As the world strives to wean itself off fossil fuels, oil companies have been turning to plastic as the key to their future. Now even that’s looking overly optimistic.
The global crackdown on plastic trash threatens to take a big chunk out of demand growth just as oil companies like Saudi Aramcosink billionsinto plastic and chemicals assets. Royal Dutch Shell Plc, BP Plc, Total SA and Exxon Mobil Corp. are all ramping up investments in the sector.
Renewed emphasis onrecyclingand the spread of local bans on some kinds of plastic products could cut petrochemical demand growth to one-third of its historical pace, to about 1.5% a year, said Paul Bjacek, a principal director at consulting firm Accenture Plc.
“Oil companies are saying, no problem, we’ll invest in petrochemicals,” Bjacek said. “But petrochemicals, after the circular economy happens to the maximum extent, is likely to be a low-growth market.”