Oct. 05–Jim Becker arrived in Asia in 2010 to market plastics for Chevron Phillips Chemical only to be confronted by a problem that the petrochemicals industry had for years done little to address: plastic waste.
It littered streets. It clogged rivers that swelled during storms and emptied into the ocean. It washed up on beaches and rode out with the tide.
“I got to see it first hand, and it really solidified in my mind,” Becker said. “We’ve got to get this out of the environment.”
Eight years later, some of the world’s largest petrochemicals companies have begun to take that responsibility more seriously as billions of tons of plastic waste imperil both the environment and future of their industry. No longer able to discount their role in creating the problem, chemical makers have turned their attention to waste management and recycling as plastics pile up in landfills and chokes the world’s oceans.
The Ocean Conservancy, a Washington environmental advocacy group, has estimated that the world’s oceans now contain more than 150 million metric tons of plastic waste — nearly the weight of a blue whale, the world’s largest animal. That amount is expected to increase by an estimated 8 million metric tons a year, putting plastic waste on track to outweigh all the fish in the ocean by 2050.
“Plastics in the environment has reached crisis levels,” said Carroll Muffett, CEO of the Center for International Environmental Law an environmental law firm with offices in Washington and Geneva. “We can’t solve that problem by only beginning to deal with plastic once it’s in the ocean.”
Much as climate change threatens the long-term future of the oil and gas industry, plastic waste is becoming an existential issue for the petrochemicals industry that has become a key driver of the Gulf Coast economy, employing tens of thousands of workers and attracting billions of dollars in investments in new production plants. Cities, states and countries around the world are restricting the use of straws, shopping bags and other disposable items that account for a substantial amount of plastic debris.
Large corporations, including Starbucks and McDonald’s, have made similar moves, testing alternatives to plastic straws and intensifying the focus on reducing plastic waste at at time when environmental groups are leveraging social media and other platforms to draw widespread attention to pollution problems.
Jonas Oxgaard, a chemicals analyst with Sanford C. Bernstein & Co., a New York investment management and research firm, said such measures have yet to curtail growth in plastics demand, driven largely by emerging economies in Asia and elsewhere. But, he noted, that petrochemical companies are examining the money-making potential of investments in recycling and other reuse strategies as investors question how they’re preparing for the future.
“The industry, for the first time in years, is beginning to see sustainability as an opportunity, not just a threat,” Oxgaard said. “You can either take control and lead the industry to best the solutions, or leave it to the politicians.”
This attitude marks something of a reversal for the petrochemicals industry, which supplies the base chemicals and resins needed to manufacture a wide range of plastic products from bags and bottles to car parts and construction materials. Producers for years took a hands-off approach to waste management, arguing that consumers bore the greatest responsibility in ensuring proper disposal of the plastics they used.
No longer. At Chevron Phillips Chemical, for example, Becker was recently named to lead The Woodlands company’s strategy to reduce plastic waste by assuming a greater role in recycling initiatives, even as petrochemical makers churn out record amounts of plastic. In the coming years, Becker expects Chevron Phillips, a joint venture of the giant oil company and Houston refiner Phillips 66, to invest in research to develop materials that are easier to recycle and help its customers design products and packaging using greater amounts of re-purposed plastic.
“When we have meetings with customers, 65 percent of the conversation revolves around sustainability,” Becker said. “Five years ago, that didn’t happen.”
Earlier this year, the Houston chemicals maker LyondellBasell formed a joint venture with French waste handler Suez to purchase Quality Circular Polymers, a recycling company in The Netherlands. The goal: To establish a more profitable recycling model as Europe emerges as a leader in reducing its use of plastics.
LyondellBasell also has partnered with a German research university to develop technology to revert plastic waste to its base chemical components for use in manufacturing new plastics, a circular system that would ultimately reduce the amount of feedstock needed to make and re-make the sorts of single-use items that face mounting scrutiny.
