Turning Off the Tap: Rethinking Plastic Production Subsidies for a Sustainable Future

We all know plastic pollution is a global crisis, but what we need to address is: plastic production subsidies. We talk a lot about cleaning up the waste, but let’s be honest—the real problem starts way before plastic ever reaches the environment. The financial incentives behind the massive and growing production of virgin plastic are rarely discussed, and it’s time to shine a light on them.

A recent report, “Plastic Money: Turning Off the Subsidies Tap,” lays it all out: governments in the top 15 polymer-producing countries are spending over USD 30 billion each year to subsidise plastic production. That’s right—while we’re scrambling to fix the mess plastic is causing, some of the world’s biggest economies are still propping up its production.

The Hidden Costs We Can’t Afford to Ignore

Let’s break it down. China alone is spending over USD 11 billion on subsidies, while Saudi Arabia isn’t far behind with USD 8 billion. These subsidies help reduce feedstock prices and energy costs, which makes plastic production cheaper and encourages further expansion. Sure, it’s good for producers in the short term, but what about the long-term cost?

Plastic pollution is spiralling out of control, with environmental damage piling up. And the subsidies driving cheap, abundant plastic are a key reason why. We’ve got to ask ourselves—how much longer can we keep this going?

Why Cutting Subsidies Is the Real Game-Changer

Here’s the thing: we can’t just focus on the waste end of the problem. Recycling is critical, but it’s not going to solve the core issue. The root cause is simple—plastic production is cheap, and as long as it stays that way, companies will keep churning out new plastic at an alarming rate.

The report suggests that eliminating subsidies could raise the price of raw plastics just enough to make alternatives more competitive. And get this—raising the price of a plastic bottle by 10% would increase the final cost by less than 1%. That’s a tiny price bump compared to the huge environmental benefits we’d gain from reducing virgin plastic production.

Let’s Talk About Recycled Plastic

We’ve already got a solution staring us in the face: recycled plastic. Using recycled materials can slash energy use by up to 88% compared to producing virgin plastic. That’s a win-win for the environment and the economy. It reduces greenhouse gas emissions, conserves resources, and takes some pressure off fossil fuel extraction.

Plus, using recycled plastic helps close the loop. Instead of letting plastic waste pile up in our oceans and landfills, we can keep those materials in use. Brands that make this shift aren’t just doing good—they’re staying competitive in a market where consumers increasingly demand sustainable choices.

If we remove subsidies for virgin plastic, recycled materials become even more viable. This could spur more innovation in eco-friendly products and packaging, and it’s exactly the kind of change we need right now.

It’s Time to Act—Together

As global negotiations around the UN Global Plastics Treaty move forward, removing harmful subsidies has to be on the table. We need transparency and international cooperation to track and reform these subsidies. Otherwise, the plastic industry will keep benefiting from government support while we struggle to keep up with the environmental damage.

At Plastics For Change, we’re committed to creating a future where sustainability and social equity are at the heart of every economic decision. Ending subsidies for virgin plastic isn’t just a step toward environmental protection—it’s about building a more just and sustainable economy for everyone. Supporting recycled plastics is a critical part of transitioning to a circular economy that benefits people and the planet.

It’s time to stop fueling the plastic crisis with government subsidies. Let’s turn off the tap and invest in a future where businesses, governments, and communities thrive together in a circular economy.