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December 15, 2023

Plastics and the environment

Plastic has a number of beneficial uses in our lives—positively contributing to the world when used responsibly. However, there is an environmental tradeoff when it comes to any sustainability topic, so it’s important to understand the waste management problem to effectively help our environment.

Plastics and the environment (PDF, 4MB)
Image of three plastic grocery bags

Take a minute to reflect on your morning. You probably turned off your alarm, rolled out of bed, brushed your teeth, showered, and grabbed a yogurt from the fridge—all in the span of twenty minutes. From the moment you woke up, you most likely interacted with at least eight plastic products and witnessed their benefits firsthand.

Plastic is an integral part of your everyday life…and for good reason! It’s a revolutionary material due to being low-cost, lightweight, durable, and customizable.

However, there are downsides of plastic if it’s used and disposed of irresponsibly such as ocean pollution, impacts to wildlife, and water contamination.

While Shell Polymers is working to address these important considerations such as designing for recyclability, the positive effects have not received enough attention. Whether you’re a plastic converter or brand owner, we aim to equip you with information on the benefits of plastic and how sustainability initiatives could fail without it.

Read on to learn more about the impact of plastic in everyday life.

Lowering GHG emissions one plastic product at a time

Let’s explore how plastic can make a positive impact by looking at a July 2022 McKinsey & Company report.

The global management consulting firm studied plastic greenhouse gas emissions in the United States throughout 2020, examining 14 common use cases (e.g., beverage bottles, insulation, textiles, etc.) in five sectors representing around 90 percent of global plastic volume.

The results? They found that plastics offer a lower total GHG emissions contribution compared to alternatives in a whopping 13 out of the 14 cases—with GHG emissions savings ranging from 10 to 90 percent.

Associated UN Sustainable Development Goals
Icon depicting sustainable development goal of “zero hunger” Icon depicting sustainable development goal of “good health and well-being”
Icon depicting sustainable development goal of “industry, innovation and infrastructure” Icon depicting sustainable development goal of “climate action”

Takeaways:

  • Plastics have reduced associated greenhouse gas (“GHG”) emissions compared to most alternatives for a variety of applications.
  • Many sustainability initiatives such as reducing transportation emissions are not as feasible without plastics.
  • There is an environmental dichotomy for plastics and Shell Polymers can help tip the scales toward positive impact.
Table comparing common 14 plastic applications against their non-plastic next-best alternatives and two plastic applications against plastics-enabled mixed materials for a total of 16 comparisons. The only plastic application that has more greenhouse gas emissions than the alternative is an industrial drum—HDPE is found to have a 30% difference in total GHG contribution in the U.S. in 2020 when compared to steel.

The life-changing impact of plastic

Terms such as “carbon” or “emissions” might immediately come to mind when you think sustainability, and while those are big components of operating sustainably, there is so much more to it than that.

Sustainability is all about balancing environmental, social, and economic priorities to effectively meet our present and future generation’s needs. Sustainable initiatives aim to create harmony between humanity and nature without depleting or damaging essential resources such as our oceans or the air we breathe.

For instance, take food packaging. That plastic prevents spoilage and extends shelf life—ensuring that the food you eat survives the journey from production to consumption 1. If not packaged properly, there could be environmental damage from broken goods and spoiled food. Additionally, because plastic packaging reduces food waste, there could be less energy 2 and water 3 required for agriculture as less food would need to be produced.

Strawberries in plastic containers
Interior of a house under construction

How about the house you live in? There’s a number of ways plastic is used throughout your home’s construction from pipes to flooring, but plastic’s use in insulation deserves a mention. By helping to regulate your home’s temperature, plastic spray polyurethane foam (PCF) can help you maintain an energy-efficient 4 and cost-effective household which can reduce energy-related emissions.

We’ve covered how plastic plays a role in your everyday life—but it can also help save lives! Specifically, plastic can be found in many life-saving products including seatbelts, airbags, IVs, pacemakers, hospital gowns and other types of medical equipment and devices.

There simply wouldn’t be as many breakthroughs in modern medicine without lightweight and durable plastic. Thanks to 3-D printers, medical institutions can manufacture custom prosthetics and address other critical needs on-demand.

The environmental dichotomy of plastic

Plastics can be a lower-carbon alternative, but we can further reduce GHG emissions through other lower-carbon products and improved circularity of the global plastics markets. This involves reducing, reusing, and recycling plastics through mechanical and chemical technologies to mitigate plastic pollution.

