A view shows the Lego logo and some bricks inside their headquarters in Billund, Denmark, April 25, 2024.
| Photo Credit: Reuters

Toymaker Lego said on Wednesday (August 28, 2024) it was on track to replace the fossil fuels used in making its signature bricks with more expensive renewable and recycled plastic by 2032 after signing deals with producers to secure long-term supply.

Lego, which sells billions of plastic bricks annually, has tested over 600 different materials to develop a new material that would completely replace its oil-based brick by 2030, but with limited success.

Now, Lego is aiming to gradually bring down the oil content in its bricks by paying up to 70% more for certified renewable resin, the raw plastic used to manufacture the bricks, in an attempt to encourage manufacturers to boost production.

“This means a significant increase in the cost of producing a Lego brick,” CEO Niels Christiansen told Reuters.

He said the company is on track to ensure that more than half of the resin it needs in 2026 is certified according to the mass balance method, an auditable way to trace sustainable materials through the supply chain, up from 30% in the first half of 2024.

“With a family-owner committed to sustainability, it’s a privilege that we can pay extra for the raw materials without having to charge customers extra,” Christiansen said.

The move comes amid a surplus of cheap virgin plastic, driven by major oil companies’ investments in petrochemicals. Plastics are projected to drive new oil demand in the next few decades.

Lego’s suppliers are using bio-waste such as cooking oil or food industry waste fat as well as recycled materials to replace virgin fossil fuels in plastic production.

The market for recycled or renewable plastic is still in its infancy, partly because most available feedstock is used for subsidised biodiesel, which is mixed into transportation fuels.

According to Neste, the world’s largest producer of renewable feedstocks, fossil-based plastic is about half or a third of the price of sustainable options.

“We sense more activity and willingness to invest in this now than we did just a year ago,” said Christiansen. He declined to say which suppliers or give details about price or volumes.

Rival toymaker Hasbro has started including plant-based or recycled materials in some toys, but without setting firm targets on plastic use. Mattel plans to use only recycled, recyclable or bio-based plastics in all products by 2030.

Around 90% of all plastic is made from virgin fossil fuels, according to lobby group PlasticsEurope.

An offshore oil rig platform is photographed in Huntington Beach, California, U.S. July 4, 2024.
| Photo Credit: Reuters

From forest fires to hurricanes and other natural disasters: climate change risk is increasingly influencing oil prices, just as the world is struggling to shift away from high-polluting fossil fuels.

Hurricane Beryl became the latest weather phenomenon to jangle market nerves, boosting crude prices as it passed through Texas earlier this month.

Texas accounts for some 42% of total US crude oil production, according to Energy Information Administration data. It also possesses the largest number of crude oil refineries among US states.

“Almost half of the total US petroleum refining capacity is located along the Gulf, with Texas accounting for one-third of total US refining capacity,” Exinity analyst Han Tan told AFP.

And industry experts fear Beryl could herald a “super charged” hurricane season this year, according to Tan.

The World Meteorological Organization has warned that Beryl’s early formation and swift intensification could foreshadow similarly severe storms in the future.

Earlier this year meanwhile, oil market sentiment was jarred in May as forest fires broke out in Canada.

Traders took flight as out-of-control wildfires threatened to spread to the crude-producing hub of Fort McMurray, the nation’s largest oil sands mining facility.

‘More visible and more extreme’

Traders, more used to pricing in geopolitical turmoil, are now also weighing up the risks arising from the climate crisis.

“Climate change and its effect is a major source of risk in the oil markets, and I expect that that risk will only increase in the coming years as the effects of climate change become more visible and extreme,” Rystad Energy analyst Jorge Leon told AFP.

“Geopolitical risk is — at least partly — manageable by different actors. For example, international diplomacy could prevent a war.

“However, climate risk is less manageable in the short and medium run. In the long run, you can manage it by trying to reduce emissions,” he added.

At the same time, climate disruption is also having an increasingly visible impact on the operations of oil and gas companies, which are frequently slammed by environmentalists over their role in global warming.

“Climate change has been and will be affecting production,” summarised Tamas Varga, analyst at PVM Oil Associates.

He added that it also impacted refinery utilisation rates because “hot weather leads to malfunctioning” of the facilities.

Many European refineries were designed in the 1960s and 1970s to withstand colder rather than warmer temperatures, according to Tan.

Fossil fuels — coal, gas and oil — are responsible for over 75% of global greenhouse gas emissions, according to estimates from the United Nations.

At the COP28 UN climate conference in Dubai last December, almost 200 countries agreed to a call for a transition away from fossil fuels and a tripling of renewable energy capacity this decade.

However, the text crucially stopped short of a direct call for phasing out fossil fuels, while there were major concessions to the oil and gas industry and producer countries.

‘Economics can’t find solution’

Analysts argue that the oil market participants are simply focused on generating profit rather than saving the environment.

That throws the onus onto the world’s politicians and regulators, they add.

“Investors can’t be rationally expected to reverse the phenomenon when they try to maximise profits,” SwissQuote analyst Ipek Ozkardeskaya told AFP.

