Clean energy investment may hit $2 trillion a year by 2030: IEA

Wind turbines photographed off the coast of Wales. Clean energy investment could be on course to exceed $2 trillion per year by 2030, according to the International Energy Agency.

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Clean energy investment could be on course to exceed $2 trillion per year by 2030, an increase of over 50% compared to today, according to analysis from the International Energy Agency.

The projection is found within the Paris-based organization’s World Energy Outlook 2022, which was published on Thursday morning.

It’s based on the IEA’s Stated Policies Scenario, which factors in what it calls “the latest policy settings worldwide.”

Despite this increase, the IEA repeated its assertion that clean energy investment would still need to hit over $4 trillion by 2030 in its Net Zero Emissions by 2050 Scenario.

This, the IEA’s report said, highlighted “the need to attract new investors to the energy sector.”

The shadow of 2015’s Paris Agreement looms large over the IEA’s report.

The landmark accord aims to “limit global warming to well below 2, preferably to 1.5 degrees Celsius, compared to pre-industrial levels.”

Cutting human-made carbon dioxide emissions to net-zero by 2050 is seen as crucial when it comes to meeting the 1.5 degrees Celsius target.

The newest edition of the World Energy Outlook comes at a time of significant uncertainty and volatility in global energy markets.

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According to Fatih Birol, the IEA’s executive director, the changes taking place appear to be seismic ones.

“Energy markets and policies have changed as a result of Russia’s invasion of Ukraine, not just for the time being, but for decades to come,” he said. “Even with today’s policy settings, the energy world is shifting dramatically before our eyes.”

Birol added, “Government responses around the world promise to make this a historic and definitive turning point towards a cleaner, more affordable and more secure energy system.”

Peak demand for coal, gas and oil?

In a statement accompanying the report’s release, the IEA said its Stated Policies Scenario had “global demand for every fossil fuel exhibiting a peak or plateau.”

Under this outlook, “coal use falls back within the next few years, natural gas demand reaches a plateau by the end of the decade, and rising sales of electric vehicles … mean that oil demand levels off in the mid-2030s before ebbing slightly to mid-century.”

The IEA’s statement also noted, however, that there was a huge amount of work to be done in order to keep global warming to 1.5 degrees Celsius.

Under its Stated Policies Scenario, fossil fuels’ share in the planet’s energy mix would be a little over 60% by the middle of this century.

“Global CO2 emissions fall back slowly from a high point of 37 billion tonnes per year to 32 billion tonnes by 2050,” it added.

“This would be associated with a rise of around 2.5 °C in global average temperatures by 2100, far from enough to avoid severe climate change impacts.”

The above echoes a separate report published by U.N. Climate Change this week.

In an announcement Wednesday, the U.N. said that “the combined climate pledges of 193 Parties under the Paris Agreement could put the world on track for around 2.5 degrees Celsius of warming by the end of the century.” 

U.N. Climate Change said its new report also showed that countries’ pledges, as they stand now, would see emissions jump by 10.6% by the year 2030, compared to levels in 2010.

The U.N.’s analysis comes ahead of next month’s COP27 climate change summit in Sharm el-Sheikh, Egypt.

Orsted to use more fossil fuels as energy crisis continues

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Energy firm Orsted is to continue or restart operations at three fossil fuel facilities after being ordered by Danish authorities to do so, as governments around Europe ready themselves for winter amid the energy crisis.

In a statement over the weekend, Orsted — whose biggest stakeholder is the Danish state — said the direction had been made “to ensure the security of the electricity supply in Denmark.”

Orsted said the order applied to “unit 3 at Esbjerg Power Station and unit 4 at Studstrup Power Station, which both use coal as their primary source of fuel, and unit 21 at Kyndby Peak Load Plant, which uses oil as fuel.”

Esbjerg Power Station had been slated for decommissioning on March 31, 2023, it added, while the other two units were already decommissioned.