Shell’s commitment to the environment can be seen further through the company-wide target to become a net-zero emissions energy business by 2050. This supports the ambitious goal of the Paris Agreement (e.g., limit the rise in global average temperature this century to 1.5 degrees Celsius above pre-industrial levels).

Additionally, larger Shell is reducing the carbon intensity of the energy products sold by 6-8% by 2023, 9-12% by 2024, 9-13% by 2025, 20% by 2030, 45% by 2035 and 100% by 2050. Shell is also offering more lower-carbon energy options like solar and wind power and utilizing technology to safely capture and store carbon emissions. Through this carbon capture, Shell is reducing the amount of carbon entering the atmosphere from Shell facilities as well as customer facilities.

Line graph depicting Shell’s carbon emission reduction by year—starting with 2022 and ending in 2050.

Reducing transportation emissions is also a key sustainability opportunity. With the advancement and adoption of electric vehicles and other low-carbon vehicles, society may see a decrease in associated emissions. Also, plastics in vehicles actually help reduce vehicle weight and therefore also decrease associated GHG emissions. With all of this in mind, larger Shell is providing lower-carbon energy for charging electric vehicles.

Of course, we’d be remiss if we didn’t mention the issue of plastic waste and the resulting pollution. It’s a very real problem in our society—with 70-80% of the plastic pollution in the ocean coming from land-based sources and 20-30% coming from marine sources such as fishing nets and lines. 5

Despite the benefits of plastic, the polyethylene industry must improve its environmental performance and further promote recycling to support the circular economy. At Shell Polymers, we support policies that promote material production and product design for enhanced reuse and recyclability, while considering the life cycle impacts of plastics and alternative materials.

As such, we encourage the use of recycled content in new products to improve efficiency, promote the inclusion of recycled plastics, encourage circularity and reduce waste.

The Shell Polymers solution

At a high level, plastic’s strength and lightweight nature can play a crucial role in reducing GHG emissions, along with enhancing energy efficiency and preventing food waste. However (and not surprisingly), anything GHG-related is never that cut and dry.

While we hope to have provided some insight, we recognize that GHG emissions is a complex topic that calls for action.

That’s why we at Shell Polymers are constantly looking for new recycling solutions and innovating in the sustainability realm to ensure that the overarching climate impact of plastics is a positive one.

Additionally, we have adopted sustainable measures in our Pennsylvania plant such as incorporating large amounts of recycled plastic into the asphalt of the road around the plant and using recycled pipe for our underground piping. Learn more about our sustainable site design here.

As a responsible polyethylene supplier, our goal at Shell Polymers is to improve environmental performance, increase recycling rates, and prevent environmental leakage.

Next steps

Cautionary Note

The companies in which Shell plc directly and indirectly owns investments are separate legal entities. In this webpage “Shell”, “Shell Group” and “Group” are sometimes used for convenience where references are made to Shell plc and its subsidiaries in general. Likewise, the words “we”, “us” and “our” are also used to refer to Shell plc and its subsidiaries in general or to those who work for them. These terms are also used where no useful purpose is served by identifying the particular entity or entities. ‘‘Subsidiaries’’, “Shell subsidiaries” and “Shell companies” as used in this webpage refer to entities over which Shell plc either directly or indirectly has control. Entities and unincorporated arrangements over which Shell has joint control are generally referred to as “joint ventures” and “joint operations”, respectively. “Joint ventures” and “joint operations” are collectively referred to as “joint arrangements”. Entities over which Shell has significant influence but neither control nor joint control are referred to as “associates”. The term “Shell interest” is used for convenience to indicate the direct and/or indirect ownership interest held by Shell in an entity or unincorporated joint arrangement, after exclusion of all third-party interest.

