Breakingviews – Global tax would spoil investors’ plastic party – Reuters

Breakingviews – Global tax would spoil investors’ plastic party – Reuters

MILAN, June 1 (Reuters Breakingviews) - The days of carefree plastic use may soon be over. Even though the world is suffocating in polluting waste, sales of fresh polymers are projected to rise 40% to $529 billion by 2031. This may change if supporters of taxes and other restrictive measures prevail at ongoing talks for a global treaty to end plastic pollution by 2040. Drastic action would shrink a promising market for Big Oil and cut packaging firms’ margins.

Derived from fossil fuels, plastic represents an alluring business line for energy majors as the green transition reduces the need to burn oil for electricity and heat. While growth in oil demand is expected to settle at a mere 0.5% annually, crude used for plastic is forecast to grow at around 3.5%. By 2050, 20% of global oil could be used to make plastic. That’s probably why petrochemical players are backing recycling as the solution to a waste crisis, rather than levies or outright product bans. Top virgin polymer producers ExxonMobil (XOM.N), Dow (DOW.N), Sinopec (600028.SS), , Indorama Ventures (IVL.BK) and Saudi Aramco (2222.SE) collectively contributed to about a fifth of waste from single use plastic in 2021, Minderoo Foundation estimates suggest.