Wood Mackenzie, a consultancy firm, forecasts that global plastic demand could be reduced by 30% in a scenario where the world reaches net zero by 2050.
In a new report called ‘Chemicals demand in a 1.5 C scenario’, WoodMac explores three potential outcomes for the energy and resources sector, looking at the base case, pledges announced in the run up to COP28, and a net zero 2050 scenario.
In the base case scenario, the analytics firm estimates that total plastic demand (virgin and recycled) will grow to around 880 million tonnes by 2050, driven by single use packaging and consumer products.
In the accelerated energy transition 1.5 C scenario, total plastic demand would show a 30% reduction in comparison with the base case. Virgin production alone would decrease by 35%.
Europe would see the largest virgin plastic demand slash at about 65%. North America would follow with around 40% decline, China with 30%, Latin America with around 25%, Asia (excluding China) with around 20%, and the Middle East and Africa with around 10%.
Packaging and consumer product sectors would be impacted the most with a demand loss of 40% and 30% respectively in the 1.5 C scenario. Construction, textiles, and industrial materials would also see demand significantly affected.
Recycling
Recycled plastics would make up 18% of the total 620 million tonnes of plastic demand in a 1.5 C scenario, in comparison with 11% in the base case. Recycling is forecast to reduce 270 million tonnes of virgin demand by 2050 compared to the base case.
Development of waste management and sorting infrastructure will be essential to address feedstock availability issues. WoodMac expects chemical recycling will be accelerated to manage hard to recycle applications.
Elimination mechanisms supported by legislation such as the EU’s Packaging and Packaging Waste Regulation (PPWR) directive, would see the ban of certain plastic products like single use plastics, packaging and take away containers.
Substitution mechanisms would see the use of plastics shift to other circular and sustainable alternatives, while reuse and refill products would reduce the consumption of single use materials, impacting total demand.
Polyethylene and polypropylene
WoodMac expects polyethylene demand to grow to 220 million tonnes by 2050 in its base case, while polypropylene is expected to grow to 170 million tonnes.
In an accelerated energy transition scenario, global polyolefins demand reduction is forecast to reach 166 million tonnes by 2050, whereas recycling is expected to reduce virgin polyethylene demand by around 30 million tonnes by 2050 in the base case.
Ethylene production is projected to grow at around 50%, surpassing 300 million tonnes by 2050 to meet demand growth. However, under the 1.5 C scenario, WoodMac anticipates a 35% decline in ethylene production as aligned with demand by 2050.
“In an accelerated scenario, higher production loss attributed to demand loss, along with tighter emission targets and credits impacting margins and profitability for chemical assets, will be forcing producers to choose more profitable and less carbon intensive options,” the report concludes.