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Africa/Global: The Future's Not in Plastics
AfricaFocus Bulletin
October 13, 2020 (2020-10-13)
(Reposted from sources cited below)
Editor's Note
�The petrochemical industry is already facing record-low plastic
feedstock prices as a result of massive overcapacity. And yet, it
plans to expand supply for virgin plastics use by a quarter at a
cost of at least $400 billion in the next 5 years, risking huge
losses for investors. The plastics industry is a bloated behemoth,
ripe for disruption. � Meanwhile, 36% of plastic is used only
once, 40% ends up polluting the environment and less than 10% is
actually recycled.� - Carbon Tracker Initiative
As demand for oil declines, �the oil industry is pinning its hopes
on strong plastics demand growth that will not materialise, as the
world starts to tackle plastic waste and governments act to hit
climate targets,� according to this new report from the Carbon
Tracker Initiative. But instead of adjusting to the new reality,
oil and petrochemical industry lobbyists continue to press for
government action to continue to profit, despite the consequences
of further global warming and environmental damage.
A new report from Greenpeace reveals that �a lobby group
representing oil and chemical companies, including Shell, Exxon,
Total, DuPont and Dow, has been pushing the Trump administration
during the pandemic to use a US-Kenya trade deal to expand the
plastic and chemical industry across Africa.�
Ironically, the industry's strategic plan would make Kenya, a
leader in banning plastic bags, into the African hub for plastic
waste exported from industrialized countries.
This AfricaFocus Bulletin contains press releases from the Carbon
Tracker Initiative and Greenpeace, with links to the full reports.
The full reports are available respectively at
https://carbontracker.org/oil-industry-betting-future-on-shaky-plastics-as-world-battles-waste/ and
https://unearthed.greenpeace.org/2020/08/30/plastic-waste-africa-oil-kenya-us-trade-deal-trump/.
For previous AfricaFocus Bulletins on the climate and environment, visit http://www.africafocus.org/intro-env.php
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The Future�s Not in Plastics: Why plastics demand won�t rescue the oil sector
$400 billion of planned petrochemical outlay at risk on exaggerated plastics demand
Carbon Tracker Initiative, 04 September 2020
https://carbontracker.org/oil-industry-betting-future-on-shaky-plastics-as-world-battles-waste/
Key Quotes
�Remove the plastic pillar holding up the future of the oil
industry, and the whole narrative of rising oil demand collapses.�
Kingsmill Bond, Carbon Tracker Energy Strategist and report lead
author.
�There are huge benefits in the change from the current linear
system to a more circular one. You can have all the functionality
of plastics but at half the capital cost, half the amount of
feedstock, 700,000 additional jobs and 80% less plastic pollution.�
Yoni Shiran, lead author of Breaking the Plastic Wave
�It is simply delusional for the plastics industry to imagine that
it can double its carbon emissions at the same time as the rest of
the world is trying to cut them to zero,� Kingsmill Bond.
$400 billion of planned petrochemical outlay at risk on exaggerated
plastics demand
London/New York, September 4 � The oil industry is pinning its
hopes on strong plastics demand growth that will not materialise,
as the world starts to tackle plastic waste and governments act to
hit climate targets. This risks $400 billion worth of stranded
petrochemical investments, increasing the likelihood of peak oil
demand, finds a new report from Carbon Tracker, basing some of its
findings on a recent report �Breaking the Plastic Wave�.
The central scenarios of BP and the IEA imply that plastics demand
will be the largest driver of oil demand growth, making up 95% and
45% of growth to 2040 respectively, as oil demand is challenged in
its core area of transport.
The Future�s Not in Plastics finds that mounting pressure to
curtail the use of plastics � now a worldwide public concern [
IPSOS polls carried out in 2019 in 28 countries found 70-80% of
those polled wanted action on waste including a ban on single use
plastics and forcing manufacturers to pay for recycling costs]
� could slash virgin plastic demand growth from 4% a year to under
1%, with demand peaking in 2027.
The implication for big oil is that the industry will lose its
primary growth driver, making it more likely oil demand peaked as
early as 2019.
�Remove the plastic pillar holding up the future of the oil
industry, and the whole narrative of rising oil demand collapses.�
- Kingsmill Bond, Carbon Tracker Energy Strategist and report lead
author.
The petrochemical industry is already facing record-low plastic
feedstock prices as a result of massive overcapacity. And yet, it
plans to expand supply for virgin plastics use by a quarter at a
cost of at least $400 billion in the next 5 years, risking huge
losses for investors.
The plastics industry is a bloated behemoth, ripe for disruption.
Plastics imposes an externality cost on society of at least $1,000
per tonne, or $350 billion a year, from emitting carbon dioxide,
associated health costs from noxious gases, collection costs and
the alarming growth in ocean pollution.
