The house
that plastic
built

Plastic is an industry made of other industries. Public subsidies help hold it all up.

Global Reporting Centre NBC News

Part II of an ongoing reporting partnership between NBC News and the Global Reporting Centre on global supply chains. Read Part I here.

We live in a world flooded with cheap subsidized plastic. It’s given us hygienic medical supplies, safer transportation, and better food preservation.

Despite the benefits of what was dubbed the “miracle material” for decades, the drawbacks have been stacking up. A 2017 study estimates only nine percent of our plastic waste has been recycled. Other studies found plastic in our rainfall and even threaded through our rocks. If the plastic industry was a country it would be among the top greenhouse gas emitters in the world. Then there’s the opportunity cost — what’s spent supporting the plastic industry instead of other public projects.

Even with 170 countries having agreed to “significantly reduce” single-use plastics, there is no indication that the industry plans to slow down.

Instead, companies and governments around the world are racing to build more capacity to produce, process, transport, and store plastic and the raw materials, such as ethane and propane, needed to make it.

How did we get here? How might things change? To answer these questions we need to start at the beginning, back when synthetic plastic was but a twinkle in the eye of a wealthy billiards enthusiast.

Part 1 About Plastic

What is plastic?

First let’s make sure we’re talking about the same thing. When we think about plastic, we might think of soda bottles or grocery bags. But plastics are also used in aircraft, tea bags, musical instruments, clothing, and medical masks. They’re in almost everything.

So we know what plastic is used for, but what is it? It’s a broad category of things that can be shaped with heat and pressure.

In other words, plastic is:

Plastics are polymers, which are molecules made up of many parts joined into a chain.

And like fossil fuels, plastic polymers are made of hydrocarbons, meaning a mix of hydrogen and carbon atoms.

A thousand purposes

We drank (probably theatrically) in great halls out of moulded animal horn. We made gramophone records out of shellac, or lac bug resin, and billiard balls from ivory. Jurassic Park could have never opened without amber.

An eight of hearts card with billiard balls on the front
Early plastic billiard balls sometimes exploded on contact.

These materials could be expensive and hard to come by. In 1863, that scarcity prompted a famous billiards player to help launch a $10,000 contest to find a replacement for ivory in billiard balls, which led to one of the first human-made plastics.

Synthetic plastics really took off when we started making them out of fossil fuels. These plastics didn’t have the same problems as materials like metal or silk — combs didn’t rust, clothes lasted longer. Using fossil fuels to produce plastic also ensured that scarcity wouldn’t be an issue: the supply of plastic, along with its uses, was seemingly limitless.

Bakelite, considered the first fully synthetic plastic, caused a stir after it was introduced in 1907.

“Bakelite.” Superficially, it is a composition, born of fire and mystery, having the rigor and brilliance of glass, the lustre of amber from the Isles. TIME Magazine

Dubbed a “material of a thousand purposes” by TIME Magazine, Bakelite, and the many synthetic plastics that soon followed, also solved a problem within the fossil fuel industry: what to do with the byproducts of processing gasses like ethane, that would otherwise be burned off? Mix it with a few chemical additives and turn it into plastic.

Following the success of Bakelite, many new synthetic plastics were developed.

This timeline shows when various types of plastics were either first patented or introduced to the market.

Three cards fanned out, one showing soda bottles, another oil drilling equipment, and another a plastic straw.

A consumer utopia

During World War II, U.S. plastic production nearly quadrupled. It was used in everything from tires to radar cables to parachutes, and in the production of the nation’s first atomic bomb, serving as critically important uranium-resistant gaskets and valves.

A soldier inflating a tank.
An inflated fake tank next to a real one.

Plastic was also used during World War II for deception. The U.S. 23rd Headquarters Special Troops, also known as the Ghost Army, deployed inflatable tanks to make the Allied presence look larger from a distance. Photo credit: The National Archives #100310462 and #100310448.

