Daniel Layug, CFA
4 min readNov 8, 2021

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Plastics are the New Cement: Climate Impact of Plastics

Plastic is a global problem. The ENVIRONMENTAL impact of plastics (i.e. marine plastics) is front and center in discussions of circular economy. Particularly in developing island nations, the word “marine plastics” conjures up an image of a sea turtle with a plastic straw lodged in its nose. However, what about the CLIMATE impact of plastics? How about the Greenhouse Gases released by the industry?:

Shelves of plastics bottles in a grocery store. Photo by Dan Layug

The Plastic value chain emits 3%-3.8% of global GHGs[i]

By 2030, GHG from the sector could reach 1.34 billion tCO2e per year.[ii] The resin refining, manufacturing and end-of-life activities in the value chain of plastics emit as much GHG as the value chain of cement (If you include the GHG emitted as a result of transportation and extraction of petroleum which is the feedstock of plastic).[iii] This is because of the intense heat and energy required in the cracking of petroleum to produce resin.[iv]

Make up of global GHG emissions by Sector, End Use and Gas type. Photo on WRI website

GHG across the value chain

Total life cycle GHG emissions for fossil fuel-based plastics are expected to be 4.1 kgCO2e per kg of plastic in 2050 under the current energy mix.[v] During the manufacturing process, the Resin-production stage generated the majority of emissions (61%), followed by the Conversion stage (30%), and End-of-life stage (9%).[vi] However, in countries such as the US, a quarter of emissions are already released before manufacturing, in the fracking and transportation of fossil fuel feedstock.[vii]

The finished product plastic which is used in Packaging (42%), Electrical, transportation and machinery (39%) and Construction (19%) also has non-GHG warming effects in itself. Colorful microplastics that escape into the atmosphere absorb radiation and have a warming effect on the planet.[viii]

Plastics support the Fossil Fuel industry

According to the International Energy Agency, plastics are the key driver for petrochemicals from an energy perspective.[ix] Over the past 40 years, global plastics production has quadrupled. The plastic manufacturing process currently consumes ~9% and 3% of global oil and natgas, respectively. The industry is forecasted to eventually account for 20% of oil consumption by 2050.[x]

Strategies to Decarbonize Plastic

Unfortunately, only 14% of all plastic packaging is recycled. 14% of are incinerated, 40% are landfilled, 32% leak into oceans/land, and 14% are recycled.[xi]

Aside from reducing demand and reusing plastics, the low-hanging fruit in significantly reducing in GHGs across the value chain of plastic (while minimizing negative externalities) involve manufacturing sourcing power solely from clean energy and extensive recycling.

1. Manufacturers and recyclers sourcing power solely from renewable energy: Under a 100%-clean energy scenario in 2050, the embodied carbon of plastics would drop by 62%.[xii]

2. Investments in recycling facilities: Some life cycle assessments for recycled plastics cite an 80% reduction in greenhouse gas emissions compared to virgin plastics.[xiii] Policy-makers need to work together to firstly create an enabling and investible environment for commercial-grade materials recovery facilities.

For bio-plastics, a cost-benefit analysis still needs to be done for it to be an effective decarbonization strategy

Bio-plastics are an alternative. Fossil fuel-based materials can be replaced by seaweed, mushroom, corn and sugarcane-based materials. However, from a Climate & Environmental point of view, cost-benefit analysis still needs to be done because of the potential negative environmental externalities. Land is an issue as shift to bio-plastics requires ~5% of all arable land.[xiv] Scalability of production is also a challenge as many seaweed and mushroom-based alternatives lack automation/mechanization in their value chain. Furthermore, End-of-Life infrastructure and public education are required. New commercial-grade composting facilities will need to be put up to support the composting of bio-plastics as the existing waste management facilities cater mainly to breaking down fossil fuel-based plastics. And public education on proper segregation of bio-based and petroleum-based plastics will need to be rolled out to improve the investment attractiveness of materials recovery facilities.

Later articles on plastics will discuss this cost-benefit analysis and other policy tools to decarbonize plastics.

[i] R. Geyer, A brief history of plastics: https://link.springer.com/chapter/10.1007%2F978-3-030-38945-1_2

[ii] IFC Report on Plastics (Reduce, Reuse, Recycle): https://www.ifc.org/wps/wcm/connect/industry_ext_content/ifc_external_corporate_site/manufacturing/resources/strengthening+sustainability+in+the+plastics+industry

[iii] WRI Climatewatch: https://www.climatewatchdata.org/key-visualizations?visualization=2; https://www.nature.com/articles/s41558-019-0459-z

[iv] Ford, Jones, Jambeck, et all, The fundamental links between climate change and marine plastic pollution: https://www.sciencedirect.com/science/article/pii/S0048969721054693#bb0215

[v] Zheng, Suh, Strategies to reduce global carbon footprint: https://www.nature.com/articles/s41558-019-0459-z

[vi] Zheng, Suh, Strategies to reduce global carbon footprint: https://www.nature.com/articles/s41558-019-0459-z; Cross-checked with Plastic & Climate: https://www.ciel.org/plasticandclimate/

[vii] The New Coal: https://www.beyondplastics.org/plastics-and-climate

[viii] Big questions surround microplastics’ climate impact: https://www.eenews.net/thank-you-article-4/

[ix] International Energy Agency: https://www.iea.org/news/petrochemicals-set-to-be-the-largest-driver-of-world-oil-demand-latest-iea-analysis-finds

[x] IFC Report on Plastics (Reduce, Reuse, Recycle): https://www.ifc.org/wps/wcm/connect/industry_ext_content/ifc_external_corporate_site/manufacturing/resources/strengthening+sustainability+in+the+plastics+industry

[xi] Study by Ellen MacArthur Foundation & McKinsey: https://ellenmacarthurfoundation.org/the-new-plastics-economy-rethinking-the-future-of-plastics-and-catalysing

[xii] Zheng, Suh, Strategies to reduce global carbon footprint: https://www.nature.com/articles/s41558-019-0459-z

[xiii] IFC Report on Plastics (Reduce, Reuse, Recycle): https://www.ifc.org/wps/wcm/connect/industry_ext_content/ifc_external_corporate_site/manufacturing/resources/strengthening+sustainability+in+the+plastics+industry

[xiv] Zheng, Suh, Strategies to reduce global carbon footprint: https://www.nature.com/articles/s41558-019-0459-z

Disclaimer: This post reflects my personal views and not those of the International Finance Corporation, World Bank, or any other member of the World Bank Group

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Daniel Layug, CFA

Climatetech | Sustainable Finance & ESG Investing | Georgetown Alumni Investor Network | INSEAD Young Alumni Achievement Awardee | GenT Asia Leader of Tomorrow