And yet it receives more in subsidy than it pays in taxation, and
until recently there have been very few constraints on how you can
use plastics. Meanwhile, 36% of plastic is used only once, 40% ends
up polluting the environment and less than 10% is actually
recycled.
SYSTEMIQ notes that technology solutions are already available to
enable a massive reduction in plastic usage at lower cost than
business as usual. Solutions include reuse, with better design and
regulation of product, substitutions such as paper, and a large
increase in recycling.
�There are huge benefits in the change from the current linear
system to a more circular one. You can have all the functionality
of plastics but at half the capital cost, half the amount of
feedstock, 700,000 additional jobs and 80% less plastic pollution.�
-- Yoni Shiran, lead author of Breaking the Plastic Wave and
analyst at SYSTEMIQ.
Policymakers in Europe and China are already taking steps to clamp
down on plastics waste and have a wide range of tools they can use,
from regulation and bans to taxes, targets and recycling
infrastructure.
The EU for example in July 2020 proposed an �800/t tax on
unrecycled waste plastic, while China has similar regulatory
aspirations and has started to ban certain types of plastic. In
China the first major flag came in 2018 when the country largely
closed down its industry for importing and processing plastic waste
� the world�s largest � forcing exporters to solve the waste issue
at home.
The report notes a stagnation in demand in developed markets and a
leapfrog in emerging markets. As has been seen in other areas of
the energy system, OECD plastic demand is stagnating at the same
time as emerging market leaders are looking for alternative
solutions to plastic.
A further critical element that will dim the rosy petrochemical
demand picture painted by incumbents is the effects of global
policy action to tackle climate change. Carbon dioxide is produced
at every stage of the plastic value chain � including being burnt,
buried or recycled, not just extraction of oil and manufacturing.
The analysis therefore finds that plastic releases roughly twice as
much CO2 as producing a tonne of oil.
If one assumes 350Mt of plastic demand with a total carbon
footprint of around 5 tonnes of CO2 per tonne of plastic, that
implies 1.75Gt of CO2. Continuation of current growth rates would
see the carbon footprint of plastics double by the middle of the
century to around 3.5Gt. And yet, the Paris Agreement implies that
global CO2 emissions (33Gt from the energy sector in 2018) will
have to halve by 2030 and get to zero by the middle of the century.
�It is simply delusional for the plastics industry to imagine that
it can double its carbon emissions at the same time as the rest of
the world is trying to cut them to zero,� Kingsmill Bond.
The report can be downloaded here: https://carbontracker.org/reports/the-futures-not-in-plastics/
About Carbon Tracker
The Carbon Tracker Initiative is a not-for-profit financial think tank that seeks to promote a climate-secure global energy market by aligning capital markets with climate reality. Our research to date on the carbon bubble, unburnable carbon and stranded assets has begun a new debate on how to align the financial system with the energy transition to a low carbon future. http://www.carbontracker.org
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Oil-backed trade group is lobbying the Trump administration to push
plastics across Africa
https://unearthed.greenpeace.org/2020/08/30/plastic-waste-africa-oil-kenya-us-trade-deal-trump/
The American Chemistry Council also pushed back against new global
rules that will restrict the flow of plastic waste to the global
south
30.08.2020
Emma Howard
A lobby group representing oil and chemical companies, including
Shell, Exxon, Total, DuPont and Dow, has been pushing the Trump
administration during the pandemic to use a US-Kenya trade deal to
expand the plastic and chemical industry across Africa.
Documents obtained by Unearthed show the same lobby group � and the
US recycling industry � also lobbied against changes to an
international agreement that puts new limits on plastic waste
entering low- and middle-income countries.
Several of the companies in the American Chemistry Council (ACC) �
including Shell, Exxon and Total but not BP � were the founders of
a $1bn initiative that pledges to create �a world free of plastic
waste�.
In public letters to top officials at the US Trade Representative
and US International Trade Commission, the ACC writes: �Kenya could
serve in the future as a hub for supplying U.S.-made chemicals and
plastics to other markets in Africa through this trade agreement.�
Kenya's ban on plastic bags in 2017 made it one of the world
leaders in combating this environmental pollution. Credit: United World Project.
The letters also call for the lifting of limits on the waste trade,
a move which experts say amounts to an attempt to legally
circumvent the new rules on plastic waste, rules which � the
documents reveal � the firms had also vigorously opposed.
Kenyan environmentalists said the proposals would mean that �Kenya
will become a dump site for plastic waste�.
