Restraining the explosion of plastic pollution, which is projected to double in size globally by 2040, is the next evolution in the discussion about climate. The United Nations recently agreed to reach a global agreement to tackle plastic waste, indicating consensus on a shifting global sentiment away from plastics. The treaty has an ambitious timeline for a globally binding agreement, with finalization planned for late 2024. But what does a potential “Paris Agreement” on plastics mean for water?
Efforts to reduce plastic pollution could impact water quality, generate wastewater effluent treatment opportunities, and alter water spend in the oil & gas, chemicals, and pulp & paper industries. A global agreement to reduce plastic pollution could also offer municipal utilities a new marketing angle in their ongoing feud with the bottled water sector.
Commitments to reducing microplastics and PFAS shine spotlight on water quality. The World Wide Fund noted that over half of the Paris Agreement nations have agreed that harmful plastic products such as microplastics and PFAS should be banned or phased out. PFAS rules and regulations, considered a key driver in expected water treatment spend, are well underway in the U.S. and Canada, but the impact of reducing microplastics has yet to materialize.
Globally, regions are taking action to address microplastic pollution in water. For example, the European Commission revisited its Urban Waste Water Directive and proposed new microplastics monitoring standards in late 2022. If approved, the directive would impact wastewater treatment systems in all EU cities with more than 1,000 inhabitants. A broader UN commitment to microplastics and PFAS would likely result in increased spend for wastewater monitoring, upgrading of treatment systems, and more complex wastewater sludge management.
Reducing plastic would alter water opportunities in the pulp & paper, oil & gas, and chemical industries. Many countries have called for action beyond cutting plastic pollution and seek to curb its production. If the UN agreement fulfills those wishes, the substitution of paper products could account for 17% of the change in reducing plastic. This substitution would be especially prevalent in packaging, which accounts for roughly 40% of all plastic waste. Multiple U.S. states already ban certain plastic bags, and the EU prohibits several single-use items such as plastic cutlery and straws.
The pulp and paper industry, facing headwinds of reduced printed paper needs (e.g., newspaper and writing paper), has undergone limited growth over the past decade despite recent boosts in cardboard packaging. The growing opposition to plastic packaging will likely contribute to global water management spend for the pulp & paper market, which currently exceeds US$4 billion per year.
On the flip side, reducing plastics would also reduce the water management needs of the oil & gas and chemical industries. Plastics comprise roughly 8% of global oil demand and have historically been projected as the primary source of new demand for oil amid a changing energy landscape; a true shift away from plastics would reduce future water spend in the oil & gas and chemical industries.
Will the municipal water sector shift its messaging on bottled water? Bottled water may be necessary in regions without reliable municipal water, but its historical market growth in regions like North America speaks more to the success of industry marketing. Accelerated by COVID-19 consumer preference changes, bottled water’s popularity has added pressure to municipal utilities’ tight financial positions. Utilities such as DC Water and Louisville Water Company have used social media to sway consumers to drink tap water and reduce their bottled water consumption. Anti-plastic-water-bottle sentiment could give both public and private utilities more leverage in boosting consumer willingness to pay for municipal water and standard water rate increases to fund vital capital improvement plans.
Progress in the campaign “to beat plastic pollution” remains to be seen as the UN’s sway in enforcing binding resolutions is debatable (e.g., unenforceable treaty compliance) and Saudi Arabia, Russia, and China are leading objections to the treaty decisions. Regardless of the eventual outcome of the UN’s laudable efforts, the tide may be slowly shifting on plastic. The water industry will play a crucial role in adapting to a plastic-less future, from upstream impacts and manufacturing to removing microplastics from water. Bluefield will continue to monitor the evolving policy landscape and adapt its forecasts amid a variety of ever-changing market influences.