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“In order to ensure the security of the electricity supply, the Danish authorities have today ordered us to continue as well as resume operations at some of our oil- and coal-fired power stations,” Mads Nipper, the Orsted CEO, said.

“We will, of course, comply with the Danish authorities’ order, and we’ll now begin preparing and maintaining the units as well as securing the staffing necessary to operate them,” Nipper added.

Orsted said all of the units concerned would need maintenance in order to get them ready for operation, while “highly specialised workers” would also have to be trained to operate the sites.

The company said it had been ordered to keep the three units running until June 30, 2024. Orsted, which is a major player in wind power, has set itself a target of being carbon neutral by the year 2025.

The news will dismay those opposed to the continued use of fossil fuels. Coal has a substantial effect on the environment, with Greenpeace describing it as “the dirtiest, most polluting way of producing energy.”

Elsewhere, the U.S. Energy Information Administration lists a range of emissions from coal combustion, including carbon dioxide, sulfur dioxide, particulates and nitrogen oxides.

“We still believe that we, as a society, must phase out the use of gas, oil, and coal as soon as possible, but we’re in the middle of a European energy crisis, and we will, of course, contribute to ensuring the electricity supply to the best of our ability,” Orsted’s Nipper said.

A few days before Orsted’s announcement, another big European energy firm, Germany’s RWE, said three of its lignite, or brown coal, units would “temporarily return to [the] electricity market to strengthen security of supply and save gas in power generation.”

RWE said each of the units had a 300 megawatt capacity. “Their deployment is initially limited until 30 June 2023,” it added.

The news about RWE and Orsted comes at a time when Europe is scrambling to shore up energy supplies as the war in Ukraine continues. Russia was the biggest supplier of both petroleum oils and natural gas to the EU last year, according to Eurostat.

It has significantly reduced flows of natural gas to Europe after Western nations imposed sanctions on the Kremlin as a result of its unprovoked invasion of Ukraine.

Last week, unexplained leaks affected both the Nord Stream 1 and 2 pipelines, major pieces of infrastructure built to funnel natural gas from Russia to Europe via the Baltic Sea.

—CNBC’s Holly Ellyatt contributed to this report

Electric vehicle (EV) sales set to hit an all-time high in 2022, IEA says

Tesla electric cars photographed in Germany on March 21, 2022. According to the International Energy Agency, electric vehicle sales are on course to hit an “all-time high” this year.

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Electric vehicle sales are on course to hit an all-time high this year, but more work is needed in other sectors to put the planet on course for net-zero emissions by 2050, according to the International Energy Agency.

In an announcement accompanying its Tracking Clean Energy Progress update, the IEA said there had been “encouraging signs of progress across a number of sectors” but cautioned that “stronger efforts” were required to put the world “on track to reach net zero emissions” by the middle of this century.

The TCEP, which is published yearly, looked at 55 parts of the energy system. Focusing on 2021, it analyzed these components’ progression when it came to hitting “key medium-term milestones by the end of this decade,” as laid out in the Paris-based organization’s net-zero pathway.

On the EV front, the IEA said global sales had doubled in 2021 to represent nearly 9% of the car market. Looking forward, 2022 was “expected to see another all-time high for electric vehicle sales, lifting them to 13% of total light duty vehicle sales globally.”

The IEA has previously stated that electric vehicle sales hit 6.6 million in 2021. In the first quarter of 2022, EV sales came to 2 million, a 75% increase compared to the first three months of 2021.

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The IEA said both EVs and lighting — where more than 50% of the worldwide market is now using LED tech — were “fully on track for their 2030 milestones” in its net-zero by 2050 scenario.

Despite the outlook for EVs, the IEA separately noted that they were “not yet a global phenomenon. Sales in developing and emerging countries have been slow due to higher purchase costs and a lack of charging infrastructure availability.”

Overall, the rest of the picture is a more challenging one. The IEA noted that 23 areas were “not on track” with a further 30 deemed as needing more effort.

