Plastic production accounts for roughly 5% of global carbon dioxide emissions today. And our current moment shows just how embedded oil and gas products are in our lives. It goes far beyond their use for energy.
As I write this, I’m wearing clothes that contain plastic fibers, typing on a plastic keyboard, and looking through the plastic lenses of my glasses. It’s hard to imagine what our world looks like without plastic. And in some ways, moving away from fossil-derived plastic could prove even more complicated than decarbonizing our energy system.
Crude oil prices have been on a roller-coaster in recent weeks, and prices have recently topped $100 a barrel.
Crude oil contains a huge range of hydrocarbons, and it’s typically refined by putting it through a distillation unit that separates the raw material into different fractions according to their boiling point. Those fractions then go on to be further processed into everything from jet fuel to asphalt binder. We’ve already seen the price spikes for some materials pulled out of crude oil, like gasoline and jet fuel.
Let’s zoom in on another component, naphtha. It can be added to gasoline and jet fuel to improve performance. It can also be used as a solvent or as a raw material to make plastics.
The Middle East currently accounts for about 20% of global naphtha production and supplies about 40% of the market in Asia, where prices are already up by 50% over the last month.
We’re starting to see these effects trickle down already. The price of polypropylene (which is made from naphtha and used for food containers, bottle caps, and even automotive parts) is climbing, especially in Asia.
Typically, manufacturers have a bit of stock built up, but that’ll be exhausted soon, likely in the coming weeks. The largest supplier of water bottles in India recently announced that it would raise prices by 11% after its packaging costs went up by over 70%, according to reporting from Reuters. Toys could be more expensive this holiday season as manufacturers grapple with supply chain concerns.