• 2 days Three Renewable Energy IPOs To Watch
  • 3 days Bitcoin Nears $13,000 As PayPal Joins The Crypto Fray
  • 4 days DOJ Declares The Obvious: Google Is A “Monopoly”
  • 6 days Alibaba Is About To Make History Again
  • 7 days Robinhood Users Are Latest Target Of Pandemic Hackers
  • 9 days The Hydrogen Boom Will Provide A $200B Boost To Wind And Solar Energy
  • 10 days Will The 5G Rollout Overshadow This Major Merger?
  • 11 days Corporate Bitcoin Holdings Boost Crypto Confidence
  • 11 days Indonesia Rolls Out Augmented Reality Innovation To Combat COVID
  • 12 days Banks Are Getting Rich On Pandemic Overdrafts
  • 12 days The Real Reason China Is Betting Big On Renewables
  • 13 days Europe Wants To End The Big Tech Monopoly
  • 13 days New Breakthrough Could Transform Rare Earth Mining
  • 14 days Waymo Set To Roll Out Fully Self-Driving Vehicles
  • 15 days Aramco Dividend Won’t Cover Saudi Budget Gap
  • 16 days Credit Card Debt Plummets Amid COVID
  • 17 days Biden Plan Targets “Wealthy” Taxpayers
  • 18 days McAfee Arrested In Spain On Tax Evasion Charges
  • 18 days South Asia Is Set To Unleash A Flurry Of IPOs
  • 19 days U.S. Takes Stake In Irish Battery Metal Producer
Wealthy Investors Have Been Fleeing Stocks Since April

Wealthy Investors Have Been Fleeing Stocks Since April

The great money-making investors are…

Google Pledges To Go Carbon-Free By 2030

Google Pledges To Go Carbon-Free By 2030

Tech giant Google is looking…

Saudi Arabia's $500 Billion Smart City

Saudi Arabia's $500 Billion Smart City

Saudi Arabia's Energy Ministry will…

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