Lack of Cop 28 chemicals, plastic focus puzzling

Plastics production is a huge contributor to global CO2 emissions, but there are no signs that the sector will be discussed at Cop 28, writes Will Collins

The apparent absence of a focus on plastics in discussions during the upcoming UN Cop 28 climate summit is puzzling, considering the role that chemicals and plastics production play on both sides of the debate.

On one hand, the petrochemicals industry is the world's third-largest industry sub-sector in terms of direct CO2 emissions, according to energy watchdog the IEA. Petrochemical feedstocks are "the main long-term pillar of oil demand", the IEA says. But on the other hand, plastic can contribute to lower carbon emissions in various applications, including as a lightweight alternative material for car parts or packaging, or by prolonging the shelf life of perishable items to reduce food waste.

But a lack of globally harmonised regulation is impeding investment. A greater forum for discussing chemicals and plastics at Cop 28 could accelerate progress, but plastics do not feature on the Cop 28 presidency schedule — although there will be multiple events at the summit, some of which may focus on plastics.

Baby steps

The proliferation of sustainability commitments in the plastics industry accelerated in 2017 and 2018, when the "Blue Planet effect" focussed public discourse around plastic waste in the environment, particularly the seas. But the discussion has evolved since then ,with the carbon benefits of recycled and bio-based feedstocks now an equally prominent part of discussions.

Many of the largest global petrochemical and polymer producers have announced measures to reduce their carbon footprints, including by producing more recycled or non-fossil based plastics. Argus recently examined some of these pledges and found that the firms surveyed have committed to market a total of around 17mn t/yr of products with some recycled or bio-based content by 2030. This is not a small volume, and the companies surveyed do not account for all producers that have made sustainability commitments. But measures will need to continue to be scaled up to be effective in the context of estimated global plastic production of more than 350mn t/yr in 2021. This will require significant investment and likely a trusted framework around which future developments can be focussed.

Many producers are taking other steps to reduce their Scope 1 emissions — those directly from an organisation's activity. Some are switching away from fossil fuels as a source of heat and power, including Brazilian firm Braskem, which has replaced steam-based turbines with electric motors at its Sao Paolo steam cracker. And collaborations involving Dow, Shell, Sabic and BASF are developing electrically heated steam cracker furnaces, which could reduce emissions by up to 90pc.

But again, scale will be the key. Such changes are not cheap and firms will look for assurances that investments will not make them uncompetitive against peers that retain traditional production processes.

Brick by brick

Tackling emissions in chemicals and plastics is multi-faceted and require a large number of investment decisions. The polymer producers surveyed by Argus own or are partners in around 60 mechanical and chemical recycling projects, but the combined input capacity of these projects is only around 3.5mn t/yr.

Scaling up will require many more projects, with many more investors to be brought on side. Convincing multiple decision-makers that investments are worthwhile and financially viable is more likely to be challenging.

The UN global plastics treaty negotiations, which recommenced in Nairobi this week, have the stated aim of harmonising the patchwork of regulations governing the sale, disposal and recycling of plastics, which can differ widely between and even within regions. But it is a mammoth task. The global nature of the chemical and plastic industries, and the fact that they are spread across a huge number of disparate applications, add to the complication. The EU's prolonged negotiations about how to apply mass balance accounting to attribute chemically-recycled content in plastics is another example of how agreements can be difficult because such a large number of stakeholders are involved in the discussions.

The exclusion of petrochemicals and polymers from the EU's initial Carbon Border Adjustment Mechanism (CBAM) also hints at the difficulty of applying regulations to such a wide-ranging industry. Proponents would argue that including the industries in CBAM would give it confidence that investments in greener processing technologies would not make them uncompetitive in the global market. Opponents might point to a potential to disrupt imports, upon which Europe relies for a number of chemical and polymer products.

The petrochemicals industry cannot rely on legislators to make the case for investment. It needs to demonstrate viable technologies for investors and legislators to get behind. For example, an EU decision on mass-balance accounting will not drive investment on its own unless chemical recycling and the supply chain around it can be shown to work on a commercial scale.

But clear, unilateral regulations are needed to help firms assess whether to invest in projects that could improve sustainability, and ensure that improvements take place globally rather than piecemeal or region by region. Discussion at Cop 28 about how to support the petrochemical and plastic industries to lower their negative climate impact, while preserving these benefits, would surely be valuable.