How Labubu Dolls Are Blowing Up Hopes Of A Plastic Ban Amid Global Talks

The world's governments are meeting this week to hammer out a treaty to reverse the rising tide of plastics. Oil companies have other ideas.

Far from cutting back their spending, refiners are planning to drown the noble ambitions of United Nations negotiators meeting in Geneva beneath a tsunami of polymers. That freaky-cute Labubu doll you just bought (made largely of polyester and polyvinyl chloride) and the bento meal you got delivered in four separate containers (polypropylene and polyethylene) are evidence that we need to work a lot harder to break our plastics habit.

China is ground zero for this shift. Just last week, Shandong Yulong Petrochemical Co. announced plans to spend $16.4 billion on an expanded facility to produce feedstocks - the basic chemicals, such as ethylene and propylene, from which plastic polymers are made. PetroChina Co. has also signed off on a $9.6 billion plastics plant, Reuters reported last month, without saying where it got the information.

That's part of a massive expansion as the country rushes for self-sufficiency in chemicals it previously imported.

Production of ethylene nearly doubled since 2018, to 35 million metric tons last year. Another 33 million tons, including vast projects under construction by Saudi Basic Industries Corp., Shell Plc, BASF AG, and China Petroleum & Chemical Corp., or Sinopec, will be added by 2030.

The country may already have reached the point where it's using polymers at developed-economy levels. Consumption in 2019 was 76 kilograms (34 pounds) per person, not much less than 82 kg per person in Japan, though still well below 115 kg per person in the European Union.

It has almost certainly risen since. Packaging, which consumes nearly 40% of plastics in China, moves roughly in tandem with the volumes of goods getting shifted around. That sector has exploded in recent years. Since 2022 alone, express delivery numbers have nearly doubled. Despite repeated, vague government promises to crack down on waste, there's little sign of anything sufficient to offset such an extraordinary increase.

That demand picture is worrying, but the supply situation may be worse. It might even be exacerbated by some of the progress the world is making in capping our usage of fossil fuels. The rise of electric vehicles, for instance, will force refiners to produce more naphtha, since it's chemically similar to gasoline, which is starting to suffer from falling demand. Naphtha, in turn, is mostly processed into plastic feedstocks.

The methane that's replacing coal in power generation has a similar side effect, since it typically comes out of the ground mixed with natural gas liquids (NGLs) - a suite of volatile chemicals such as ethane and propane which, again, are crucial building blocks for plastics.

Roughly a third of oil production in the US these days is not crude, but NGLs. Thanks to that wave of new plastics plants under construction in Asia, NGLs are now the biggest US export to China after soybeans and crude. Total exports of ethane are set to increase by about 30% next year relative to 2024's level, according to the US government, due in part to a special exemption from the tariff barriers erected over almost every other component of US-China trade. Jafurah, a massive Saudi Arabian gasfield due to start production within months, is also heavily focused on supplying NGLs.

All that adds up to a world where even the decline of oil and coal are leaving us awash in plastic feedstocks, plus the processing plants to turn them into synthetic bags, boxes, clothes, and household goods. In the face of all this, is there any hope that the officials meeting in Switzerland will be able to rein in our addiction? The prognosis doesn't look great: The last session, held in Busan, South Korea, just weeks after last year's US election, was notable mainly for the fact that its timid official statement failed to mention the ostensible objective of the meeting, an end to plastic pollution.

The current market glut may provide a clue, however. Ethylene production capacity is so excessive that as much as 55 million tons may have to close, according to Wood Mackenzie, an energy consultancy. That will be most acute in Europe, where about 40% of the total is at risk of getting shut down. This potential shock to hydrocarbon supply is an oddly similar situation to 2022, when Russia's invasion of Ukraine forced the EU to cut gas consumption by about 20% in four years.

The EU will be better set up than most to survive the shutdown of its virgin plastics processors, thanks to waste separation and recycling networks that are among the most sophisticated in the world. Still, if local chemical plants start closing, expect plenty more headlines about the decline of European manufacturing in the face of rapacious Chinese competition. Next will come pleas for government money, and tariff protections, to preserve jobs.

It's one thing to make treaty promises to reduce our use of plastics. It's quite another to put those words into action, by cancelling plans to export ethane, mothballing a new petrochemicals plant, or accepting that one of your country's remaining oil refineries will just have to close. As the world responds to its current polymer glut, we're about to find out which side will win.

(Except for the headline, this story has not been edited by NDTV staff and is published from a syndicated feed.)