“Areas not on track include improving the energy efficiency of building designs, developing clean and efficient district heating, phasing out coal-fired power generation, eliminating methane flaring, shifting aviation and shipping to cleaner fuels, and making cement, chemical and steel production cleaner,” the IEA said.

The shadow of 2015’s Paris Agreement looms large over the IEA’s report. Described by the United Nations as a “legally binding international treaty on climate change,” the accord aims to “limit global warming to well below 2, preferably to 1.5 degrees Celsius, compared to pre-industrial levels.”

Cutting human-made carbon dioxide emissions to net-zero by 2050 is seen as crucial when it comes to meeting the 1.5 degrees Celsius target.

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In a statement issued Thursday the IEA’s executive director, Fatih Birol, appeared cautiously optimistic. “There are more signs than ever that the new global energy economy is advancing strongly,” he said.

“This reaffirms my belief that today’s global energy crisis can be a turning point towards a cleaner, more affordable and more secure energy system,” he added.

“But this new IEA analysis shows the need for greater and sustained efforts across a range of technologies and sectors to ensure the world can meet its energy and climate goals.”

The IEA’s report comes at a time when the debate and discussion about climate goals and the future of energy has become increasingly fierce.

This week, the U.N. secretary general said developed economies should impose an extra tax on the profits of fossil fuel firms, with the funds diverted to countries affected by climate change and households struggling with the cost-of-living crisis.

In a wide-ranging address to the U.N. General Assembly in New York, Antonio Guterres described the fossil fuel industry as “feasting on hundreds of billions of dollars in subsidies and windfall profits while households’ budgets shrink and our planet burns.”

As Elon Musk backs fossil fuels, one strategist sends warning over EV sales

The uptake of electric vehicles has increased in recent years, as countries around the world attempt to reduce the environmental effects of transportation.

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Recent comments from Elon Musk about the need for more oil and gas reflect a broader concern that the uptake of electric vehicles will be hampered by rising electricity prices, according to the head of equity strategy at Saxo Bank.

Speaking to CNBC’s “Street Signs Europe” on Tuesday morning, Peter Garnry said car manufacturers would face headwinds going forward.

“We see that in the 12 month trailing auto sales figures coming out of the U.S. and Europe — they’re coming down and they’re coming down pretty hard in Europe.”

On the electric vehicle front, Garnry noted that while the segment was “still expanding, expanding rapidly” there were also areas of potential concern.

“I don’t think it was a coincidence that you had Elon Musk in Stavanger, in Norway, talking about ‘please don’t decommission any more nuclear power plants’, you know … ‘we need oil and gas to do the clean transition, we need that bridge.'”

“And I think he’s very well aware that you cannot sell a lot of electrical vehicles with electricity prices going through the roof right now.”

“I mean, the cost advantage for electric vehicles versus a gasoline car is fast diminishing here in Europe, and I’m really wondering to what degree that will begin to impact sales for EVs.”

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Garnry’s remarks refer to a recent interview Musk gave at the ONS 2022 Conference in Norway, in which he offered up his opinion on fossil fuels and the wider energy transition.

“I, actually, am not someone who would tend to, sort of, demonize oil and gas, to be clear,” Musk said. “This is necessary right now, or civilization could not function.”

“And … at this time, I think we actually need more oil and gas, not less, but simultaneously moving as fast as we can to a sustainable energy economy,” the Tesla chief went on to state.

Musk, who also stressed the importance of renewables such as hydro, solar, geothermal and wind, later described himself as “pro nuclear” and said “we should really keep going with the nuclear plants.”

With European economies facing an energy crisis and soaring prices over the coming months, there have been concerns in some quarters that the increasing cost of charging an EV will disincentivize uptake among consumers.

In the U.K., at least, many discussions about the cost of charging an electric vehicle have taken place in recent weeks, especially after regulator Ofgem hiked the energy price cap.