When the war ended, the infrastructure to crank out plastic was still in place. Plastic producers turned their attention to the consumer market, and their timing couldn’t have been better: an expanding suburbia and booming middle class in the U.S. and Canada meant more money to spend and bigger houses to put things in.

It might seem silly now, but plastic was once “considered the very height of glamor.” This is no better epitomized than by Monsanto’s House of the Future, an all-plastic, spacecraft-style home unveiled at Disneyland in 1957.

An illustration of a futuristic, flying saucer-shaped house.
Monsanto's House of the Future.

The same properties that made plastics desirable presented a new problem: they were too durable. After the exhibit closed, demolition crews took a wrecking ball to the House of the Future. Legend has it, the ball bounced off.

To keep growing, plastic needed to be disposable. Speaking at a 1956 industry conference, Lloyd Stouffer, editor of Modern Packaging Magazine, famously told plastics manufacturers that “the future of plastics is in the trash can.” In 1963 Stouffer followed up by writing:

The happy day has arrived when nobody any longer considers the plastics[s] package too good to throw away. Lloyd Stouffer

In living rooms across suburbia, Tupperware Home Parties had women selling the power of plastics — avocado and coral-colored food containers that could be thrown across the room without breaking and still keep your leftovers fresh. These parties also gave many women entry into the workforce during the ’50s and ’60s, and were the only place to get one of these polyethylene containers.

For more on the history of plastic, check out Susan Freinkel's book, excerpted here.

Plastic from oil and gas

Alongside ballooning plastic production was growing production of U.S. oil and gas, which meant even more feedstock for plastics.

How do we get polyethylene, one of the most common plastics, from natural gas?

  1. Natural gas is extracted from the earth. (Plastic is made from fossil fuels in many forms, be it coal, crude oil, or naphtha.)
  2. The compounds that make up oil and gas are separated. One of those compounds is ethane, a hydrocarbon made of two parts carbon and six parts hydrogen, or C2H6.
  3. The ethane, essentially a waste product, is then broken down further (or “cracked”) with extreme heat to produce ethylene, or C2H4.
  4. Many ethylenes, which are monomers, are then combined into polyethylene, a polymer.
  5. Those polymers are turned into little pellets – the building blocks of plastics.

How much plastic is produced globally?

The International Energy Agency (IEA) estimates that in 2020 we produced 12.6 tons of plastic per second.

Global plastic production by type, 2020

IEA projections of global plastic production in 2020, by type of plastic. Measured in percent based on total production of 398.45 million metric tons. Source: Production of key thermoplastics, 1980-2050, IEA, Paris, with additional information from Statista.

EU* plastic demand by end-use market, 2019

Plastics Europe estimates for plastic demand by end-use market in the European Union (+ Norway & Switzerland), measured in percent. This data is one of the few available single-source multi-national datasets. Source: Plastics - The Facts 2020, page 24.

A two of hearts with an N95 mask on the front
Masks, gloves, gowns, syringes. Many medical supplies are plastic.
A two of hearts with a glock pistol on the front
The first firearm made with plastic was developed by curtain-rod manufacturer Gaston Glock.

There are far more plastics than what we list here. But polyethylene and polypropylene are the most common, the most thrown away, and the kind of plastic the world is about to make a lot more of.

Why not recycle it?

Plastic waste is so pervasive that some experts estimate we each ingest and inhale tens of thousands of tiny plastic particles per year.

But single-use plastic has become so ubiquitous and convenient, going without it is hard to imagine.

So, why not recycle it?

One of the first big pushes against the waste problem in the U.S. came in 1953 from Keep America Beautiful (KAB), a non-profit founded by the American Can Company and the Owens-Illinois Glass Company.

This group’s very name and anti-littering messaging emphasized individual, rather than corporate, responsibility.

A five of spades with recycling bins on the front
The now iconic international symbol for recycling was designed in 1970.