“This is actually unzipping the molecule and taking it back to its original form,” CEO Bob Patel said in an interview. “That (research) will take a long time, but we think that could be the ultimate solution.”
Other companies have turned their attention to bioplastics, which are either produced from renewable sources such as vegtable oils and food waste, or designed to break down more quickly in the environment. French oil company Total, for example, last year partnered with Dutch food and biochemicals company Corbion to produce biodegradable plastics derived from sugar or starch. Production at a plant in Thailand is expected to begin this year.
The focus on reducing plastic waste comes, ironically, amid a boom in U.S. petrochemicals production centered on the Gulf Coast, which has attracted some $60 billion in investment to build and expand manufacturing plants. Dozens are coming online with an eye toward India, China, the Philippines and other countries where population growth and economic development have boosted demand for packaging, consumer goods and construction materials.
That growth presents a paradox for plastics producers in the U.S. and elsewhere. Though pollution is a global problem, many Asian countries in particular lack the necessary collection and processing systems to dispose of that waste. It’s estimated that China, Indonesia, the Philippines, Thailand, and Vietnam together account for half of the plastics that find their way into the ocean.
The issue has become so pressing that Cal Dooley, who for 10 years has headed the American Chemistry Council, an industry trade group, decided in June to delay his retirement plans until the end of next year to lead the organization in developing strategies to reduce plastic waste, particularly in Asia. He has worked to unite the major petrochemicals companies, manufacturers, brand owners and plastics consumers in pursuit of that goal.
This summer, for example, the trade group helped launch Circulate Capital, an investment firm formed to finance waste management initiatives in Southeast Asia. The firm, backed by a range of plastics manufacturers and environmental groups, expects to begin investing in projects early next year.
“The petrochemicals industry has really had a step change in the last year or so,” said Rob Kaplan, firm’s founder and CEO. “Everybody wants to end plastic waste.”
Environmental experts, however, caution that such efforts account for only a fraction of the work necessary to clean up the oceans, stem the flow of debris and build systems to repurpose discarded plastics. The solution, they say, must involve consumer education, government regulation, corporate involvement and billions of dollars in waste management investments, as well as a substantial reduction in the use of disposable plastics.
“We’re not going to be able to recycle our way out of the problem, just as we can’t reduce our way out of problem,” Kaplan said, adding that the ultimate solution will require a combination of those two approaches.
The challenge is substantial. Surging supplies of inexpensive feedstocks have made plastics cheaper to produce at a time when recycling remains costly and challenging by comparison. Effective recycling requires the sorting and cleaning of vast amounts of mixed plastics, an endeavor that becomes more complicated when consumers improperly combine trash and recyclables in curbside bins and other collection deposits.
Recycling costs have risen this year after China, long a major consumer of scrap plastics, restricted its imports of those materials as part of a wider environmental crackdown. That shift has forced recyclers, including Houston-based Waste Management, to find new markets for the scrap or otherwise send it to the landfill.
A recent report by the International Energy Agency concluded that the future of the global petrochemicals industry could take two distinct paths, depending on whether governments, corporations and consumers effectively transform their waste management practices and reduce or eliminate the use of materials that are difficult to dispose or reuse.
If the status quo holds, the agency forecasts a 70 percent increase in plastics production by 2050, largely to feed demand for packaging and construction materials. At that point, less than 20 percent of recyclable plastic would be collected worldwide, and the quantity of plastic in the ocean would exceed 500 million metric tons.
A divergent scenario, however, emerges if the petrochemicals industry and its many customers take steps to meet sustainability goals recently set forth by the United Nations to address issues with poverty, pollution and climate change. Plastic production from recycled resins would more than double by 2050, reducing chemical demand by some 70 million metric tons. The amount of plastic flowing into the ocean each year would drop by half by 2030 and continue to fall in subsequent years.
The report concluded that there is “no single prescription” for solving mounting problem of plastic waste.
“It is no understatement to say we live in a world dependent on chemicals,” the IEA said. “As with most dependencies, there is an accompanying burden.”
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