The U.K.’s new Prime Minister, Liz Truss, is set to announce a support package to address the cost-of-living crisis imminently, meaning that the overall effect of Ofgem’s decision is still uncertain.

In the days following the announcement of the new price cap, a spokesperson for motoring organization the RAC sketched out the current state of play.

“Despite recent falls in the price of petrol [gasoline] and diesel, the cost of charging at home is still good value compared to paying for either fuel, but again underlines just how the rising cost of electricity is affecting so many areas of people’s lives,” Rod Dennis said.

“We’re also aware that public chargepoint operators are having no choice but to increase their prices to reflect the rising wholesale costs they’re faced with, which will heavily impact drivers who have no choice other than to charge up away from home,” Dennis added.

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In the U.K., the current state of play when it comes to EVs makes for interesting reading.

On Monday, the Society of Motor Manufacturers and Traders said new registrations for battery electric vehicles in the U.K. hit 10,006 in August 2022, a year-on-year jump of 35.4%.

The SMMT nevertheless noted that “growth in this segment is slowing, with a year-to-date increase of 48.8%.” Comparatively, it said that “at the end of Q1, BEV registrations had been up by 101.9%.”

When it came to a longer term outlook, Saxo Bank’s Garnry cautioned there would be bumps in the road.

“If you look from mid-2008 to late 2020, that was a 12 year long bull market for intangible driven industries — so software, health care, media and entertainment, etcetera.”

“Since the vaccines were announced in November 2020, we have seen the tangible world come back,” Garnry said. This included car manufacturers and commodity companies.  

“They sit in the physical world … and we think the next eight years will … mean a lot of positive tailwind[s] for these tangible companies,” he added.

Medium to long term, this would be a positive for carmakers, “but there will be a pretty, pretty nasty adjustment period going ahead for this industry, unfortunately,” he added.

We’ll have to burn additional coal in the short term, CFO of RWE says

An excavator photographed at a lignite mine operated by RWE on April 8, 2022. RWE says it wants to be carbon neutral by 2040.

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The chief financial officer of German energy firm RWE told CNBC Thursday that it will burn more coal in the short term — but insists its plans to be carbon neutral in the future remain in place.

Michael Muller’s comments come as European countries scramble to shore up energy supplies, as the war in Ukraine continues.

Russia was the biggest supplier of both petroleum oils and natural gas to the EU last year, according to Eurostat. It has significantly reduced flows of natural gas to Europe after Western nations imposed sanctions on the Kremlin as a result of its unprovoked invasion of Ukraine.

Germany — Europe’s largest economy — has decided to recommission some of its coal-fired power plants in order to compensate for its lack of Russian gas.

“RWE is actively supporting the German government, or European governments, in managing the energy crisis,” Muller told CNBC’s Joumanna Bercetche. “So we’re also bringing back additional coal capacity to manage that situation.”

This plan will involve three of RWE’s lignite-fired power stations being brought back to the grid from the start of October.

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RWE says lignite, also known as brown coal and considered particularly bad for the environment, “remains a reliable partner to this day.” It adds that RWE Power — which focuses on lignite and nuclear power generation — extracts millions of metric tons of coal each year.

All of the above represents a hurdle for the Essen-headquartered business, which has said it wants to be carbon-neutral by the year 2040.

A fossil fuel, coal has a substantial effect on the environment and Greenpeace has described it as “the dirtiest, most polluting way of producing energy.” Coal combustion produces a slew of potentially dangerous emissions, including carbon dioxide, sulfur dioxide, particulates and nitrogen oxides.

“What is currently happening is … hopefully a short term issue where we need to find the security of supply,” RWE’s Müller said.

“And that’s why, just from a corporate citizen’s perspective, we feel it is our duty to support the German government in bringing back capacity in the short term — but to be very clear, it doesn’t change our strategy,” he added.

