• 5 days Stocks Tumble After Moderna Chief Warns Existing Vaccines Could Be Less Effectiv
  • 6 days The EU Is Pushing Two Massive Digital Laws To Tame Big Tech
  • 9 days U.S.-China Trade War Has Under Biden
  • 11 days Visa, Mastercard Slump Amid Covid Worries, Regulatory Outlook
  • 12 days 3 Biotech Stocks Wall Street Loves This Quarter
  • 16 days Fintech Goes “Green”, Joining $30T ESG Boom
  • 17 days U.S. Cargo Theft Spikes Amid Huge Supply Chain Snarl Ups
  • 18 days Buybacks Are Back, But New Taxes Could Dull the Party
  • 20 days Don’t Be Fooled By Musk’s Twitter Performance
  • 25 days 3 Healthcare Sector Stocks to Watch Right Now
  • 26 days More Trouble Ahead for Supply Chain as Hackers Descend
  • 27 days Saudi Arabia To Invest $64 Billion Into Becoming A New Global Cinema Hub
  • 30 days The Cryptic Squid Strikes, Netting Scammers Nearly $4M
  • 30 days October Jobs Impress but Inflation Threatens Recovery
  • 32 days Another Round of ‘Meme’ Stocks Coming Our Way?
  • 32 days 2021’s Black Friday Bummer
  • 34 days Buy-Now-Pay-Later Is A Huge Threat to Credit Cards
  • 37 days Microsoft Passes Apple As World’s Most Valuable Company Amid Stellar Earnings
  • 38 days 3 IPOs from Big to Small Coming Our Way
  • 39 days Robinhood Investors Balk at ‘Meme’ Growth
US Retail Has A Major Supply Chain Problem

US Retail Has A Major Supply Chain Problem

Before the pandemic, goods typically…

Airlines Could Recover, But Crew Remain Elusive

Airlines Could Recover, But Crew Remain Elusive

American Airlines is canceling hundreds…

$12M Seized in Massive US-Dubai Money-Laundering Raid

$12M Seized in Massive US-Dubai Money-Laundering Raid

According to the court filing,…

Oilprice.com

Oilprice.com

Writer, OilPrice.com

Information/Articles and Prices on a wide range of commodities: We have assembled a team of experienced writers to provide you with information on Crude Oil,…

Contact Author

  1. Home
  2. News
  3. Breaking News

Will Big Oil's Plastic Bet Pay Off?

Plastic

Oil companies are risking some $400 billion in stranded assets with their focus on petrochemicals production growth that relies on strong growth in demand for plastics, Carbon Tracker has said in a new report.

“The oil industry is pinning its hopes on strong plastics demand growth that will not materialise, as the world starts to tackle plastic waste and governments act to hit climate targets,” the organization said.

Big Oil companies are banking on demand for plastics replacing much of the demand for oil from the transport sector as EVs displace internal combustion engines. But Carbon Tracker’s The Future’s Not in Plastics report suggests that growth in plastics demand will actually be much weaker than Big Oil needs because of an expected shift “from a linear plastic system to a circular one and governments act to hit climate targets.”

If this proves true, it will make for terrible news for the oil industry. While the major displacement of oil demand in the transport sector has yet to materialize as EV penetration has been slower than major projections estimated, the crusade against plastics has begun and will only intensify in the coming years. This would mean more initiatives for banning single-use plastics and more regulation in place for plastics recycling. Without regulation, the crusade will fail.

According to Carbon Tracker, however, it will win, not least because of problems inherent in the plastics industry.

“Plastics impose a massive untaxed externality upon society which this report estimates is about $1,000 per tonne ($350bn a year) from carbon dioxide, health costs, collection costs, and ocean pollution,” the report’s authors wrote, adding that these can be mitigated through recycling, replacing with alternative materials, and improving the design and regulation.

If demand for plastics falls, then some 80 million tons of new plastics production capacity worth $400 billion will be stranded, the report warns.

By Irina Slav for Oilprice.com

More Top Reads From Oilprice.com:

Back to homepage

Leave a comment

Leave a comment