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Plastics sustainability is one of the biggest potential
disruptors on the policy front and an issue that could lead to
greater regulation (including bans) and/or deselection by
consumers, retailers and brand owners. The issue of plastics waste,
especially ocean pollution, has come to the forefront of topics
guiding decisions for the entire value chain.
The demand for plastics effects upstream petrochemical demand
(olefins, aromatics, ECU) that is critically important to the
petrochemical value chain as well as for integrated oil companies
seeking refuge in petrochemicals from uncertain refining markets.
The petrochemical value chain is global and dynamic with shifting
drivers. Dramatic shifts in crude creates broad based uncertainty
and a pause in making major investment decisions. North America
Shale gas significantly shifted the geographical balance of supply
and trade for many base chemicals and plastics, with a less
pronounced effect on the global market demand. Changes in China
environmental policies, including bans on imported scrap materials,
as well as protectionist trade policies have an immediate and
significant impact on polymer trade patterns.
Plastics sustainability is no less a fundamental driver and is
perhaps one of the least understood from a demand, supply,
regulatory and technology standpoint. It's a challenge that
involves every participant of the value chain - from energy to
consumer and encompassing both the private and public sector.
As trends develop participants through the value chain are
re-assessing their business models and either considering or
already implementing vertical and/or horizontal integration plans.
Examples today included polymer producers adding recycling assets,
brand owners adding processing that includes use of PCR. Plastics
sustainability has the potential to change the total demand and
demand growth rate for virgin plastics and significantly impact the
viability of present assets (plants) and future expansions both in
plastics, upstream chemicals, and feedstocks.
For these reasons, IHS Markit believes it is time to bring its core
competencies to bear with the vision to help stake holders move
progressively to understand the issues of plastics
sustainability.
