• 455 days Will The ECB Continue To Hike Rates?
  • 456 days Forbes: Aramco Remains Largest Company In The Middle East
  • 457 days Caltech Scientists Succesfully Beam Back Solar Power From Space
  • 857 days Could Crypto Overtake Traditional Investment?
  • 862 days Americans Still Quitting Jobs At Record Pace
  • 864 days FinTech Startups Tapping VC Money for ‘Immigrant Banking’
  • 867 days Is The Dollar Too Strong?
  • 867 days Big Tech Disappoints Investors on Earnings Calls
  • 868 days Fear And Celebration On Twitter as Musk Takes The Reins
  • 870 days China Is Quietly Trying To Distance Itself From Russia
  • 870 days Tech and Internet Giants’ Earnings In Focus After Netflix’s Stinker
  • 874 days Crypto Investors Won Big In 2021
  • 874 days The ‘Metaverse’ Economy Could be Worth $13 Trillion By 2030
  • 875 days Food Prices Are Skyrocketing As Putin’s War Persists
  • 877 days Pentagon Resignations Illustrate Our ‘Commercial’ Defense Dilemma
  • 878 days US Banks Shrug off Nearly $15 Billion In Russian Write-Offs
  • 881 days Cannabis Stocks in Holding Pattern Despite Positive Momentum
  • 882 days Is Musk A Bastion Of Free Speech Or Will His Absolutist Stance Backfire?
  • 882 days Two ETFs That Could Hedge Against Extreme Market Volatility
  • 884 days Are NFTs About To Take Over Gaming?
Fake Reviews Go All The Way To The Top

Fake Reviews Go All The Way To The Top

Monitoring service Fakespot Inc found…

  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