Can the UN broker the first-ever binding plastic pollution agreement?

Good morning, and welcome back to Energy Source, coming to you from New York. 

I recently started covering US energy full time at the Financial Times and will be taking the helm of the newsletter on Thursdays — expect more data-driven bits and charts in this edition. 

Today, we start with President Joe Biden and President Xi Jinping’s highly anticipated talks aimed at defusing tensions between the US and China. Co-operation between the world’s two largest polluters will be crucial in the global effort to tackle climate change — and it has large implications for the fossil fuel sector. 

Hours before the meeting, the US and China agreed to accelerate the rollout of clean energy, backing a COP28 goal to triple global renewable energy capacity by 2030 and lower reliance on fossil fuels. Missing from the statement, however, was a plan to phase out hydrocarbons — a critical point of contention ahead of the climate talks at the end of the month. My colleague Aime Williams has the details on the commitments. 

Before the Dubai’s COP chaos starts in earnest, though, Nairobi this week is hosting important treaty negotiations over global plastic use. The negotiations come as countries and local governments around the world are cracking down on plastic, with New York suing PepsiCo yesterday in a lawsuit that accuses the world’s second-largest food company of environmental damage from plastic pollution.

Also in today’s newsletter, we launch our new section on job moves. Please send news of appointments and departures our way. As always, please reach out with any tips, ideas or suggestions here: amanda.chu@ft.com.

Thank you for reading,

Amanda

Historic UN talks tackle global thirst for plastic

This week’s Nairobi negotiations, attended by 160 countries, have been hailed as a “critical juncture” for global action on plastic pollution.

With demand for the material that has built modern life expected to nearly double by mid-century, government officials, industry groups and climate campaigners aim to leave this week’s UN gathering one step closer to its first binding agreement on plastic pollution.

The world’s hunger for more plastic has big implications for the climate. While plastics are an important component of clean technologies, virtually all plastics are manufactured using chemicals derived from fossil fuels, and the material’s lack of biodegradability poses a threat to human health and wildlife.

“If you’re exposed to the plastics or petrochemicals or fossil fuel spaces . . . you should be paying close attention to these negotiations because what the world is negotiating here is the end of the era of nonstop plastic growth,” said Carroll Muffett, chief executive of the Center for International Environmental Law, speaking to Energy Source from Nairobi. The environmental non-profit found that attendance from fossil fuel and industry lobbyists in this week’s talks is up 36 per cent from the last round of negotiations in May.

Plastics’ share of global emissions is expected to grow significantly. By 2040, the UN estimates that plastics will make up nearly a fifth of greenhouse gas emissions, up from less than 5 per cent today.

For the UN plastic pollution agreement, due at the end of next year, the devil will be in the details when it comes to efficacy.

The debate among countries hinges on whether the treaty should include cuts to plastic production or focus on recycling, with fossil fuel-producing countries and industries pushing for the latter.

Plastics is a large driver of burgeoning demand for petrochemicals. The International Energy Agency cites the petrochemicals sector as the “single largest contributor” to oil demand growth for the next five years.

At least a dozen petrochemical facilities are expected to come online in that time period, a third of which will be located in China, according to S&P Global Commodity Insights. China is the leading producer of plastics, surpassing North America by a slim margin to produce 27.1mn tonnes of polyethylene this year.

“The fact that petrochemical feedstock demand continues to keep growing is what pushes our view of peak oil out into the early 2030s,” said Alan Gelder, vice-president of refining, chemicals, and oil markets at Wood Mackenzie. 

Countries with vested interests in fossil fuels and petrochemicals are pushing against production curbs in the treaty. On Saturday, Saudi Arabia, Russia, China, Iran and a number of other countries formed the Global Coalition for Plastic Sustainability, calling for a bottom-up approach that improves waste management while recognising the merits of plastic.

Stewart Harris, spokesperson for the International Council of Chemical Associations, says that focusing on demand signals is a more “effective way” to address plastic pollution than constraining supply. Harris is calling for the treaty to prioritise “circularity,” the reuse and recycling of plastic that is normally discarded.

“We think that the global agreement has the opportunity to create additional market demand [for recycling] . . . so that our companies can invest further, knowing that there’s going to be that stable demand moving forward,” said Harris, who estimated $17.5bn has been invested in recycling to date (the OECD says we need $1tn by 2040).

Most of the ICCA’s member companies have adopted net zero commitments, and improvements in production have decreased the industry’s carbon footprint, Harris added.

Environmental groups, along with the EU, the African Group and a number of other countries have pushed for a “lifecycle approach” to plastics pollution that considers limiting the volume of production as well as recycling. They argue that unless the production of cheap plastics is curtailed, the finances of recycling waste will not be economical.

“Making plastic, burning plastic: it all puts toxins into our air, water and soil. We know the impacts that this has on human health — increased risk of cancer, asthma, COPD, miscarriage . . . the list goes on,” said Sarah Martik, executive director of the Center for Coalfield Justice who is serving as an environmental justice observer at the talks. “Any effort to distinguish upstream from downstream is illogical and ignores reality.”

Less than 10 per cent of global plastic ends up recycled, according to the OECD, which expects the accumulation of plastics in aquatic environments to nearly double by 2040. 

“All the studies that looked at the solutions that need to be put in place, all show there is no way we can recycle our way out of the problem,” said Winnie Lau, project director at Pew Charitable Trusts, which found in a 2020 report that no single solution offered a credible pathway to a near-zero plastic leakage future. (Amanda Chu)

Job moves

• Ørsted finance chief Daniel Lerup and chief operating officer Richard Hunter are leaving the Danish group with immediate effect, the company said on Tuesday. Rasmus Errboe, chief executive of the European business, will serve as interim finance chief, and Andrew Brown will be interim chief operating officer.

• Global Solar Council appointed Sonia Dunlop as chief executive. Dunlop joins from climate think-tank E3G and will succeed interim chief Gianni Chianetta, who will stay on as senior adviser.

• Maxeon Solar named Donald J Foldenauer as general manager of its billion-dollar manufacturing solar facility in New Mexico, which was announced in August.

More on jobs . . . 

Clean energy investment is driving energy sector job growth in every part of the world, according to a report from the International Energy Agency. The IEA found that global energy employment increased by 3.4mn jobs from pre-pandemic levels in 2022, with positions in clean energy accounting for more than half of the total growth.

Power Points

• UK government to increase offshore wind subsidies by 66%

• The EU has agreed to new restrictions on methane leaks in an effort to crack down on the potent source of global greenhouse gases.

• Denmark could be given the task of blocking Russian oil tankers, according to three people with knowledge of talks in Brussels, as western powers scramble to enforce a price cap on Russian crude.

• Siemens Energy will restructure its wind turbine business after steep losses. The German clean energy company does not expect its wind segment to return to profitability until 2026.

• Opinion: Tackling the climate crisis requires a transformation in financing, argues author Mariana Mazzucato.

---

Energy Source is written and edited by Jamie Smyth, Myles McCormick, Amanda Chu, Tom Wilson and David Sheppard, with support from the FT’s global team of reporters. Reach us at energy.source@ft.com and follow us on X at @FTEnergy. Catch up on past editions of the newsletter here.