Sept. 4 (UPI) -- A London think tank said Friday the oil industry is investing $400 billion in plastics to help make up for anticipated losses in transportation, against efforts worldwide to mitigate proliferation of plastic waste.
A report by Carbon Tracker and environmental group SystemIQ said oil companies expect growth in plastics will be the largest driver for oil demand by 2040. The report said, however, the fiscal support runs counter to global campaigns for sustainable environmental change.
Major oil companies are expected to make large investments in virgin plastics, for example, as more electric vehicles hit the road and reduce the need for transportation-related oil.
"The oil industry is pinning its hopes on strong plastics demand growth that will not materialize, as the world starts to tackle plastic waste and governments act to hit climate targets," the groups said. "This risks $400 billion worth of stranded petrochemical investments, increasing the likelihood of peak oil demand."
The report said 36% of plastic is presently used only one time and 40% of the plastic produced ends up polluting the environment. Less than 10% of plastics are recycled, it noted.
"The plastics industry is a bloated behemoth, ripe for disruption," the report said. "Plastics impose an externality cost on society of at least $1,000 per ton, or $350 billion a year, from emitting carbon dioxide, associated health costs from noxious gases, collection costs and the alarming growth in ocean pollution."
Carbon Tracker strategist Kingsmill Bond said there's a breakdown between what oil companies need to profit from plastics and global efforts to slow pollution.
"The oil industry has polluted with impunity for 70 years but now they are going to be made to pay, by hook or by crook, for the huge costs that put on society," Bond said. "Remove the plastic pillar holding up the future of the oil industry, and the whole narrative of rising oil demand collapses."
The European Union this summer proposed a tax of $944 per ton for unrecycled plastic waste after China said it would ban single-use plastics in major cities by the end of this year and nationwide by 2022.