In the 1970s, Keep America Beautiful founded the National Center for Resource Recovery. According to Bradford Plumer for Mother Jones, the Center “lobbied state and national legislators to favor recycling as the means to address concerns about rising tides of garbage.”

According to recent government data, plastic waste recycling rates in the U.S. and Canada are around nine percent. China’s is at 17.6 percent and the EU’s is 30 percent. In 2018 the estimated global rate was 14 to 18 percent.

Why does the recycling rate remain so low? According to an OECD report, a key factor is how small and volatile the recycled market is compared to the market for new plastics.

The report states “the price of recycled plastics is largely driven by the price of virgin plastics, which in turn is driven by oil prices.” And there is currently no significant separate market for recycled plastics. In other words, the recycled plastics market, which is relatively small, has to compete with the much larger market for new plastics.

Recycling is complicated. Materials need to be collected, shipped, sorted, have contaminants removed, and be broken down, all while adhering to environmental and regulatory requirements. And the end product needs a buyer who is able to turn that material into something else.

An animated garbage truck picking up garbage and recycling

Plastic that’s not recycled gets landfilled, incinerated, or exported — mostly to be landfilled or incinerated elsewhere.

China and Hong Kong used to be the largest importers of plastic waste before China restricted imports in 2018. The same OECD report notes this concentration of the market in a few key markets also contributes to its volatility. Between 2016 and 2019, the total global trade in scrap plastic decreased by 42 percent.

Key exporters of scrap plastic, 2016 - 2019

Value of scrap plastic exports measured in millions of dollars. Chart includes the top five exporters in 2016. Source: The Observatory of Economic Complexity (OEC).

Key importers of scrap plastic, 2016 - 2019

Value of scrap plastic imports measured in millions of dollars. Chart includes the top four importers in 2016, plus Malaysia — the top importer in 2019. Source: The OEC.

Recycling is part of the solution to plastic waste. But production of new plastic each year is outpacing gains in recycling rates. So the total volume of plastic waste is still increasing. Experts say what we need to do is stop making so much new plastic. We’re on track to do the opposite.

Part 2 Subsidies

What’s a subsidy?

A subsidy is a benefit given by the government for a public good — like funding development of a vaccine that is then sold nearer to cost rather than for huge profit.

Part of the reason we have so much plastic is because we subsidize it, directly and indirectly, every step of the way.

This creates a sort of circular logic. Cheap, abundant, subsidized oil and gas means cheap plastic. Cheap products can increase demand. Increased demand justifies more plastic production, which in turn justifies more oil and gas.

This is a simplistic way to describe a complicated industry, but the key is that subsidies can be the deciding factor when considering one decision (producing and using plastic) over another.

A jack of diamonds with money on the front
In 1988, Australia was the first to introduce plastic banknotes.

Subsidies might be used to:

By subsidizing plastic, the “public good” is cheap plastic and all the economic activity associated with it.

Subsidized feedstock

A queen of spades with a factory on the front
Emissions from plastic production could soon exceed emissions from coal-fired plants.

Subsidies to plastic start with the feedstock: fossil fuels. According to a 2021 IMF Working Paper, global subsidies to fossil fuels in 2020 amounted to nearly $6 trillion. Of those costs approximately 90 percent are ‘implicit’ — for example, the predicted costs of air pollution and the impacts of climate change (like crop damage). These subsidies help keep oil and gas flowing.

At the other end, an International Energy Agency report predicts demand for oil and gas will flatten by the 2030s, and that new growth “increasingly depends on its rising use as a feedstock in the petrochemical sector.”

Hydraulic fracturing, or fracking — a controversial way to extract hard-to-access gas from shale (rock) — is a key contributor to global oversupply.

“The U.S. is the primary country that has done fracking at scale. In the Appalachian area, you can really only frack the gas,” said Kathy Hipple, a senior researcher at the Ohio River Valley Institute and finance professor at Bard College. “They can produce a lot of gas, they just can’t make it a profitable venture.”

