The Plastic Industry Faces Unprecedented Pressure
Global plastic production has tripled in 25 years and growth is not slowing. But increasing pressure from NGOs and public opinion is forcing the sector to question itself.
The production of recycled plastics, still in its infancy, is taking off. The contrast is striking. On the one hand, images of oceans polluted by plastic waste make the front page of the media, put forward by environmental protection associations and repeated on social networks, raising awareness even more public. On the other hand, global production of plastics continues to grow: + 4.5% per year on average since 1990, according to figures from PlasticsEurope, which defends the interests of the sector. The planet consumes three times more plastic than 25 years ago, 200 times more than in 1950.
And it’s not over. Today, an African or an Indian uses an average of 4 kg of plastic per year, compared to 60 or even 80 kg for a European or an American, estimates the International Energy Agency (IEA). The growth potential in emerging countries is enormous.
Plastic is rather dramatic for the oceans. Following current trends, global production of the main resins from which plastics are produced (polyethylenes, polypropylenes, polystyrenes, PVC, etc.) is set to increase further by 70% by 2050. Total and Aramco’s major ambitions in the petrochemical industry. Except that this scenario of sustained growth appears increasingly fragile in the face of the serious problems it would pose for the environment, starting with the management of packaging waste.
Packaging is not the only outlet for the sector, but it is by far the first, absorbing almost 40% of production. For 18 months, there has been a real awareness of the plastic industry. The environmental issue has become the number one challenge, an existential threat for producers. We no longer say that the problem of pollution does not concern us. Pressure from large customers.
The pressure came from customers, Coca-Cola, Unilever, Danone and others, who themselves are trying to respond to the growing pressure from consumers. The industry has remained confident for a long time but we can sense that it is starting to worry, believe activists at Greenpeace. From the American Dow to the German BASF via LyondellBasell, Ineos and Total, all the major producers of plastic resins are looking for a solution, even if growth is still there for the moment.
The bans have limited impact. The most concrete change concerns immediately the rapid disappearance of plastic bags in many countries and the ban on single-use products (straws, plates and cutlery, cotton swabs, etc.) which is looming in Europe and elsewhere. These bans would only affect 3 to 4% of global demand for plastic though. But if the pressure increases further and recycling is growing strongly, there would be enough to potentially halve the annual growth of the plastics sector.
Industrialists have for a while mobilized their lobbies to counter these prohibitions. But today, they are mainly trying to find solutions. This starts with the fight against pollution. In January, around twenty multinationals launched the Alliance to End Plastic Waste. It includes large producers of plastics such as Total, but also companies consuming packaging such as Procter & Gamble or Henkel, as well as players in waste management such as Suez, Veolia and Dumpster Rental King.
They promised to spend at least $ 1 billion over five years to fund collection, recycling or cleaning projects in emerging countries. The mounting pressure also encourages them to change their production processes. Consumer brands are increasingly asking for recycled plastics, made from industrial or household waste, for their packaging. Like BASF and others, the French group is betting on the development of chemical recycling at very high temperatures, now in its infancy, which would increase the rate of reuse of plastics. Finally, some are betting on bioplastics: Total has opened a production unit for bioplastics from sugar cane in Thailand. Volumes remain miniscule on the global plastics market, but the trend is there. The sector is aware that the pressure is not about to ease.
At just over 6 am in this Baltic winter, it is of course still dark. The ferry from Rostock has just docked at Gedser, the southernmost port in the Danish archipelago. It landed a truck trailer full of goods and German border crossers. Not far away the Danish energy company Orsted, founded 50 years ago to exploit oil and gas, made a spectacular pivot towards renewables in 2008. To the point of becoming the world leader in offshore wind power and earning the title of the most sustainable company in the world.
The park at Nysted, 13 km from the Danish coast, has 72 turbines. It was one of the first built by Orsted in 2003. At the time, this wind farm was one of the largest in the world. Wind turbines at sea are amazing. In the vast workshop, welders in white helmets and blue coveralls work on huge sheet metal plates. The panels are intended for the manufacture of ocean liners. In the depths of the wave of 2009, the shipbuilder embarked on offshore wind power to diversify its revenues. A market of the future, with strong regional spin-offs, at a time when the nationalized company has to change its main shareholder.
French shipyards have already sold three electrical substations abroad, including the one delivered to E.On and Statoil for the Arkona wind farm in the German Baltic Sea. This should be seen as normal, but Legrand will soon be an exception among CAC40 companies. The French group, specializing in products and services for electrical infrastructure, is preparing to appoint Angeles Garcia-Poveda as chairman of its board of directors.
Angeles Garcia-Poveda has sat on the board of directors of the French group for eight years. She will replace the current president, Gilles Schnepp, in early July. Angeles Garcia-Proveda will chair Legrand’s board of directors. The economic growth that the world has experienced since the Second World War would not have been …