What’s the deal with the Plastic Soup again?
March 15 2024 That’s what readers of news site nu.nl on their comment platform Nujij were wondering. In a recent […]
21 April 2020
The economic effects of the coronavirus are striking the oil and gas industry. Since the beginning of the year, the sector has lost 45% of its value. The companies, including large multinationals, are begging for government support and are putting even more emphasis on plastics as an alternative earning model. But they are not going to make it.
Last week a report was published by the Center for International Environmental Law (CIEL) called “Pandemic Crisis, Systemic Decline: Why Exploiting the COVID-19 Crisis Will Not Save the Oil, Gas, and Plastic Industries”. This report offers a thorough analysis of a conservative sector that continues to bet against its better judgment on the wrong horses to survive.
The oil and plastics industry is in crisis because of COVID-19. The demand for oil has dropped by tens of percent. Planes are on the ground, and people are sitting at home. As a result of the declining demand for kerosene and petrol, storage tanks have hardly any capacity left. Oil suppliers can no longer sell their fossil fuels. Since today, for the first time in history, the price of a barrel of oil is even negative. Dozens of companies, especially in the American fracking industry, are threatening to fall or are already bankrupt.
The corona crisis has ruthlessly exposed the sector’s long-standing fundamental weaknesses, CIEL writes. Competition with renewable energy sources, the rise of the electric car, political and social pressure to make it more sustainable, and to comply with climate agreements all mean that the glory years of this industry are over.
The oil and plastics industry is integrated. Oil producers such as Exxon and Shell are also producers of plastics. By investing heavily in plastics, an attempt is being made to compensate for the increasing oil losses. These investments have amounted to billions of dollars in recent years. This is also the main reason why the plastics industry is making itself heard right now. The lobby promotes plastic as a safe product that prevents contamination with corona. It also wants environmental measures, such as a ban on plastic bags, to be reversed. The underlying aim is to continue selling as much plastic as possible.
Warnings not to invest in plastic production have been circulating for several years, also, from financial experts. The risks for investors have become too high. Especially government measures to curb the use of plastic put the profit expectations under pressure.
CIEL calls on governments not to use scarce public resources now to keep a heavily polluting industry afloat. On the contrary, governments must focus their attention on how the energy transition can be accelerated, and the production of plastic drastically reduced.
March 15 2024 That’s what readers of news site nu.nl on their comment platform Nujij were wondering. In a recent […]
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The waste-export to countries outside of the EU has been restricted The Netherlands is against a carpet ban on shipping of plastic waste.
The waste-export to countries outside of the EU has been restricted The Netherlands is against a carpet ban on shipping of plastic waste.