The future of plastics will determine the future of oil demand – OilPrice.com

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The future of plastics will determine the future of oil demand – OilPrice.com

The UN is discussing the future of plastic this week – or so it seems at first glance. The UN Global Plastics Treaty negotiations aim to reduce plastic pollution by essentially limiting the use of plastics globally. And they seem doomed to failure.

The objective is certainly noble. Reduce the massive amount of plastic waste we produce every day to prevent it from ending up in rivers, oceans and, according to some researchers, in our bodies. But achieving this goal is another matter entirely.


Plastics, especially single-use plastics in packaging, have helped make many products more affordable for more people. And while electronic devices, for example, can certainly be sold in non-plastic packaging, fresh fruit, vegetables and meat are another matter, and an expensive one.

The European Union this week approved new packaging rules aimed at reducing waste. One of these rules included a ban on single-use plastic packaging for fresh fruit and vegetables from 2030. This means that from that year onwards, tomatoes, for example, would be sold probably in cardboard packaging. This would make them more vulnerable to damage, leading to more food waste in supermarkets. This would make tomatoes as a whole more expensive. And it won’t just affect tomatoes.


It therefore seems that, although noble, the objective of reducing plastic pollution is more difficult to achieve than it seems. The UN negotiations themselves are a good example of this. In a recent update, a green NGO at the event said the United States has refused to consider any additional measures beyond current legislation on the topic of plastics. If the world’s largest user of plastic refuses to consider anything in addition to already existing legislation, the chances of the rest of the world agreeing to something that could have a palpable effect on plastic use are not really huge.




The oil industry, however, is worried. Media reported that there were many participants in the UN negotiations in Ottawa from the oil and petrochemical industries, with the Guardian lamenting that “fossil fuel and petrochemical activists at the summit Ottawa outnumber scientists, EU delegates and natives.”

The above report cites BP’s forecast that plastics will account for up to 95% of oil demand growth in the two decades to 2040, which echoes many other forecasts regarding the outlook of oil demand. Indeed, plastics are widely seen as the main driver of oil demand in the future, although we might be surprised how long demand from the transportation sector lasts given the latest developments in electric vehicle markets.

It’s no wonder, then, that the oil industry is seeking to protect this demand driver – and it has strong support from science. Plastics go a long way towards making modern healthcare as safe as it is and, arguably more importantly, they go a long way towards making many foods affordable to more people – simply because plastic packaging reduce transport and storage costs. food. Yet even though plastics used in healthcare are safe from bans, at least for now, plastics in food packaging are a target.

“The problem is pollution. The problem is not plastic.” That’s according to Karen McKee, head of product solutions at Exxon, who recently told the FT that “limiting plastic production won’t do us any good in terms of pollution and the environment.”

Alternatives to plastic packaging could have a larger emissions footprint, McKee argued.


If this sounds familiar, it’s probably because it brings to mind the arguments made against the electrification of transportation in light of all the raw materials mined, refined, and processed into electric vehicles that cast a shadow over their zero-emissions credentials.

The simple truth is that plastics are used on such a scale because they are both practical and cheap. Proponents of a plastic ban should offer alternatives that offer the same combination of convenience and price to have any chance of achieving a successful ban on a meaningful scale.

This situation largely reflects the energy transition itself. Wind, solar and electric vehicles, not to mention hydrogen, have never succeeded in dethroning oil, gas and even coal from their first place in the global energy mix. This remains true even though the expansion of wind and solar power has made gas and coal production much less competitive in the absence of the same subsidy treatment.

Sadly, the alternative to plastic production bans would be better disposal processes and more recycling. Unfortunately, recycling also has to be profitable for it to work, and much of it is simply not profitable. The world has a plastic waste problem. Bans might solve this problem, but they would create new, potentially more serious ones. This is certainly a serious enigma.

By Irina Slav for Oilprice.com

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