made has been recycledThis is because virgin plastic tends to be the best option.

China once profitably recycled a lot of the plastic in the world. But, China stopped accepting plastic waste imports from 2018 as much of it was not suitable for reuse. This waste has been diverted to less developed countries. don’t have the infrastructure It can be used to recycle or process it

In 2019, Africa witnessed a quadruple increase in plastic waste imports, the same year China shut its doors. The plastic also made its way into India and Thailand. The U.S., however, is still sending its waste there anyway.

Harmful results

Protest signs against the construction of Formosa Plastics’ petrochemical plant in St. James Parish. Louisiana

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Lavigne stated that he discovered it was the plants which were poisoning him, making them sick, and most importantly, with cancer. “Then I discovered that they do not hire anyone from Saint James when they arrive here.”

Rise St. James was founded by Lavigne in 2018 with the aim of stopping petrochemical growth. This organization stopped construction of Wanhua Chemical’s $1.25 Billion plastics plant. It is fighting To stop Formosa Plastics building a plant within the fifth district where Lavigne resides. But, the project looks set to proceed. 

The fifth district is 91% Black.

They once wanted to plant a new facility in the white region, and it was rejected by a parish council. Lavigne explained that the parish council voted no. She said she approved similar plants in the 5th region, however.

Climate-focused think tank Carbon TrackerEstimates suggest that plastics production has externalities that range from $800 to $1400 per metric ton. This includes the cost of CO2 emissions and air pollution as well as waste management and cleanup efforts.

An uncertain future

Even though producers are preparing for growth there are signs that plastics will not save the fossil fuel sector.

You can find one here the EU Directive on Single-Use PlasticsIt was recently implemented in Europe and aims to significantly reduce virgin plastic production.

This mandates all PET plastic bottles to contain at least 25% of recycled content. The legislation also prohibits single-use products.

Ramachandran believes that the global changes to plastic packaging will result in a shift in how they are made.

“I believe within a year maximum, two, in Europe, there will be mandatory recycled content on all packaging. Once that occurs, it will look like California’s mileage standards. There is no way people will have two different packages, one for Europe and the other for any part of the globe. It would certainly spread to other parts of the world, I believe.

Maine and OregonEPR laws have been introduced that require plastics manufacturers to pay for recycling programs. California and New York are also considering this move.

Corporate change is also evident. More than a dozen corporations are showing signs of change ahead UN Environment Assembly conference. 70 companies called for a global pactTo reduce plastics production, and to decouple fossil fuels from it. AMCOR, the world’s biggest plastic packaging manufacturer, was among those who signed.

ExxonMobil nor Dow DuPont will change, but I don’t think so. Enck indicated that he expects big companies who buy all the plastic packaging to be more innovative.

Last but not least, plastics represent a far smaller market than oil or gas. Just 1% of all petrochemicals were included. 13% of ExxonMobil’s revenue in 2020And 6.5% of Shell’s 2020 revenue.

Gelder explained, “So you can say we suddenly stop driving gasoline-fueled passenger vehicles and try to divert that material towards petrochemicals. Then you just arguably swamped the petrochemical marketplace and reduce its attractiveness, profitability.”

The plastics sector is simply too small for oil and gas companies to survive, even though demand continues to rise.

Plastics may benefit from the tremendous power of fossil fuel lobby but the size of the petrochemical and corporate attempts to reduce new plastic production mean that the odds of success for the oil-and-gas industry betting on plastics could not be as good.

You can watch the video for more information.