Plastic demand could reduce by up to 30% in an accelerated energy transition scenario

Wood Mackenzie’s recent insight, Chemicals demand in a 1.5 °C scenario provides an integrated view of various energy transition scenarios across each segment, commodity, technology, and market.

The report explores three potential outcomes for the energy and resources sector, looking at the base case, pledges, and a Net Zero 2050 scenario.

Fill in the form on the right of the page to download the full insight. Or, read on for an overview of the scenarios.

Total polymer demand to grow by 2050

In Wood Mackenzie’s base case, we estimate that total plastic demand (virgin + recycled) will grow to around 880 Mt by 2050, driven by single use packaging and consumer products.

However, total plastic demand in the accelerated energy transition (AET) 1.5 C scenario, shows a 30% reduction by 2050.

Virgin production alone would decrease by 35% compared to the base case.

Mechanisms to reduce polymer demand

Elimination mechanisms supported by legislation such as the EU’s Packaging and Packaging Waste Regulation (PPWR) directive, would see the ban of certain plastic products like single use plastics, packaging and take away containers.

Substitution mechanisms would see the use of plastics shift to other circular and sustainable alternatives, while reuse and refill products would reduce the consumption of single use materials, impacting total demand.

Virgin polymer demand could be reduced through mechanical recycling. However, it does require proper waste management and sorting technologies.

Chemical recycling has the potential to commercially manage waste that cannot be treated by mechanical recycling, and bio-based packaging that uses feedstocks can similarly reduce polymer production.

Total plastic demand reduction impact

In implementing these various mechanisms, we forecast that total plastic demand could reduce by up to 260 Mt by 2050 compared to our base case outlook.

Developed economies of Europe and North America would be expected to reduce plastic consumption at a quicker pace at 5% loss per year between 2025 and 2050, compared to the developing economies in other parts of the world.

Europe currently has multiple initiatives under its circular economy action plan (CEAP) such as PPWR, the Carbon Border Adjustment Mechanism (CBAM), the End-of-Life Vehicles Directive (ELV), and its strategy for sustainable and circular textiles.

The effects of these mechanisms are expected to be exaggerated in an AET scenario. Nevertheless, Europe would be expected to lose about 65% of its total plastics demand by 2050. Packaging and consumer product sectors would be impacted the most with a demand loss of 40% and 30% respectively in the AET scenario.

The impact of technology on recycling mechanisms

Given the global legislations that are in place, recycling would be an effective option for treating waste.

In the AET scenario, recycling is forecast to reduce 270 Mt of virgin demand by 2050 compared to our base case.

Improved sorting technologies would see materials being matched to the most effective recycling method, leading to higher yields and operational efficiencies.

Likewise, investments in chemical recycling will see less hard-to-recycle materials sent to landfill, driving the circular economy transition.

AET impact on polyolefins, ethylene, and chemicals feedstock

Polyethylene demand is expected to grow to 220 Mt by 2050 in our base case, while polypropylene is expected to grow to 170 Mt.

In an accelerated energy transition scenario, global polyolefins demand reduction is forecast to reach 166 Mt by 2050, whereas recycling is expected to reduce virgin polyethylene demand by around 30 Mt by 2050 in the base case.

Ethylene production is projected to grow at around 50%, surpassing 300 Mt by 2050 to meet demand growth. However, under the AET demand scenario, we anticipate a 35% decline in ethylene production as aligned with demand by 2050.

Likewise, chemicals feedstock demand is forecast to reduce by around 320 Mt globally by 2050 in the AET scenario.

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