Global polymer producers and banks “true culprits” in plastic waste crisis, claims Minderoo report
18 May 2021 --- New analysis released today has revealed just 20 companies – supported by a small group of financial backers – are responsible for producing over 50 percent of the single-use plastic ending up as waste worldwide.
Published by the Minderoo Foundation, the “Plastic Waste-Makers Index” is reportedly the first time the financial and material flows of single-use plastic production have been mapped globally and traced back to their source.
The index was developed with partners including Wood Mackenzie and experts from the London School of Economics and Stockholm Environment Institute.
“Our report does not try to enumerate the level of responsibility of the single-use plastics problem. We highlight clearly in the report that this responsibility is shared,” Laurent Kimnan, report co-author at Minderoo, tells PackagingInsights.
“However, the limelight until now has been on the FMCG brands, and our research is the overdue focus on upstream petrochemical companies that produce the plastic polymers.”
“That said, it’s a ‘chicken and egg’ problem – today, virtually all plastics are derived from fossil fuels, so brands are only able to meet their demand by the supply of plastics derived from fossil fuels.”
The blame game
Minderoo says environmental campaigners have previously placed the blame for plastic waste at the feet of packaged goods brands such as Coca-Cola and PepsiCo.
However, the report identifies a small group of petrochemical companies that manufacture polymers – the building block of plastics – as the source of the crisis.
According to Minderoo, 20 global banks have pumped US$30 billion into the sector since 2011.
ExxonMobil is identified as the biggest fossil-based polymer producer, contributing 5.9 million tons to global plastic waste, closely followed by US chemicals company Dow and China’s Sinopec.
The analysis suggests 100 companies are behind 90 percent of global single-use plastic production.
“Consumers can all take steps to reduce their unnecessary use of single-use plastics, but they do not have much choice to buy recycled plastic products so cannot be blamed entirely for the problem,” says Kimnan.
“Governments certainly have responsibility, and we make such recommendations in the report. Given that just 20 petrochemical companies account for over 50 percent of single-use plastics generated, they can act as a huge leverage point for policy intervention.”
Global bank funding
According to the analysis, close to 60 percent of the commercial finance funding single-use production comes from just 20 global banks, while a total of US$30 billion of loans from these institutions – including Barclays, HSBC and Bank of America – has gone to the sector since 2011.
The report also highlights 20 asset managers – led by US companies Vanguard Group, BlackRock and Capital Group – hold over US$300 billion worth of shares in the parent companies of single-use plastic polymer producers. Of this, US$10 billion is directly linked to single-use polymer production.
“Tracing the root causes of the plastic waste crisis empowers us to help solve it,” says Al Gore, former US vice president. “The trajectories of the climate crisis and the plastic waste crisis are strikingly similar and increasingly intertwined.”
“As awareness of the toll of plastic pollution has grown, the petrochemical industry has told us it’s our own fault and has directed attention toward behavior change from end-users of these products, rather than addressing the problem at its source.”
Top 20 single-use plastic polymer producers: The Plastic Waste-Makers Index (Copyright: Minderoo Foundation).
American Chemistry Council responds
The American Chemistry Council (ACC) has responded to the Minderoo report, claiming it is “misleading” for failing to recognize “plastics’ key role in lowering greenhouse gas emissions.”
“Today’s report from Minderoo misconstrues the relationship between plastics and our carbon footprint,” stresses Joshua Baca, ACC’s vice president of plastics.
“Some of the most comprehensive studies to date have found that replacing plastics with other materials would drive up waste and carbon impacts.”
“A renowned analysis by the environmental firm Trucost found replacing plastic in consumer packaging and products with common alternatives would increase environmental costs nearly four times.”
“And a separate study found switching from plastic packaging to many alternatives would increase the amount of packaging generated annually in the US by 55 million tons and greenhouse gas emissions by 130 percent.”
The ACC claims Minderoo’s report is “misleading” for failing to recognize “plastics’ key role in lowering greenhouse gas emissions.”
Minderoo calls for transparency
Minderoo is calling on petrochemicals companies to be required to disclose their “plastic waste footprint” and commit to transitioning away from fossil fuels toward circular models of plastic production.
Meanwhile, banks and investors should shift capital, investments and finance away from companies producing new fossil fuel-based virgin plastic production to companies using recycled plastic feedstocks.
“As a leader in policy-making, the EU has set in motion a Single-Use Plastics Directive that includes a minimum 30 percent recycled content by 2030. These sorts of policies targeting the life-cycle of plastics are required and we call on governments to further put in place such life-cycle policies urgently,” says Kimnan.
“The plastification of our oceans and the warming of our planet are amongst the greatest threats humanity and nature have ever confronted,” adds Dr. Andrew Forrest AO, chairman and co-founder at Minderoo.
“This means stop making new plastic and start using recycled plastic waste, re-allocate capital from virgin producers to those using recycled materials, and importantly, redesign plastic so it does no harm and is compostable, so like every other element, it returns to its original molecules, not nano-plastics.”
Scale of inaction as crisis grows
The report also lays bare “the scale of inaction by plastic producers and how they are compounding the existing throwaway plastic waste crisis.”
The analysis projects a 30 percent increase in global throwaway plastic production over the next five years. This production growth will lead to an extra three trillion items of throwaway plastic waste by 2025.
The analysis forecasts a 30% increase in global throwaway plastic production over the next five years.
Moreover, recycled plastic or feedstocks account for no more than 2 percent of global single-use plastic production, meaning 98 percent of these plastics are produced from fuels.
Minderoo suggests plastic producers “score woefully in a best practice assessment of the move to circular based forms of production necessary in addressing the crisis.”
Meanwhile, the global economic downturn caused by the coronavirus pandemic pushed down the oil price, making fossil fuel-based single-use plastics even more financially attractive, Minderoo says.
According to Pew Charitable Trusts and Systemiq’s landmark 2020 report – “Breaking the Plastic Wave” – more than 130 million metric tons of single-use plastic ended up as waste in 2019, almost all of which is burned, buried in landfill, or discarded directly into the environment.
Biggest producers by country
Minderoo’s analysis pinpoints Australia and the US as the biggest contributors to the throwaway plastics crisis. These countries produce more than 50 kg per person per year, followed by South Korea and the UK at more than 40 kg per person.
In comparison, the average person in China – the largest producer of single-use plastic by volume – produces 18 kg of single-use plastic waste per year. In India, that figure is as low as 4 kg per year.
The ACC and Veolia have come out in defense of plastics after the Minderoo report suggested global polymer producers and their financial backers should be held responsible for the global plastic pollution crisis.
By Joshua Poole
