Living on the east coast of the United States, it is easy to look at bans on plastic straws and plastic bags as the first step towards a sustainable future. Certainly, finding alternatives to common, single-use plastic products is helpful, but these actions are often narrow and isolated within a community. It is strenuous to convince the United States to adopt such policies, and as with most climate change mitigation measures, the matter of curbing waste goes beyond national borders. Every action taken to address climate change is helpful – even when it is just reducing single-use plastics. However, in order to curb a growing global issue of plastic use and demand, we must consider a more realistic and actionable mindset to renovate the idea of how the world consumes.

Plastics are a part of the petrochemical industry – a field that creates both basic and complex chemicals derived from oil and gas. In addition to common plastics, products include aromatics, mineral oils, paraffins (waxes), and many other frequently used substances. Grab a shampoo bottle and read the ingredients: Cocamidopropyl Betaine, Propylene Glycol, Hydroxypropyldimonium Chloride – even the bottle itself is likely made from Polyethylene Terephthalate, or “PET” plastic. The reach of this industry extends far and is only expected to grow. Petrochemicals are expected to sustain some oil and gas companies as traditional demand for hydrocarbons (oil and gas) are estimated to diminish during the future energy transition. The US Energy Information Administration (figure 1) and the International Energy Agency (figure 2) indicate that demand for petrochemicals has grown both domestically and globally. IEA Executive Director, Fatih Birol, states, “Petrochemicals are one of the key blind spots in the global energy debate, especially given the influence they will exert on future energy trends.”

Figure 1
Figure 2

Why do oil and gas companies expect petrochemicals to be a space for new growth? In one way, the petrochemical field allows the oil and gas industry to continue using hydrocarbons while investing in renewable energy sources. Until renewable energy becomes cost-competitive and profitable, the oil and gas industry aims to drive profit margins through chemical products. The other reason for petrochemical growth lies in widespread population and income trends, especially in Asia Pacific (APAC) nations. China already features the world’s largest population, at roughly 1.4 billion people. India is estimated to outpace them by 2027, according to the UN. Aside from the sheer number of people in this region, the increase in wealth and the emergence of a middle-class population drives higher demand for commodity and luxury goods, many of which use petrochemicals as building blocks (figure 3).

Figure 3

A significant roadblock is that it is nearly impossible to ban every single object touched by the petrochemical industry overnight. Researching and choosing more sustainable brands should always be encouraged but it is not always a financially viable option for those in quickly growing, emerging markets. Petrochemicals are vital across the medical, pharmaceutical, textile, cosmetics, and food industries. Plastic, especially, is widely used for its low-cost ability to hygienically package objects in a lightweight manner. One common argument made by emerging economies on a global stage is that developed nations have had an opportunity to use unsustainable energy and products to build up their own economy – is it not unfair that these developed nations would now impose restrictions on stilldeveloping nations?

The future may seem bleak in the face of these problems, but there is still a solution. Plastics use will continue to grow globally, but there is a way to leverage waste through the “Circular Economy.” This is a regenerative approach to waste reduction because it principally seeks to keep materials in use, thereby “designing out” waste and pollution, according to the Ellen MacArthur Foundation. Mass wastefulness is fundamentally unsustainable, especially when resources like oil and gas are unrenewable and create pollution. We currently exist in a “Take, Make, Waste,” linear economy: we take resources from the ground, make objects, and then throw those objects away. If we invest in a circular economy, we can shift to a “Make, Use, Return,” scenario. The circular economy goes beyond recycling plastic, it is a way of life that we can adopt – starting with plastics – in order to ensure a transformation of the idea of waste across all industries.

Consumer demand for sustainable goods can, over time, shift production to accommodate demands for more wholesome, less wasteful products.

Cooperation between governments, the public, and corporations is critical to realize a circular economy. Governments must be willing to continue banning single-use plastics, beyond straws and grocery bags. In many cases, this may include grants or financial incentives to groups deeply tied to resolving these issues. Notably in Tamil Nadu and Maharashtra, India, local governments have crafted legislation to ban single-use PET plastics. This is part of an ambitious national campaign, shared by Prime Minister Narendra Modi on World Environment Day, to eliminate single-use plastics in India by 2022. Activity like this limits the opportunity for wastefulness, by leaving consumers with fewer chances to encounter single-use goods. We cannot simply depend on governments to solve this problem for us. Consumers must become aware of what they are consuming and become willing to both research and spend according to what products align with their values. Awareness about how pervasive petrochemicals are is critical – often products we perceive to be innocent are built from this industry. Consumer demand for sustainable goods can, over time, shift production to accommodate demands for more wholesome, less wasteful products.

Finally, for-profit organizations stand to benefit and contribute to this economy – in fact they are critical stakeholders who cannot be ignored. From the start to the finish of the plastics supply chain, companies can take a stand on how to reuse plastics and reduce use. A supermarket in Thailand has returned to using banana leaves to package goods, instead of plastics. Another paradigm-shifting approach comes from Patagonia, which is just one example of companies selling products made from recycled plastic. After use, these clothing products may be donated by their consumers, entering thrift stores where others may find a use for the item. The oil and gas industry itself must also be part of the conversation. As suppliers of the hydrocarbon-derived goods, there are opportunities across upstream and downstream to reduce waste. The petrochemical production space, according to McKinsey & Company, could generate a worldwide profit of roughly $55 billion per year by 2030 from recycled plastics. The report suggests three approaches: mechanical recycling, which turns used plastic into polymer-chain conserving pellets, polymer to monomer chemical recycling, or reconversion of waste plastics into feedstocks, which would replace currently used, unrenewable naphtha and NGLs.

Figure 4

These are the fundamental actions and partnerships we must engage in to curb waste. Starting with plastics, we may begin to develop the mindset for a circular economy (figure 4). Eliminating petrochemical use is, unfortunately, unpractical on a global scale. Barring complete anti-consumption of many of these commodity and luxury goods, built from chemical building blocks, we must begin to reuse and restore products back into the environment. Let’s keep banning plastic straws, but let’s also expand our mindset beyond what’s happening in our local towns. Waste and climate change are not confined to borders, and so our solutions must bring all people and all stakeholders to the discussion table.

Anne-Marie Downey is an Analyst at Fuld + Company, a Boston-based consulting firm that pioneered the practice of competitive intelligence to support competitive strategy. By helping leaders of Global Fortune 1000 companies define their intelligence needs and gather and analyze relevant data, Fuld + Company consultants have become known as critical partners for executive decision-making.

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