US Democratic Senator Tom Udall, who last year introduced
legislation to tackle the plastic waste crisis accused the
companies of �double dealing.�
He told Unearthed: �It is outrageous that petrochemical and plastic
industries claim the solution to our mounting plastic waste crisis
is to produce more disposable plastic. These same companies and
corporations then point the finger at developing nations for the
plastic waste showing up in our oceans. This double-dealing makes
clear what the true source of our plastic waste crisis is:
companies and corporations off-shoring their responsibilities to
make billions of dollars� Requiring these companies to take
responsibility for their excessive waste and pollution is the only
way we will tackle our colossal plastic waste problem.�
The ACC is a major trade association for chemical companies,
including Dow and DuPont, as well as the petrochemical arms of some
of the oil majors. Although BP is a member, it does not produce any
plastics and last month sold off its petrochemicals business to
Ineos. A spokesperson told Unearthed that their work with the ACC
focuses on Castrol lubricants, which are used in the automotive
industry.
Basel Convention
Following public outcry about plastic waste, in May last year, new
rules agreed under a global treaty called the Basel Convention mean
that as of 2021, almost all countries outside the OECD will be
prohibited from trading mixed, contaminated or unrecyclable plastic
with the US, because it is one of the few countries not party to
the Convention.
The OECD has not yet ruled on whether it will accept the new
plastic waste rulings, following objections from the US. The Basel
Convention provides a limited exception which would allow continued
trade between the US and the 37 member countries of the OECD, but
only if those countries adopt standards on plastic waste as strong
as those in the Convention.
The 187 countries that are part of the treaty will have to partake
in a procedure to obtain prior informed consent from importing
countries, a procedure which requires checks on environmental
processing facilities.
Unpublished documents obtained by Unearthed under the Freedom of
Information Act (FOIA) show that the oil and chemical industry
lobby group wrote to the Secretariat of the Basel Convention in
March 2019.
It objected to the new rules on the basis that they would create a
�regulatory burden�, lead to shipping delays, logistical issues and
increased costs. It forwarded its letter to the Office of the US
Trade Representative (USTR) two weeks later, requesting a meeting
to discuss its concerns.
The documents also reveal that the Institute of Scrap Recycling
Industries (ISRI) � a major trade association representing the US
recycling industry � lobbied against the new rules on the basis
that they could severely limit US exports, discourage legitimate
trade and exacerbate marine litter by preventing plastic from
reaching recycling facilities.
�In principle, we would prefer the proposals not be adopted and
maintain the status quo,� they wrote in an email sent to USTR on 3
April 2019.
A spokesperson from the ACC told Unearthed the basis of their
concerns regarding the new Basel restrictions was that they �could
very well limit the ability of African and other developing
countries to properly manage plastic waste,� because they will
restrict their capacity to export materials to other countries.
ISRI echoed these concerns. A spokesperson told Unearthed that the
new restrictions �will prevent countries that lack materials
management infrastructure � such as for collection, sorting and
recycling � from sending what they can collect to countries that do
have recycling and disposal capacity� Without this outlet for
developing countries, ISRI worries that an already bad situation
will become much worse.�
According to ISRI, in 2018 the US imported more than 92,000 metric
tons of plastic waste from non-OECD countries.
However, in the first six months of that year, US exports to China,
Hong Kong, India, Malaysia, Thailand and Vietnam alone � all
countries outside the OECD � totalled 480,432 tons. These exports
are five times the US imports in half the time.
The Trump administration backed the industry position � opposing
the implementation of the new rules at the OECD. US opposition has
led to concerns over whether the country will seek ways around the
changes.
This trade deal would diminish what we have achieved as a country
Dr. Innocent Nnorom, an associate professor in environmental
chemistry at Abia State university in Nigeria, who co-authored a
recent inventory of plastic consumption in Africa, told Unearthed:
�Most countries in Africa do not have the recycling infrastructure
for managing increasing plastic waste.
�It appears that loopholes are being sought to continue the trade
in plastic waste. Once in Africa, the emerging free trade routes
could be used to facilitate transboundary movements to other
African countries. The African Union and its member states should
be on the look-out.�
Demand for petrochemicals is expected to rocket in coming decades,
with companies expected to be looking to low- and middle-income
countries to expand the market. Plastic is already the US� biggest
export to Kenya, with sales totalling $58m in 2019.
In their letters to the Trump administration regarding the US-Kenya
FTA earlier this year, the ACC called for it to �prohibit
imposition of domestic limits on production or consumption of
chemicals and plastic and restrictions on cross-boundary trade of
materials and feedstocks�. Feedstocks could include plastic waste
for recycling.
They added that the US and Kenya should �enable trade in waste for
the purposes of sound management and recycling consistent with
relevant international commitments�.
Even so, David Azoulay, an attorney and director of the
environmental health programme at the Center for International
Environmental Law told Unearthed: �The suggestion to use this
potential agreement to preempt any national limitation on plastic
production and consumption is a clear indication of the ACC�s
objective to leverage such a trade agreement to circumvent global
efforts to curb plastic production and use, as well as newly
adopted provisions from the Basel Convention to better control the
global plastic waste trade.�
Jim Puckett, executive director of the NGO Basel Action Network
commented that it would also contradict the Bamako Convention, a
separate treaty in Africa.
