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Big Oil bets on recycling to keep plastics rolling

Illustration of plastic bag coming out of a gas pump
Illustration: Rebecca Zisser/Axios

Two of the world’s biggest oil and gas producers — BP and Shell — are getting into the recycling business as they ramp up operations to make plastics.

Why it matters: Most people associate oil companies with gasoline. But they also generate the building blocks of plastics that are interwoven into our lives. The durable material is littering the planet given lackluster recycling rates.

Driving the news: Over the past month, two notable developments have occurred:

  • Shell announced Thursday what it called a “breakthrough” with hard-to-recycle plastics — like takeout food containers and laundry detergent bottles. The oil producer said it made chemicals using raw material, or feedstock, manufactured from that kind of plastic waste, processed by another company, Atlanta-based Nexus Fuels LLC.
  • BP plans to build a pilot plant to test new technology the company says allows single-use plastics, like plastic bottles, to be recycled over and over again, Reuters reported last month.

The big picture: The oil industry is eyeing growth in petrochemicals — the plastic building blocks — to offset anticipated lower oil demand elsewhere, particularly transportation as electric cars become more common in a world that is increasingly tackling climate change.

One level deeper: Shell also announced a new goal to use 1 million tonnes of plastic waste a year in its global chemical plants over the next five years.

  • That’s about 6%–7% of the entire amount of raw material the company uses each year, according to Thomas Casparie, executive vice president for chemicals at Shell.
    • (One tonne = roughly 1.1 U.S. ton.)

The other side: Environmentalists say oil companies betting on this type of recycling, known as chemical since it changes the chemical makeup of the material, will justify ever-more investments in petrochemical plants and other operations with big impacts on climate change, according to Steven Feit an attorney with the nonprofit Center for International Environmental Law.

Go deeper: Oil companies double down on plastics as public outcry grows