Covid-19, supply chain disruption, trade restrictions and new environmental regulatory enforcement have resulted in a wholesale re-evaluation of the true cost of using oil-based materials.
Oil-based materials, including plastics, continue to dominate alternative materials mainly for reasons of cheap raw material supply; unrivalled global availability, and favourable regulatory factors. But times are changing: environmental impacts are topping agendas; regulatory frameworks are tightening; and investment is being redirected to alternatives. All these factors are driving up the cost of using materials like plastic, while at the same time boosting the alternative materials market.
The reason why oil-based materials, and plastics in particular, have been historically cheap is due to the fact that the industry is based on a high volume, low margin model. Once alternatives match plastic (or even come close) on cost, the model will break. Another economic certainty.
Direct production costs aren’t the only factor either, alternative feedstocks and materials are less exposed to fluctuations in oil-price. For example, as the price of crude increases, so too does the cost of marine fuel for shipping. The advantage with many alternative materials is that feedstock is locally sourced and the requirement for global transportation is diminished.
As with any commodity, simple economics can lead to rapid change – what is often termed the market dynamic. Following the current trajectory, the increasing cost of oil-based materials will support the rapid shift to a postplastic world.
Oil-based v Postplastic Materials Total Life Cycle Value Comparisons 5000 x 5211 px graphic
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