Australia's Top Billionaire Weighs in on Climate Pledges
Awareness of plastic pollution and the danger it introduces to our oceans continues to grow, but the industry poses another, lesser-known threat to our planet: Its manufacturing process emits massive amounts of greenhouse gasses.
Petrochemicals, the key chemical feedstocks used to make plastics, are responsible for up to 2 per cent of global emissions, the equivalent of all of aviation. Decarbonizing plastic is considered even more complex than other tough-to-decarbonize industries such as cement and steel. This is because both its feedstocks and its production use fossil fuels.
Nevertheless, plastics could be net-zero by 2050, according to a new report from BloombergNEF, the clean energy research arm of Bloomberg LP. It will take investing an extra US$759 billion to support actions such as the electrification of so-called “cracker” plants — plants that break down natural gas into small molecules needed to make plastics — and building out carbon capture and storage facilities. In addition, the report suggests money needs to be spent on research and development and the switching of feedstocks to include more biofuels.
The authors of the report say such investments must begin immediately. “Large-scale capex spending must start before the end of the decade if the petrochemical industry has any hope of reaching net-zero,” said Ilhan Savut, an analyst with BNEF’s sustainable materials team and lead author of the report. “Investments today will be key to managing longer-term costs and pay dividends post-2035.”
The report outlines a pathway to net-zero even while total plastic production is expected to grow at a steady rate of 3 per cent a year. The oil industry believes that plastics will be a bright spot for it as traditional uses of fossil fuels decline.
A significant caveat to the report, titled “Decarbonizing Petrochemicals: A Net Zero Pathway,” is that it only considers Scope 1 and Scope 2 emissions. These are direct emissions from making the product and the energy sources required to produce it. Scope 3 emissions that could come downstream when the plastic is burned for fuel — an increasingly common practice — are not included and could, depending on how they are calculated, as much as double the industry’s emissions.
While US$759 billion is a large number, it is only 1 per cent of the US$172 trillion BNEF estimates is needed to decarbonize the entire global energy sector by 2050. Still, with spending like that, net-zero petrochemicals will not be competitive for decades to come. A subsidy or a carbon tax of US$250 a metric ton would be required to balance the scales for companies that made no shift in production, the report finds.
The report largely does not address the grave problems to the environment caused by the discarding of plastic products, from water bottles to single-use face masks. Not only is the material choking marine life, it is breaking down into tiny particles called microplastics that have been found in drinking water worldwide and more recently even in human blood.
Julia Attwood, head of sustainable materials at BNEF, said the industry needs to think more about reducing waste of its products overall, especially single-use plastics. “The whole supply chain is a plastic producer’s problem,” she said.