The world’s governments are meeting this week to hammer out a treaty to reverse the rising tide of plastics. Oil companies have other ideas.
Far from cutting back their spending, refiners are planning to drown the noble ambitions of UN negotiators meeting in Geneva beneath a tsunami of polymers. That freaky-cute Labubu doll you just bought (made largely of polyester and polyvinyl chloride) and the bento meal you got delivered in four separate containers (polypropylene and polyethylene) are evidence that we need to work a lot harder to break our plastics habit.
China is ground zero for this shift. Just last week, Shandong Yulong Petrochemical Co announced plans to spend US$16.4 billion on an expanded facility to produce feedstocks — the basic chemicals, such as ethylene and propylene, from which plastic polymers are made. PetroChina Co has also signed off on a US$9.6 billion plastics plant, Reuters reported last month.
Illustration: Constance Chou
That is part of a massive expansion as the country rushes for self-sufficiency in chemicals it previously imported.
Production of ethylene nearly doubled since 2018, to 35 million metric tonnes last year. Another 33 million tons, including vast projects under construction by Saudi Basic Industries Corp, Shell Plc, BASF AG, and China Petroleum & Chemical Corp, or Sinopec, would be added by 2030.
The country might already have reached the point where it is using polymers at developed-economy levels. Consumption in 2019 was 76kg per person, not much less than 82kg per person in Japan, although still well below 115kg per person in the EU.
It has almost certainly risen since. Packaging, which consumes nearly 40 percent of plastics in China, moves about in tandem with the volumes of goods getting shifted around. That sector has exploded in recent years. Since 2022 alone, express delivery numbers have nearly doubled. Despite repeated, vague government promises to crack down on waste, there is little sign of anything sufficient to offset such an extraordinary increase.
That demand picture is worrying, but the supply situation might be worse, and might even be exacerbated by some of the progress the world is making in capping our usage of fossil fuels. The rise of electric vehicles, for instance, would force refiners to produce more naphtha, since it is chemically similar to gasoline, whose demand is beginning to decline. Naphtha, in turn, is mostly processed into plastic feedstocks.
The methane that is replacing coal in power generation has a similar side effect, since it typically comes out of the ground mixed with natural gas liquids (NGLs) — a suite of volatile chemicals, such as ethane and propane, which are crucial building blocks for plastics.
About one-third of oil production in the US these days is not crude, but NGLs. Thanks to that wave of new plastics plants under construction in Asia, NGLs are now the biggest US export to China after soybeans and crude. Total exports of ethane are set to increase by about 30 percent next year relative to last year’s level, US government data showed, due in part to a special exemption from the tariff barriers erected over almost every other component of US-China trade. Jafurah, a massive Saudi Arabian gasfield due to start production within months, is also heavily focused on supplying NGLs.
All that adds up to a world where even the decline of oil and coal is leaving us awash in plastic feedstocks, plus the processing plants to turn them into synthetic bags, boxes, clothes and household goods. In the face of all this, is there any hope that the officials meeting in Switzerland would be able to rein in our addiction? The prognosis does not look great: The last session, held in Busan, South Korea, just weeks after last year’s US presidential election, was notable mainly for the fact that its timid official statement failed to mention the ostensible objective of the meeting, an end to plastic pollution.
However, the current market glut might provide a clue. Ethylene production capacity is so excessive that as much as 55 million tonnes might have to close, according to data compiled by Wood Mackenzie, an energy consultancy. That would be most acute in Europe, where about 40 percent of the total is at risk of getting shut down. This potential shock to hydrocarbon supply is an oddly similar situation to 2022, when Russia’s invasion of Ukraine forced the EU to cut gas consumption by about 20 percent in four years.
The EU would be better set up than most to survive the shutdown of its virgin plastics processors, thanks to waste separation and recycling networks that are among the most sophisticated in the world. Still, if local chemical plants start closing, expect plenty more headlines about the decline of European manufacturing in the face of rapacious Chinese competition. Next would come pleas for government money and tariff protections, to preserve jobs.
It is one thing to make treaty promises to reduce our use of plastics. It is quite another to put those words into action, by cancelling plans to export ethane, mothballing a new petrochemicals plant, or accepting that one of your country’s remaining oil refineries would just have to close. As the world responds to its current polymer glut, we are about to find out which side will win.
David Fickling is a Bloomberg Opinion columnist covering climate change and energy. Previously, he worked for Bloomberg News, the Wall Street Journal and the Financial Times. This column reflects the personal views of the author and does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.
China has not been a top-tier issue for much of the second Trump administration. Instead, Trump has focused considerable energy on Ukraine, Israel, Iran, and defending America’s borders. At home, Trump has been busy passing an overhaul to America’s tax system, deporting unlawful immigrants, and targeting his political enemies. More recently, he has been consumed by the fallout of a political scandal involving his past relationship with a disgraced sex offender. When the administration has focused on China, there has not been a consistent throughline in its approach or its public statements. This lack of overarching narrative likely reflects a combination
US President Donald Trump’s alleged request that Taiwanese President William Lai (賴清德) not stop in New York while traveling to three of Taiwan’s diplomatic allies, after his administration also rescheduled a visit to Washington by the minister of national defense, sets an unwise precedent and risks locking the US into a trajectory of either direct conflict with the People’s Republic of China (PRC) or capitulation to it over Taiwan. Taiwanese authorities have said that no plans to request a stopover in the US had been submitted to Washington, but Trump shared a direct call with Chinese President Xi Jinping (習近平)
Heavy rains over the past week have overwhelmed southern and central Taiwan, with flooding, landslides, road closures, damage to property and the evacuations of thousands of people. Schools and offices were closed in some areas due to the deluge throughout the week. The heavy downpours brought by the southwest monsoon are a second blow to a region still recovering from last month’s Typhoon Danas. Strong winds and significant rain from the storm inflicted more than NT$2.6 billion (US$86.6 million) in agricultural losses, and damaged more than 23,000 roofs and a record high of nearly 2,500 utility poles, causing power outages. As
It is difficult to think of an issue that has monopolized political commentary as intensely as the recall movement and the autopsy of the July 26 failures. These commentaries have come from diverse sources within Taiwan and abroad, from local Taiwanese members of the public and academics, foreign academics resident in Taiwan, and overseas Taiwanese working in US universities. There is a lack of consensus that Taiwan’s democracy is either dying in ashes or has become a phoenix rising from the ashes, nurtured into existence by civic groups and rational voters. There are narratives of extreme polarization and an alarming
RSS