�The effort to enlarge trade in waste and harmful chemicals in
between the US and Kenya is a rather insidious effort that, if
taken across Africa would go head to head against Africa�s Bamako
Convention � a treaty which prohibits virtually all plastic waste
imports into Africa as well as the import of many hazardous
chemicals,� he told Unearthed.
Kenya
Environmentalists are concerned the deal could also undermine
national efforts to limit plastic consumption, including new rules
on plastic bags.
Sub-Saharan Africa is thought to lead the world on plastic bag
laws, according to reports, with 34 countries adopting taxes or
bans.
Dorothy Otieno, the plastics programme co-ordinator at the Centre
for Environment, Justice and Development (CEJAD) in Kenya, told
Unearthed that this trade deal could threaten the momentum and
change created by these efforts.
�As a country we have made strides to reduce the plastics that are
used here, and which end up as waste � there is a ban on use and
manufacture of carrier bags and recently a ban on plastic in
protected areas � so this trade deal would diminish what we have
achieved as a country.�
But Kenyan politicians and trade groups said such fears will be
addressed. Negotiations began several weeks ago, but have recently
stalled due to coronavirus concerns.
Cornelly Serum, an MP for the ruling Jubilee Party and member of
the Trade and Industry Parliamentary Committee, told Unearthed:
�Fears that under the trade deal use of plastics might be
reintroduced into the country are valid� Trade associations
planning to expand their businesses in Africa � and mainly in Kenya
� are welcome but cannot use the deal to introduce materials that
have so far been banned and as a parliament we will not allow any
protocols likely to ruin our economy.�
Carol Karuga, CEO of broad-based lobby group the Kenya Private
Sector Alliance, added: �It does not augur well to ban use of
plastics materials in the economy and later reintroduce the same
through a trade deal� The deal before it is finally agreed will
have to be checked at all levels.�
Otieno also expressed concerns about the impact of more waste.
�There would be an increase in waste � some will be reused and
recycled but the majority will end up in dump sites. We will end up
in a situation where Kenya will become a dump site for plastic
waste,� she said.
�It clogs our waterways and our drainage systems and leads to
flooding. We also see the effect of pollution from the burning of
plastics � it produces dioxins and furans that lead to respiratory
diseases� Somebody can burn these wastes right next to your house
and suffer the impacts. We also see the aesthetic value of our
towns being reduced because of plastics.�
Last year, some of the ACC companies � including Shell, Exxon and
BASF � alongside major consumer goods and waste management
companies launched the Alliance to End Plastic Waste (AEPW),
committing $1bn, in part to finance waste management projects to
clean up and prevent plastic waste in Africa and Asia.
In the public letters, the ACC wrote that: �There is a global need
to support infrastructure development to collect, sort, recycle,
and process used plastics, particularly in developing countries
such as Kenya.
�Such infrastructure will create opportunities for trade and
investment and help keep used plastics out of the environment,
thereby reducing marine litter� The U.S. and Kenya can play a
strong role together in promoting innovative circular economy
solutions in East Africa that enable universal access to better
waste management capacity and for used plastics in all countries.�
The ACC argued in the documents obtained through FOIA that such
infrastructure will require the continuation of the plastic waste
trade and that the new rules could �slow efforts to address the
marine litter challenge� because a circular economy requires ample
feedstock.
�Increased barriers on global plastics trade will lead to increased
burdens on local plastic waste management, regardless of whether
the sourcing country has adequate domestic recycling
infrastructure,� they argued.
A spokesperson from the ACC told Unearthed that their concerns were
regarding how the restrictions could impede exports from low- and
middle-income countries to those with more infrastructure capacity.
The correspondence with the US government references both exports
and imports.
The documents also suggest that the US government supported the
AEPW. An official at USTR accepted an invitation from the ACC to an
event on the alliance in April 2019, responding that �what you are
doing with the Alliance is an important counter-narrative�.
A spokesperson from Shell told Unearthed: �Shell companies
participate in industry associations for many reasons. By nature
they are consensus-based organisations, but their positions don�t
necessarily reflect the same views as individual members. ACC is
one of a handful of US-based trade organizations that allows Shell
to exchange industry best practices around a range of issues,
including safety, climate change, and the sustainable use, disposal
and recycling of the products we collectively produce.�
Total referred us to their report on climate change, which states
that Total is �partially aligned� with the ACC�s position on
climate, but which makes no mention of plastics.
Exxon, DuPont, Dow and BASF referred us to the ACC for comment. The
US International Trade Commission, which is an independent federal
agency, told us it does not participate in trade negotiations and
referred us to USTR for comment. USTR has not responded to our
request.
A version of this article was published in the New York Times.
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