“So while [in the] short term we have to burn additional coal, it needs to be clear that there needs to be an acceleration of building out renewables so that we still meet … targets in the medium and long-term.”

On Thursday, RWE reported earnings for the first half of 2022, with adjusted net income coming in at 1.6 billion euros (around $1.66 billion), compared to 870 million euros in the first half of 2021.

The company said it had invested approximately 2 billion euros in expanding its green portfolio in the first half of 2022. “Total investments will come to more than 5 billion [euros] by the end of 2022,” it added.

Electricity generation from renewables was around 20% higher in this period compared to the first half of 2021, it said, citing improved wind conditions and increased capacity.

Shell to build ‘Europe’s largest renewable hydrogen plant’

On Wednesday, Shell said the Holland Hydrogen I facility would be “Europe’s largest renewable hydrogen plant” when operations start in 2025. Shell is one of several big firms looking to lay down a marker in the sector.

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Plans to build a major hydrogen plant in the Netherlands will go ahead following a final investment decision by subsidiaries of oil and gas giant Shell.

In an announcement Wednesday, Shell said the Holland Hydrogen I facility would be “Europe’s largest renewable hydrogen plant” when operations start in 2025.

According to Shell, the 200 megawatt electrolyzer will be located in the Port of Rotterdam, Europe’s largest seaport, generating as much as 60,000 kilograms of renewable hydrogen every day.

Hydrogen has a diverse range of applications and can be deployed in a wide range of industries. It can be produced in a number of ways. One method includes using electrolysis, with an electric current splitting water into oxygen and hydrogen.

If the electricity used in this process comes from a renewable source such as wind or solar then some call it “green” or “renewable” hydrogen.

Shell said the electrolyzer in the Netherlands would use renewable power from the Hollandse Kust (noord) offshore wind farm, a 759 MW project set to be operational in 2023. Shell is a part-owner of the wind farm.

The hydrogen generated by the plant will be funneled to the Shell Energy and Chemicals Park Rotterdam using a new hydrogen pipeline called HyTransPort.

The idea is that this renewable hydrogen “will replace some of the grey hydrogen” — which is produced using fossil fuels — used at the site. “This will partially decarbonise the facility’s production of energy products like petrol and diesel and jet fuel,” Shell said.

In a statement, Anna Mascolo, who is executive vice president for emerging energy solutions at Shell, said renewable hydrogen would, “play a pivotal role in the energy system of the future and this project is an important step in helping hydrogen fulfil that potential.”

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UN chief slams new fossil fuel funding

In remarks delivered to the Austrian World Summit in Vienna via video, Antonio Guterres issued a sobering assessment of the planet’s prospects. “Most national climate pledges are simply not good enough,” he said.

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The U.N. Secretary General has slammed new funding for fossil fuel exploration, describing it as “delusional” and calling for an abandonment of fossil fuel finance.

In remarks delivered via video to the Austrian World Summit in Vienna, Antonio Guterres issued a sobering assessment of the planet’s prospects.

“The energy crisis exacerbated by the war in Ukraine has seen a perilous doubling down on fossil fuels by the major economies,” he said on Tuesday.

“The war has reinforced an abject lesson: our energy mix is broken,” Guterres said. “Had we invested massively in renewable energy in the past, we should not be so dramatically at the mercy of the instability of fossil fuel markets now.”

Concerns related to both the energy transition and energy security have been thrown into sharp relief by Russia’s invasion of Ukraine, with the price of both oil and gas continuing to surge in recent months.

Russia is a significant supplier of both, and a number of major economies have formulated plans to reduce their reliance on its hydrocarbons in recent months. This desire to move away from Russian imports has led to some challenging situations.  

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In May, the European Commission fleshed out details of a plan to ramp up the EU’s renewable energy capacity and reduce its reliance on Russian fossil fuels. It simultaneously acknowledged that existing coal facilities may have to be used for “longer than initially expected.”