Forward-Looking Statements

This webpage contains forward-looking statements (within the meaning of the U.S. Private Securities Litigation Reform Act of 1995) concerning the financial condition, results of operations and businesses of Shell. All statements other than statements of historical fact are, or may be deemed to be, forward-looking statements. Forward-looking statements are statements of future expectations that are based on management’s current expectations and assumptions and involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied in these statements. Forward-looking statements include, among other things, statements concerning the potential exposure of Shell to market risks and statements expressing management’s expectations, beliefs, estimates, forecasts, projections and assumptions. These forward-looking statements are identified by their use of terms and phrases such as “aim”, “ambition”, ‘‘anticipate’’, ‘‘believe’’, ‘‘could’’, ‘‘estimate’’, ‘‘expect’’, ‘‘goals’’, ‘‘intend’’, ‘‘may’’, “milestones”, ‘‘objectives’’, ‘‘outlook’’, ‘‘plan’’, ‘‘probably’’, ‘‘project’’, ‘‘risks’’, “schedule”, ‘‘seek’’, ‘‘should’’, ‘‘target’’, ‘‘will’’ and similar terms and phrases. There are a number of factors that could affect the future operations of Shell and could cause those results to differ materially from those expressed in the forward-looking statements included in this webpage, including (without limitation): (a) price fluctuations in crude oil and natural gas; (b) changes in demand for Shell’s products; (c) currency fluctuations; (d) drilling and production results; (e) reserves estimates; (f) loss of market share and industry competition; (g) environmental and physical risks; (h) risks associated with the identification of suitable potential acquisition properties and targets, and successful negotiation and completion of such transactions; (i) the risk of doing business in developing countries and countries subject to international sanctions; (j) legislative, judicial, fiscal and regulatory developments including regulatory measures addressing climate change; (k) economic and financial market conditions in various countries and regions; (l) political risks, including the risks of expropriation and renegotiation of the terms of contracts with governmental entities, delays or advancements in the approval of projects and delays in the reimbursement for shared costs; (m) risks associated with the impact of pandemics, such as the COVID-19 (coronavirus) outbreak; and (n) changes in trading conditions. No assurance is provided that future dividend payments will match or exceed previous dividend payments. All forward-looking statements contained in this webpage are expressly qualified in their entirety by the cautionary statements contained or referred to in this section. Readers should not place undue reliance on forward-looking statements. Additional risk factors that may affect future results are contained in Shell plc’s Form 20-F for the year ended December 31, 2022 (available at www.shell.com/investor and www.sec.gov). These risk factors also expressly qualify all forward-looking statements contained in this webpage and should be considered by the reader. Each forward-looking statement speaks only as of the date of this webpage, December 15, 2023. Neither Shell plc nor any of its subsidiaries undertake any obligation to publicly update or revise any forward-looking statement as a result of new information, future events or other information. In light of these risks, results could differ materially from those stated, implied or inferred from the forward-looking statements contained in this webpage.

Shell’s net carbon intensity

Also, in this webpage we may refer to Shell’s “Net Carbon Intensity”, which includes Shell’s carbon emissions from the production of our energy products, our suppliers’ carbon emissions in supplying energy for that production and our customers’ carbon emissions associated with their use of the energy products we sell. Shell only controls its own emissions. The use of the term Shell’s “Net Carbon Intensity” is for convenience only and not intended to suggest these emissions are those of Shell plc or its subsidiaries.

Shell’s net-Zero Emissions Target

Shell’s operating plan, outlook and budgets are forecasted for a ten-year period and are updated every year. They reflect the current economic environment and what we can reasonably expect to see over the next ten years. Accordingly, they reflect our Scope 1, Scope 2 and Net Carbon Intensity (NCI) targets over the next ten years. However, Shell’s operating plans cannot reflect our 2050 net-zero emissions target and 2035 NCI target, as these targets are currently outside our planning period. In the future, as society moves towards net-zero emissions, we expect Shell’s operating plans to reflect this movement. However, if society is not net zero in 2050, as of today, there would be significant risk that Shell may not meet this target.

Forward Looking Non-GAAP measures

This webpage may contain certain forward-looking non-GAAP measures such as [cash capital expenditure] and [divestments]. We are unable to provide a reconciliation of these forward-looking Non-GAAP measures to the most comparable GAAP financial measures because certain information needed to reconcile those Non-GAAP measures to the most comparable GAAP financial measures is dependent on future events some of which are outside the control of Shell, such as oil and gas prices, interest rates and exchange rates. Moreover, estimating such GAAP measures with the required precision necessary to provide a meaningful reconciliation is extremely difficult and could not be accomplished without unreasonable effort. Non-GAAP measures in respect of future periods which cannot be reconciled to the most comparable GAAP financial measure are calculated in a manner which is consistent with the accounting policies applied in Shell plc’s consolidated financial statements.

The contents of websites referred to in this webpage do not form part of this webpage.

We may have used certain terms, such as resources, in this webpage that the United States Securities and Exchange Commission (SEC) strictly prohibits us from including in our filings with the SEC. Investors are urged to consider closely the disclosure in our Form 20-F, File No 1-32575, available on the SEC website www.sec.gov.

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