The concept of CO2 pricing has been around for some time. Energy and industrial companies in the European Union have been paying for their generated CO2e emissions since 2005. To this end, the EU has launched the European Emissions Trading System. The idea: For emissions arising from energy production, companies must purchase allowances at the respective costs and can trade them amongst themselves at market-based prices. The number of allowances newly made available by the EU Member States is decreasing year after year. The consequence: The supply of allowances is falling and prices are rising. This increases the economic pressure on companies and creates an incentive to invest in climate-friendly technologies.
Since 2021, the transport and heating sectors in Germany have also had a CO2 price. The new CO2 pricing is at the heart of the German government’s 2030 climate protection programme. Companies that put fuel oil, liquefied petroleum gas, natural gas, coal, petrol or diesel into circulation must purchase emission rights in the form of allowances from the German Emissions Trading Authority (DEHSt) in the Federal Environment Agency for the greenhouse gas emissions that their products cause. The cost of the allowances is paid by the fuel suppliers and then passed on to consumers. The national emissions trading system started on 1 January 2021 with a fixed price of 25 euros per tonne of CO2e. It will gradually increase to 55 euros in 2025. For the year 2026, a price corridor of at least 55 and at most 65 euros is planned. After this introductory phase, companies can auction the allowances. The total amount of allowances for CO2 emissions shall be limited in accordance with the climate objectives. The price is then formed on the market by supply and demand.
Where the CO2 in the plastic comes from
But what does the CO2 price have to do with plastic production? A great deal, because greenhouse gases are produced during the entire life cycle of a tonne of plastics, since energy is required for each step: during the production of the primary plastic and its precursors, during the processing of the plastic into products, and during disposal. A study published in February 2022 in the paper “nature sustainability” by the Swiss Federal Institute of Technology (ETH) in Zurich shows that in 2015 the carbon footprint of plastics was 2 GtCO2e, which is equivalent to 4.5% of global greenhouse gas emissions.
The lion’s share was from the burning of fossil raw materials for generating energy for worldwide plastic production with 1.7 GtCO2e. The carbon contained in the plastics corresponds to 890 MtCO2e – which would be the amount that would be produced if all plastics from 2015 were burned. In other words: Twice as much carbon is required as a fuel for plastic production as is contained in the plastic itself. The reason for the high amount of CO2e produced in plastic production is easily explained.
Between 1995 and 2015, plastic production increasingly shifted to coal-based economies such as China, Indonesia and South Africa. They generate most of their energy from coal. The countries then export the plastics produced there again – mainly to the EU and the USA. The study also found that most of the greenhouse gas emissions from plastics – around 96% – are generated by plastics production. By contrast, the incineration of the material as well as the energy expenditure for recycling only account for 4%.
Ways to reduce CO2 and lower costs
There are only two ways to reduce greenhouse gas emissions from plastics: On the one hand, in the recycling of plastics. This involves only the CO2 emissions produced by the energy input from fossil fuels, which is required for melting and compounding the material. The second way is to use renewable energies, because they do not produce greenhouse gas emissions. The right path is obvious: Recycling combined with renewable energies. For comparison: In the production of one tonne of the recycled material PA6.6 ENTRON eco A, 0.285 kg CO2e is produced if grey energy – that is, energy of unknown origin – is used. On the other hand, one tonne of PA6.6 produces an average of 7000 kg CO2e for new goods. If electricity from renewable energies is used, the CO2e emissions in the production of ENTRON eco A will approach 0.
The calculation for the end customer is simple: If one tonne of CO2e costs 30 euros in 2022, then the CO2 price for PA6.6 new products generates an average additional cost of 210 euros/t – and it becomes more expensive every year as the CO2 price rises. With ENTRON eco A, however, it is only 8.55 euros per tonne even with grey energy. Since ENNEATECH has been relying on renewable energy from wind and hydropower since 2022 and uses the process heat, this saves another 1.7% of the demand for fossil fuels. This also directly reduces the carbon footprint of the products by this factor.
In Italy it is already the case that the State grants a tax reduction corresponding to the lower amount of CO2e from ENTRON eco A. The lower the greenhouse gas emissions compared to new products, the higher the reimbursement. A plastics tax is also to be expected in Germany. The basis is the EU Taxonomy Regulation, which is a central component of the EU’s Green Deal. DIN spec 91446 is to be evaluated as a step in the direction of plastics control. It regulates the information on the amount of CO2e of recycled goods compared to newly produced goods and thus creates the basis for future taxation of plastic.
