Plastics pollution burst into the public consciousness in 2018, and is unlikely to retreat any time soon.
Policy momentum to address plastics pollution has in fact been building for some time. According to the UN report Single-Use Plastics, A Roadmap for Sustainability, the number of new regulations on single-use plastics entering into force at the national level in 2017 leapt to 17, up from 10 the year before and just 5 the year before that.
Another UN study, Legal Limits on Single-Use Plastics and Microplastics, published in December, found that 127 of the 192 countries reviewed had some form of legislation to regulate the use of plastic bags, 27 countries had banned either specific products or put restrictions on the use of particular plastics, 27 had instituted taxes or fees relating to plastic bags, and 43 had some elements or characteristics of extended producer responsibility contained within legislation.
And, in October, the European Parliament voted in favour of a directive on the reduction of the impact of certain plastic products in the environment -- possibly the most significant plastics regulation to date. Aimed at marine plastics pollution, the directive is expected to come into force from 2021 and affects a plastics-consuming population of more than 500 million.
For an oil industry grappling with the potential consequences of transport electrification, plastics regulation looks like a direct hit on their new posterchild, petrochemicals. In many long-term forecasts, petrochemicals is already the strongest single element of future oil demand growth.
The potential demonization of plastic is thus a serious issue for the industry.
Plastics are predominantly made from hydrocarbons, the primary feedstocks being naphtha and LPG, which are derived from oil, and ethane, which is derived from natural gas. Synthetic gas from coal is used to make chemicals and petrochemicals in some places, mainly China, but this makes up only a small proportion of the market and is an emissions heavy process.
Biomass is a relatively new source of petrochemical feedstock. Germany’s Nova Institute estimates that bio-based polymer production capacity will rise from 4.5 million tons in 2017 to just 5 million tons by 2022. This represents about 1.3% of virgin polymer and resin production. Making a polymer from biomass does not mean that it is necessarily more recyclable than any other polymer, while at scale biomass-to-plastics will have to navigate the same food-versus-fuel problems as biofuels.
There are also a variety of other chemical inputs, for example chlorine, which is used to make polyvinyl chloride, but the bottom line is that this is an oil-intensive business and will remain so for decades to come.
According to trade body Plastics Europe, in 2016, the world produced 335 million tons of virgin polymer and resin. That figure excludes PP&A fibres of somewhere in the region of 62 million tons. PP&A fibers, used for example to make clothing, are rarely recycled.
When additives are taken into account, the mass increases by about 6.5%. Additives are necessary to give plastics particular properties, such as colour, stability or fire retardation. Assuming annual market growth of around 4% a year, 2018 should have seen some 457 million tons of plastic products enter the global economy.
According to the landmark study, Production, use, and fate of all plastics ever made, published in Science Advances in 2017, “If production were to continue on this curve, humankind will have produced 26,000 Mt (million tons) of resins, 6000 Mt of PP&A fibers, and 2000 Mt of additives by the end of 2050.”
The study estimates that based on current end-use patterns and waste management trends, 12,000 Mt will have been discarded in landfills or the natural environment by 2050. In short, if left unaddressed, the problem of plastics pollution will only get worse. The current jump in regulatory activity is thus only the beginning.
Like climate change, plastics pollution has catastrophic disaster potential. The rising level of plastics in marine animals is well documented and it is not impossible to imagine species loss or the collapse of an important food chain.
However, the impact to date of plastics regulation on oil demand is relatively small. There is nothing yet that threatens to derail the upward curve in petrochemicals demand.
Take plastic microbeads, which have been a particular focus of environmental groups. The latest UN study found that as of July, only eight out of the 192 countries surveyed had bans. These ‘bans’ are far from comprehensive, although they do cover major economies, including the US, UK, France, Canada, Italy and South Korea.
Microbeads are tiny pieces of plastic used in various industries. However, the bans in the US and UK, have focused only on ‘rinse-off’ cosmetics, such as shampoo, exfoliates and toothpaste. If microbeads were banned from all rinse-off cosmetics in the EU, it would still remove less than 1,000 tons of plastic demand a year, the equivalent of just over 11,000 barrels of oil.
Even if microbeads in all cosmetics were banned globally this would still represent less than 0.002% of estimated global plastics production in 2018.
Total microbead consumption is significantly larger than the figures for cosmetics as they are used in paints/coatings, detergents, oil and gas drilling fluids, agricultural polymer coatings for seeds, industrial abrasives and sewage water treatment.
There is no good data on what tonnage of microbeads is used in these areas, but use in the EU could be up to eight times or more than in cosmetics, if agricultural polymers are included, according to one study.
“8.5 billion straws!”
Media representations of such bans often imply much greater effect than is really the case. Take for example the EU’s directive on single use plastics. This will ban plastic straws, cotton buds, plastic cutlery, stirrers and balloon sticks.
Headlines tend to focus on the huge amounts of items used. Although the methodology of the number is suspect, the UK government has used a figure for annual plastic straw consumption of 8.5 billion a year.
Big numbers make great headlines, so here are some more. One ton of plastic makes about 240,000 straws, 3 million stirrers or 12.25 million cotton buds.
The single use plastics directive also targets reductions in the use of food containers, drinking cups and lids and plastic bottles.
Although the directive is a significant piece of legislation, if a 20% reduction in these items’ use is achieved across the EU, the effect on oil demand would be to displace just over 22,000 b/d. When set against global demand growth for petrochemicals of about 4% -- more than 500,000 b/d a year – it hardly represents a body blow to the industry.