Oil industry inserting risky wager on plastics: report
06 September, 2020
Big oil producers are pinning their future growth on the world's insatiable appetite for plastic, researchers say, in a "bet" on society's failure to tackle disposable consumption that risks stranding vast amounts of dollars in petrochemical investments.
The industry has faced increasingly urgent questions lately about whether "peak" oil demand has been reached, with the coronavirus pandemic resulting in a dramatic drop in transport fuel consumption, while cleaner energy makes ever greater headway.
But oil producers now see plastics as the largest driver of future demand, according to a fresh report by financial think tank Carbon Tracker and sustainability and development group Systemiq.
Plastic production has increased around four percent each year since 2000, the report said, adding that a lot of firms in the industry may actually expect that rate of growth to keep, driven mainly by emerging economies.
Plastics currently constitute significantly less than nine percent of oil demand, however the report said they will be the largest element of oil demand growth.
It said the industry now plans to get at least $400 billion (337.8 billion euros) within the next five years to expand supply for so-called virgin plastics by 25 %, but warned that risked huge losses for investors.
"The plastics industry, in its assumption of a doubling of demand for plastics within the next 10, 20 years roughly, is making a guess that society will neglect to find any answers to reduce, substitute or recycle plastic," said report author Kingsmill Bond, energy strategist at Carbon Tracker.
He told AFP that it was an "unreasonable assumption to imagine that you could keep on doing for another 50 years what you've done going back 70 years, which is polluted with impunity".
Some 350 million tonnes of plastic are produced annually -- about half in Asia, 19 percent in North America and 16 percent in Europe.
The International Energy Agency forecast in 2018 that the growth popular for petrochemical products -- including plastics, fertilisers, detergents and other items -- would see them account for over a third of the predicted increase in oil demand to 2030, and practically half to 2050.
But surging plastic use has caused a pollution crisis, with least 8 million tons thought to end up in oceans each year.
It has spurred governments to mandate greater recycling, impose tighter restrictions on waste disposal and sometimes introduce bans on single-use items.
The Carbon Tracker report forecast that mounting pressure to cut plastic use could slash growth popular for virgin plastic from four percent a year to below one percent, with demand peaking in 2027.
It also discovered that the plastic value chain -- from extraction of the oil, to when it is burned, buried or recycled -- releases roughly doubly much carbon dioxide as making a tonne of oil.
"These guys think that they will be completely unaffected by the world's try to decrease carbon usage," said Bond.
Overall, the report said that plastics impose "an enormous untaxed externality after society" of at least $1,000 per ton -- or $350 billion a year -- from skin tightening and, health costs, collection costs, and ocean pollution.
EUROPE in July proposed a tax on non-recycled plastics of 800 euros per tonne.
But recycling has also come under the spotlight recently after China restricted imports of plastic in 2018, sending a surge of discarded waste -- mainly from richer nations -- towards countries in South and Southeast Asia.
In a report the other day, Interpol warned that criminal networks are profiting from this "overwhelming" level of plastic waste by burning and dumping rubbish that was said to be recycled.
Source: japantoday.com
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