As car companies and utilities plan for an electric future, the fossil fuel industry is betting on plastic to help fill a gap in sales. But a new report says that the industry is risking $400 billion by investing in new petrochemical infrastructure that could become stranded assets.
“Oil companies are banking on plastics because all the other expected growth is under threat,” says Kingsmill Bond, an energy strategist at the nonprofit Carbon Tracker and an author of the report, produced along with Systemiq, a London-based company that works on system changes in materials use. “They think plastics are the only sure bet for growth.” A 2019 forecast from BP, for example, projected that plastics would account for 95% of the growth in net demand for oil over the next two decades. Right now, plastics account for only around 9% of oil demand.
The pandemic has temporarily boosted demand for plastics used in masks and takeout containers (and plastic bags, after the industry lobbied to reverse plastic bag bans, even though health experts say that reusable bags are still safe to use.) But the growing tide of recognition about plastic’s waste problems—an estimated 11 million metric tons of plastic ends up in the ocean every year—means that demand may shrink. In June, the European Union proposed a new €800-per-ton tax on plastic; EU laws also ban some single-use plastic products, aim to reduce the use of plastic food containers, and require plastic bottles to use an increasing amount of recycled plastic. Major corporations that rely on plastic packaging, such as PepsiCo and Coca-Cola, have committed to shift to reusable, compostable, and recyclable packaging. An increasing number of consumers say that they’re willing to spend more to avoid plastic.