From 2012 to 2017, the 30 biggest shale producers lost more than $50 billion. Subsidies help them keep fracking anyway.

These subsidies are not usually hard cash, but instead serve to lower the bill by reducing costly “barriers” like zoning, taxation, and environmental regulations.

Since fracked gas can be used to produce plastic, the plastic supply chain has become the industry’s solution to so much cheap gas. In an interview with Yale E360, Steven Feit, a lawyer for the IEEFA, put it succinctly: “think of plastics as a kind of subsidy for fracking.”

A large industrial facility being built on the banks of a river, with many red construction cranes in the sky, all surrounded by greenery.

Shell’s ethane cracker, the Pennsylvania Petrochemicals Complex, is currently under construction in Beaver County, PA. It's set to open in 2022 and produce 1.6 million metric tons of virgin plastics pellets a year. See Part I for more. (Photo: Hannah Rappleye / NBC News)

Producing, transporting, and disposing of plastic is also subsidized:

Demand for supply

The plastic industry predicts demand for new plastic will increase. Some trends suggest otherwise. One hundred and seventy countries have pledged to “significantly reduce” plastic use by 2030 — China, France, India, and Kenya are among those that have already implemented bans or restrictions on certain single-use plastics. Advocacy groups are pushing to prevent microplastics from entering our waterways. Increases in the cost of plastic waste exports have, in some cases, led to better local recycling.

But the industry is pushing back. The global response to the COVID-19 pandemic increased demand for single-use products like masks, syringes, and other vital supplies, though we don’t know if that demand will persist.

Even if the industry’s optimistic projections come to pass, the additional production capacity slated to come online in the next few years is expected to exceed demand.

Much of the plastic that comes into the lives of individual consumers has been unsolicited, unexpected, and generally unwelcome. It goes out again as quickly as it came in. — Carroll Muffett, President & CEO of the Center for International Environmental Law

So, when we talk about demand for plastic, whose demand are we talking about?

Part 3 What to do?

Global effort

For all the problems with plastics, in many applications they’re irreplaceable, or the best option when considering all of a product’s impacts, from when it’s made to when it’s disposed of.

So, what can be done? Produce less of it in the first place, particularly single-use. And for the plastic we do need to use: reuse it.

There are a number of barriers that make recycling harder, and sometimes more expensive, than producing new plastic. But according to reports from the OECD, S&P Global Platts, and Environment and Climate Change Canada (ECCC), recycling can be made more viable through:

An ace of spades with a monobloc plastic chair on the front
Monoblocs. Just about the best chairs three dollars can buy.

Without these sorts of measures implemented on a global scale, recycling rates are unlikely to increase.

And banning low-value plastic waste exports to one country doesn’t mean much if it can be routed to another. Same with banning single-use products domestically while subsidizing their production for export (as Canada does), or banning fracking at home while importing fracked gas from abroad (as the U.K. does).

Experts say changes need to start with high-income countries, those most responsible for plastic waste, yet least impacted by the consequences.

And some cross-border changes are happening: this year, more than 130 countries approved a global minimum corporate tax, and 45 have some form of carbon pricing. As of January 2021, import and export of plastic waste is regulated among 187 countries as part of the Basel Convention — with the United States as a notable holdout.

Yet it’s the countries with the greatest ability to make an impact that often push back. Documents leaked to Greenpeace ahead of the COP26 climate summit allegedly show governments and lobbyists were already working to downplay findings and recommendations of the latest UN IPCC climate reports.

This type of lobbying is something the plastics industry is no stranger to: As we’ve seen throughout history, like with Keep America Beautiful and the involvement in the recycling movement, the industry has been able to adapt and grow, while also influencing and changing public perception. That is because it is made up of giants — fossil fuel, petrochemical, and packaging companies, all leaning on one another. But it’s public subsidies that help keep the house of cards standing.

The power to change, to curb the growth of cheap subsidized plastic, rests in the hands of governments, companies, and policymakers. It’s on them to start pulling out some cards.