Earth Day 2022 |  GodmodeTrader

Earth Day 2022 | GodmodeTrader

Almost everyone now has them among their relatives or acquaintances: people who shop at stores that offer products without plastic packaging or who have food filled in containers that they have brought with them. In this context, it is easy to conclude that a widening front is being formed here against the avalanche of plastic that has been spilled on the planet in recent decades. It is estimated that humanity has produced a total of around eight billion tons of plastic since the start of mass plastic production some 65 years ago. Only a small part was recycled or incinerated. However, most of it ends up in landfills or in the environment, for example in the form of around a million plastic beverage bottles sold every minute around the world, or in single-use plastic straws. , of which about 36.4 billion are used. every year.

“Although many people are trying to stop this trend with their consumption behavior, the industry has invested around $180 billion in new plants for the production of plastic raw materials since 2010, which could lead to a 40 percent increase in production volume over the next decade, says Tim Bachmann ahead of “Earth Day” on April 22. He manages the DWS Invest ESG Climate Tech equity fund, which invests in companies that offer products and services to protect the climate and the environment.

In the paper and cardboard industry, orders for packaging alternatives increase

An important reason for the expected increase is demographic development: the number of single-person households is increasing worldwide, to which the industry is reacting with lower filling quantities, which will allow the mountain of packaging, which already represents around 36 percent of the world’s plastic. production, to continue growing. The consequences of littering the environment with plastic, which is in fact not biodegradable, are already dramatic. “The ingestion of the smallest pieces of plastic from the oceans is lethal to Prochlorococcus marinus, for example. Not only is this bacterium probably the most common organism on earth in terms of numbers, it is also responsible for the production of about 20 percent of our oxygen and the absorption of 20 percent of all carbon dioxide.” says Bachmann.Overall, at least 15 percent of all species are threatened with extinction from ingestion or strangulation with plastic parts.

“Plastic packaging can be partially replaced by alternatives. The paper and board industry is already benefiting from this with increasing orders, and several listed companies in the US are working on biodegradable plastics. Both can be interesting opportunities for investors”, explains the fund manager. In his opinion, however, expanding the infrastructure for recycling that is as complete as possible is much more important. And it is a complex task. Because plastic waste must not only be collected widely with seamless logistics, but must also be meticulously separated according to its composition so that it can be recycled and reused. “And here the need for investment is immense, which could benefit providers of sorting systems or deposit return systems, for example,” says Bachmann.

Conservatively calculated, a total of $135 billion needs to be invested worldwide to achieve a 50 percent plastics recycling rate. A look at one of the biggest investors in this area, the Alliance to End Plastic Waste, which intends to use $1.5 billion over five years, shows how little has been released so far. In the EU, the waste collection and recycling capacity is currently estimated at 36 percent of the total. However, according to the regulation, at least 50 percent of all plastic packaging must be recycled by 2025, and even 65 percent is required for all packaging by then.

Plastic recycling should now receive a further boost in attractiveness due to rising raw material prices. After all, about eight percent of the world’s oil production is used to make plastic. “And with oil companies spending little on capacity in recent years, the high price of oil is unlikely to change much in the long term,” says fund manager ESG.