“Unless financial costs of climate damages outweigh the financial benefits, the economics can’t find the solution to the climate problem.”

“So, the ball is in politicians’ hands. Only concrete, sharp and worldwide regulatory changes with meaningful financial impact/incentives… could shift capital toward clean and sustainable energies.”

London:

Global fossil fuel consumption and energy emissions hit all-time highs in 2023, even as fossil fuels’ share of the global energy mix decreased slightly on the year, the industry’s Statistical Review of World Energy report said on Thursday.

Growing demand for fossil fuel despite the scaling up of renewables could be a sticking point for the transition to lower carbon energy as global temperature increases reach 1.5C (2.7F), the threshold beyond which scientists say impacts such as temperature rise, drought and flooding will become more extreme.

“We hope that this report will help governments, world leaders and analysts move forward, clear-eyed about the challenge that lies ahead,” Romain Debarre of consultancy Kearney said.

Last year was the first full year of rerouted Russian energy flows away from the West following Moscow’s invasion of Ukraine in 2022, and also the first full year without major movement restrictions linked to the COVID-19 pandemic.

Overall global primary energy consumption hit an all-time high of 620 Exajoules (EJ), the report said, as emissions exceeded 40 gigatonnes of CO2 for the first time.

“In a year where we have seen the contribution of renewables reaching a new record high, ever increasing global energy demand means the share coming from fossil fuels has remained virtually unchanged,” Simon Virley of consultancy KPMG said.

The report recorded shifting trends in fossil fuel use in different regions. In Europe, for example, the fossil fuel share of energy fell below 70% for the first time since the industrial revolution.

“In advanced economies, we observe signs of demand for fossil fuels peaking, contrasting with economies in the Global South for whom economic development and improvements in quality of life continue to drive fossil growth,” Energy Institute Chief Executive Nick Wayth said.

Industry body the Energy Institute, together with consultancies KPMG and Kearney, has published the annual report since 2023. They took over from BP last year, which had authored the report, a benchmark for energy professionals, since the 1950s.

Fossil fuel accounted for almost all demand growth in India in 2023, the report said, while in China fossil fuel use rose 6% to a new high.

But China also accounted for over half of global additions in renewable energy generation last year.

“China adding more renewables than the rest of the world put together is remarkable,” KPMG’s Virley told reporters.

Here are some highlights from the report on 2023:

CONSUMPTION
* Global primary energy demand rose by 2% in 2023 from 2022,to 620 EJ. * Fossil fuel use rose 1.5% to 505 EJ, which accounted for81.5% of the overall energy mix, down by 0.5% from 2022. * Fossil fuel use did not increase in a single Europeancountry in 2023. * Electricity generation rose by 2.5% in 2023, up slightlyfrom 2.3% of growth the previous year. * Renewable fuel generation (excluding hydro) gained 13% toa new record high of 4,748 terawatt-hours (TWh). * Renewables’ share of the overall energy mix excludinghydro was 8%, up from 7.5% in the 2022 report. * Including hydro renewables accounted for 15% of the globalmix.

OIL
* Oil consumption exceeded 100 million bpd in 2023 for thefirst time ever, following a 2% year-on-year rise. * Oil supply growth was met by non-OPEC+ producers, withU.S. output gaining 9% on the year. * China overtook the U.S. as the country with the largestrefining capacity in the world last year at 18.5 million bpd,though refining volumes still lagged behind at 82% utilisationvs the U.S.’ 87%. * Global gasoline consumption hit 25 million bpd last year,just above its 2019 pre-pandemic level. * Biofuels production increased by 8% to 2.1 million bpd in2023, driven by gains in the U.S. and Brazil. * The U.S., Brazil, and Europe accounted for 80% of globalbiofuels consumption.

NATURAL GAS
* Global gas production and consumption remained relativelyflat on the year in 2023. * LNG supply rose by almost 2% to 549 billion cubic metres(bcm). * The U.S. overtook Qatar as the leading global supplier ofLNG after a 10% rise in production. * Overall European gas demand was down 7% on the year in2023. * Russia’s share of European gas supply was just 15% in2023, from 45% in 2021.

COAL
* Coal consumption hit a new high of 164 EJ in 2023, up 1.6%on the year, driven by China and India. * India’s coal consumption exceeded that of Europe and NorthAmerica combined. * U.S. coal consumption fell by 17% in 2023 and has halvedin the last decade.

RENEWABLES
* The record high in renewable generation was driven byhigher wind and solar capacity, with 67% more additions in thosetwo categories in 2023 than 2022. * As much as 74% of net growth in overall power generationcame from renewables. * China accounted for 55% of all renewable generationadditions in 2023, and was responsible for 63% of new globalwind and solar capacity.

EMISSIONS
* Emissions grew by 2% on the year to exceed 40 gigatonnes. * Emissions rose despite the slight drop in fossil fuels’share of the energy mix, because emissions within the fossilfuels category became more intense as oil and coal use rose andgas held steady. * The report notes that since 2000, emissions from energyhave increased by 50%.

(Except for the headline, this story has not been edited by NDTV staff and is published from a syndicated feed.)