California lawsuit against ExxonMobil raises concerns in recycled plastics market

Recycled plastics markets reacted as California's Attorney General Rob Bonta filed a lawsuit against Exxon Mobil, for misleading the public about the limitations of recycling.

In a complaint filed in the San Francisco County Superior Court Sept. 23, the Department of Justice alleges that ExxonMobil has been deceiving Californians through misleading public statements and slick marketing promising that recycling would address the increasing amount of plastic waste ExxonMobil produces.

According to a statement issued by Bonta, the lawsuit is the result of a two-year investigation by the state into fossil fuel and petrochemical industries and their role in the global plastics pollution crisis.

"Today's lawsuit shows the fullest picture to date of ExxonMobil's decades-long deception, and we are asking the court to hold ExxonMobil fully accountable for its role in actively creating and exacerbating the plastics pollution crisis through its campaign of deception," Bonta said in the statement.

The lawsuit seeks to compel ExxonMobil, that converts fossil fuels into plastic monomers and polymers, such as polyethylene and polypropylene, which are usually made into consumer products and packaging like plastic bottles.

In a public statement sent to S&P Global Commodity insights, Exxon Mobil states, "For decades, California officials have known their recycling system isn't effective. They failed to act, and now they seek to blame others. Instead of suing us, they could have worked with us to fix the problem and keep plastic out of landfills. The first step would be to acknowledge what their counterparts across the U.S. know: advanced recycling works. To date, we've processed more than 60 million pounds of plastic waste into usable raw materials, keeping it out of landfills. We're bringing real solutions, recycling plastic waste that couldn't be recycled by traditional methods."

This lawsuit arises as demand for recycled plastic resins is expected to increase, as companies start ramping up purchases to fulfill their 2025 sustainability commitments.

Some recycled market participants are concerned that this lawsuit could cast a negative shadow over recycling efforts, undermining progress made in sustainability initiatives aimed at increasing the use of recycled plastics.

"Unfortunately, negativity always spreads more than positivity, so I am sure that anything bad towards recycling will spread like wildfire," a source said.

There is concern that this lawsuit could decrease end-consumer demand for plastic products, including those made from recycled materials, sources said.

However, some market participants do not expect an immediate impact on public opinion regarding plastic recycling, but said it could impact it in the future.

Platts, part of S&P Global Commodity Insights, last assessed recycled PET food-grade pellets Sept. 27 at 72.5 cents/lb FOB Los Angeles, while recycled HDPE natural pellets were assessed at 91 cents/lb FOB Chicago.