Coal has a substantial effect on the environment and the U.S. Energy Information Administration lists a range of emissions from its combustion. These include carbon dioxide, sulfur dioxide, particulates and nitrogen oxides.

Elsewhere, Greenpeace has described coal as “the dirtiest, most polluting way of producing energy.”

In his speech to the summit in Vienna, the U.N.’s Guterres highlighted the “crippling prices” currently being experienced by businesses and households. “Our world faces climate chaos,” he added.

“New funding for fossil fuel exploration and production infrastructure is delusional,” he said. “It will only further feed the scourge of war, pollution and climate catastrophe.”

The former prime minister of Portugal also called on “all financial actors to abandon fossil fuel finance” and invest in renewables instead.

“The only true path to energy security, stable power prices, prosperity and a livable planet lies in abandoning polluting fossil fuels — especially coal — and accelerating the renewables-based energy transition,” he said.

Renewable energy sources, Guterres argued, were “the peace plan of the 21st century.” He outlined a strategy that would, he claimed, “jumpstart the renewable energy transition.”

This included a tripling of investments in renewables, moving energy subsidies away from fossil fuels to renewables, and fast-tracking approvals for wind and solar projects.

‘Not good enough’

On the planet’s future, Guterres delivered an urgent rallying call.

“The window to prevent the worst impacts of the climate crisis is closing fast,” he said. “Our planet has already warmed by as much as 1.2 degrees.”

“To keep the 1.5-degree goal within reach,” he said, “we must reduce emissions by 45% by 2030 and reach net zero emissions by mid-century. But current national commitments will lead to an increase by almost 14% this decade.”

How the fossil fuel industry is pushing plastics on the world

We’re in the midst of an energy transition. Renewable power and electric vehicles are getting cheaper, the grid is getting greener, and oil and gas companies are getting nervous.

That’s why the fossil fuel giants are looking towards petrochemicals, and plastics in particular, as their next major growth market.

“Plastics is the Plan B for the fossil fuel industry,” said Judith Enck, Founder and President of the nonprofit advocacy group Beyond Plastics.

Plastics, which are made from fossil fuels, are set to drive nearly half of oil demand growth by midcentury, according to the International Energy Agency. That outpaces even hard-to-decarbonize sectors like aviation and shipping.

“Every company who is currently engaged in producing plastic, if you look at their capital budgets for the next two to three years, they’re all talking about expansion plans,” said Ramesh Ramachandran, CEO of No Plastic Waste, an initiative from the Mindaroo Foundation that’s working to create a market-based approach to a circular plastics economy.

Yet much of the developed world is already awash in plastics. So fossil fuel and petrochemical companies are relying on emerging economies in Asia and Africa to drive growth.

Plastic floods the developing world

Alan Gelder of Wood Mackenzie forecasts that every year through 2050, there will be 10 million metric tons of growth in the market for petrochemicals, which are used to make plastics and other products. He says much of that will be shipped overseas.

“We’re not expecting demand growth in the U.S., but it could be where the places where facilities get built to satisfy global demand growth.”

A sanitary worker deals with an influx of plastic bottles at a recycling center in Serbia

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Alongside Middle Eastern oil giants like Qatar, Saudi Arabia and the UAE, the United States is a leading producer and exporter of plastic feedstocks and polymers. Asia in general, and China specifically, are the largest importers of these plastic building blocks.

But Enck doubts consumers actually want more plastic “So what is driving this, is just this glut of fracked gas and the fossil fuel industry teaming up with the chemical industry to just crank out more and more plastic.”

Indeed, an Ipsos survey of over 19,000 adults found that 71% of consumers worldwide want to ban single-use plastics.

As unpopular as they may be today, however, plastics became ubiquitous for a reason.

“Petrochemicals are fantastically good at what they do in terms of lightweight flexibility, durability, versatility,” Gelder said. And thanks in part to fossil fuel subsidies, they’re also generally the cheapest option available.

