Expansion of Primary Plastics Production and Its Climate & Financial Implications in Asia
1. Background
Asia is rapidly becoming the center of global plastics and petrochemical expansion. China, India, Southeast Asia, and parts of West Asia are witnessing new investments in steam crackers, polymerization lines, and integrated petrochemical complexes. In China alone, more than 10 million t/year of new ethylene capacity entered the market in 2024–2025, putting downward pressure on margins and spurring concerns about long-term oversupply.
At the same time, the climate implications of such expansion are profound. A recent bottom-up modeling study estimates that primary plastics production accounted for ~2.24 Gt CO₂e in 2019 (≈ 5.3 % of global non-AFOLU emissions), and under a moderate growth trajectory (2.5 %/year) would more than double by 2050 — using up 21–26 % of the remaining carbon budget compatible with a 1.5 °C pathway. (Karali et al., 2024) Globally, the life-cycle emissions of plastics (including production, transport, end-of-life) are increasingly recognized as a growing share of climate risk. According to RMI’s analysis, even if key mitigation levers reduce emissions intensity by ~34 %, total emissions could still increase under business-as-usual growth trajectories.
From a financial and industrial perspective, oversupply is driving down profit margins and threatening the long-term financial viability of the sector. According to S&P Global analysis, oversupply in Asia’s olefins markets could persist 3–4 years or more, with negative or thin margins expected to last until after 2030. And market watchers expect capacity growth in Asia to outpace demand well into the 2030s, driving global operating rates below 75% by 2030. In Korea, prominent petrochemical firms reported steep profit declines in 2024, citing oversupply pressures as key drivers. Meanwhile, credit rating alerts and downgrades have increasingly targeted the petrochemical and plastics sectors, reflecting structural vulnerabilities.
This event aims to bring together climate, industrial, financial, and policy perspectives to examine the implication of primary plastics production expansion in Asia. It will explore how to align the industry with climate imperatives, discussing how governance instruments including a global plastics treaty could act as a lever to restrain primary plastics production expansion.
2. Time & Location
• Date: November 13, 2025
• Time: 10:00 a.m. – 11:00 a.m.
• Location: Asia Climate Solutions Pavilion at COP30 (Blue Zone)
3. Event Goals:
• Map out the trajectory of primary chemical / plastics expansion in Asia.
• Unpack the climate implications of such expansion, exploring the risk that unchecked expansion jeopardizing 1.5 °C trajectories.
• Analyze the financial and industrial risks of oversupply, documenting margin compression, plant shutdowns, credit stress in the petrochemical sector.
• Explore leverage points for governance and policy intervention, including global plastics treaty, to set pathways for climate-aligned industrial transition.
4. Participants:
Moderator: Yujung Shin, Head of Petrochemical Campaigns at SFOC (Solutions for Our Climate)
Panelist:
• Lili Fuhr, Director, Fossil Economy Program, CIEL (Center for International Environmental Law)
• Julia Metz, Ph.D. Director Industry, Agora Industry
• Shahriar Hossain, Ph.D. Expert Advisor, ESDO (Environment and Social Development Organization)
• (TBD)