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Low oil prices make Coca Cola our friend. Here's why

Low oil prices make Coca Cola our friend. Here's why

In a turn of extreme events, how did the planet plastics trashers become our potential plastics saviours? Donald did it

Maybe Donald didn't do it all, but he is a huge catalyst as he proudly stands as the poster boy for capitalism without community. Well it seems like we're over it - and we have some odd new friends. Tanking oil prices, coronavirus and repealed legislation appeared to be setting up a perfect storm for more plastic rain. And yet, some of the biggest potential rain makers have said NO, as the mood and power is shifting away from self interested political will.

Winding back environmental legislation

During his term in office, Donald Trump, presumably driven by his distaste for energy efficient light bulbs making him look orange, has repelled countless laws and standards around toxic waste management, emissions standards, pollution management. His administration has set limits on environmental assessments, downsized public lands, rescinded the Clean Water act for protection of wetland and streams - and on it goes.

All the while, in something that sounds suspiciously like advice to inject yourself with disinfectant, Trump has consistently declared that he would ensure all Americans had clean air and clean water.

Well that's clearly bullshit. 

How COVID made virgin plastic attractive

COVID and lockdown saw transport and business grind to a halt across the world. And with that, the need for oil and oil products tanked. Crude oil prices went into negative territory in mid April as production face offs saw over-supply soar for a product no one needed anyway. 

MOST VIRGIN PLASTIC IS MADE FROM OIL AND WITH TANKING PRICES, THE COST OF VIRGIN PLASTIC SANK WITH IT. ACCORDING TO RECYCLING MARKETS, THE PRICE OF HDPE AND POLYPROPYLENE DROPPED JUST OVER 40% AND PET DROPPED AROUND 14%.

Why is the price of plastic resin important?  Because virgin plastic was already way cheaper than recycled plastic, even before the pandemic - and it just became way cheaper - cheap like Ford (on sale) VS Ferrari (never on sale) cheap. And with the drop, many small recycled plastics users, already under bottom line pressure with COVID, went back to virgin. 

What happened next

Corporates have turned out to be the life savers as, in the main they stayed the course and didn't bow to price pressures. And it is that decision that has been sustaining the recycled plastics market and it's supply chain. Over the past few years, packaged goods companies have made commitments to increasing levels of recycled plastics in their production - averaging around 25%. And it's this commitment that has sustained the industry. 

The Coca-Cola example

Coca-Cola's many sins are way too big to be counting here, although we've had a few passing swings at health and environmental issues relating to them. Setting aside Coca-Cola's history and market intent for a minute and focusing on plastic, Coca-Cola was already striving for 100 percent recyclability of all its packaging by 2025 and for 100 percent of its packaging that enters the marketplace to reach a recycling system by 2030.

In some countries like Australia, Coca Cola had committed that by 2019, 7 out of 10 of Coca-Cola Amatil's bottles would be produced from 100% recycled plastic. Coca-Cola already has solidified its 10-year sourcing plans for recycled PET (rPET) on each continent, so they presumably won't be letting these plants and relationship lie idle anytime soon.

I ADMIT TO BEING SOMEONE WHO ALWAYS WORRIED ABOUT THE COSY RELATIONSHIP BETWEEN PACKAGERS AND CONSUMABLES AS THE SYMBIOSIS WAS JUST WAY TO DEADLY FOR THE PLANET. BUT IT SEEMS THIS RELATIONSHIP MAY END UP BEING THE SUPPLY CHAIN DISRUPTER WE ALL NEED.

After all is said and done, political leaders can worry about their orange-ness and reciprocating donation funds to big oil, but if there is no demand for the product, as was evidenced during COVID, then no amount of subsidising and law repelling is going to make people buy something they don't want. Bring it on.


Image: Unsplash - Caitlyn Hastings

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