The problem is that most plastic ends up languishing in landfills, or as litter on the land or sea. Only 9% of all plastic ever made has been recycled, because generally, making virgin plastic is the cheapest option.

China used to profitably recycle much of the world’s plastic, but stopped accepting plastic waste imports in 2018, since much of it was too contaminated to be repurposed. So now, that waste is being diverted to poorer nations that don’t have the infrastructure to process or recycle it. 

Africa saw a fourfold increase in plastic waste imports in 2019, the year after China closed its doors. Plastic also flooded into India, Malaysia, Thailand, Indonesia, and Vietnam, which have since implemented their own import restrictions. But the U.S. is still sending its waste there anyway.

Harmful effects

Signs protesting the construction of a Formosa Plastics petrochemical facility in St. James Parish, Louisiana

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“I found out it was the plants that was poisoning us, making us sick and with cancer, mostly cancer,” Lavigne said. “And then I found out that when they come in here, they don’t hire anybody from Saint James.”

In 2018 she founded Rise St. James, with the goal of stopping the petrochemical expansion. The organization successfully halted construction of a $1.25 billion plastics plant by Wanhua Chemical, and is currently fighting to prevent Formosa Plastics from building a plant in the 5th district, where Lavigne lives. However, it looks like that project will proceed. 

The 5th district is 91% Black.

“One time they wanted to build a plant in the white district and a parish council voted it down. They said no,” Lavigne said. But when similar plants were proposed in the 5th district, she said they were approved.

Overall, climate-focused think tank Carbon Tracker estimates that the externalities of plastics production are between $800 to $1,400 per metric ton of plastic produced, a cost that includes CO2 emissions, air pollution, waste management, and ocean cleanup efforts.

An uncertain future

Yet even as producers prepare for growth, there are many signs that plastics alone cannot save the fossil fuel industry.

For one, the EU Directive on Single-Use Plastics recently took effect in Europe, and it intends to greatly reduce the amount of virgin plastic produced.

It mandates that, by 2025, all beverage bottles made of PET plastic must contain at least 25% recycled content, bans a wide variety of single-use products, and implements an extended producer responsibility scheme that makes plastics producers cover the cost of waste management and cleanup.

Ramachandran expects that this will lead to worldwide changes in the way plastic packaging is made.

“I think within a year, maximum two, in Europe, you’re surely going to see mandatory recycled content in all packaging. And once that happens, it’s going to be like the California mileage standards. It’s very unlikely people are going to have one package for Europe and another package for other parts of the world. So I think it would surely accelerate and spread everywhere else.”

Maine and Oregon also recently introduced EPR laws that make plastics producers pay for recycling programs, and other states, including California and New York, want to follow suit.

Corporations too are showing signs of change. Ahead of the UN Environment Assembly conference, more than 70 companies called for a global pact to cut plastics production and decouple it from fossil fuels. Signatories included AMCOR, one of the world’s largest plastic packaging manufacturers, and major brands like Unilever, Walmart, Pepsi and Coke.

“I don’t expect ExxonMobil or Dow DuPont to change. I do expect the big brands that are buying all of this plastic packaging to change fast,” Enck said.

Finally, plastics are simply a much smaller market segment than oil and gas. Petrochemicals comprised just 13% of ExxonMobil’s revenue in 2020, and 6.5% of Shell’s 2020 revenue.

“So if you say, all of a sudden we stop driving gasoline-fueled passenger cars and we try and divert all of that material to petrochemicals, then you just arguably swamp the petrochemical market and reduce its attractiveness and profitability,” Gelder explained.

Basically, the plastics industry is too small to keeping oil and gas companies afloat, even if demand does continue to grow.

So while plastics benefit from the immense power of the fossil fuel lobby, the scale of the petrochemical industry, combined with legislative and corporate efforts to curb new plastic production, means that the oil and gas industry’s bet on plastics might not pan out they way they hope.

Watch the video to learn more.