The oil industry is betting on investments of more than $400 million in plastics as countries are starting to meet net-zero emissions targets.
A new report carried out by Carbon Tracker and SYSTEMIQ found that as oil demand reduces in the transport sector, petro-companies are starting to invest in plastics, fuelling suggestions of peak oil demand.
But most countries are trying to meet net-zero emissions targets, which include a reduction in plastic consumption like bottles, bags and the content of beauty products.
To date, 40% of plastic waste ends up in the environment with 11mt finding its way into the oceans and can take years to break down. When it does, these plastics enter water supplies and rivers affecting microecology and invertebrate life (such as bees and pest-controlling insects).
Carbon tracker introduced the idea of ‘stranded assets’ which account for financial implications “as a result of changes associated with the transition to a low-carbon economy”. In short, this means, as governments become legally required to meet a 1.5c net-zero emissions target, lower demand for oil will mean lower financial gain. As such, the oil industry’s investment of $400 million+ in plastics will provide little to no return as plastics become internationally outlawed. Instead, investment is being guided towards renewables and eco-friendly solutions.
This investment signifies the last throw of the dice for the oil industry. As demand for oil dwindles, a lack of foresight and ideas of where to go next has forced it into a corner. Green energy is the enemy of the oil industry, and buying in is a pride it will not swallow. Renewables are set to take over, and as costs are now cheaper than oil, many won’t doubt switching to a greener energy practice.