Newsletter: 175

Date:     January 20, 2025

 

SUMMARY 2024

 PLASTIC TAX.- Spain has been one of the first countries to penalize the consumption of virgin polymers with a special tax of €0.45 per kilo.

Other countries in Europe have followed in Spain’s footsteps, such as Portugal, Italy and the United Kingdom, but it is Spain that has implemented the highest tax.

The objective is to discourage the use of single-use plastics and encourage recycling. A high tax seeks to internalize the environmental costs of this type of plastic.

But is it correct to apply a tax such as VAT on another tax?

By charging a specific tax on plastic and, in addition, applying VAT, a double tax burden is being imposed on the same product.

If the goal is to reduce plastic consumption, is it really necessary to apply double taxation? Wouldn’t it be more effective to invest the income obtained in awareness campaigns and in the improvement of recycling infrastructures?

In short, the current situation raises questions about the effectiveness and equity of environmental policies. It is necessary to carefully analyze the effects of these measures and look for alternatives that are more efficient and fair. Civil society and experts must be involved in this debate to find solutions that promote a circular economy and reduce our ecological footprint.

 

GEOPOLITICAL AND ECONOMIC SITUATION OF THE WEST IN 2024.– The past year has been marked by a complex interplay of geopolitical and economic factors that have shaped the landscape of the West.

War in Ukraine: The conflict in Ukraine has continued to be the main source of tension in Europe, with global implications in terms of energy and food security. The sanctions imposed on Russia have led to disruptions in supply chains and contributed to inflation.

Despite the measures implemented by central banks, inflation has remained high in many Western economies, eroding citizens’ purchasing power and generating uncertainty.

Energy crisis.- The war in Ukraine has exacerbated the energy crisis in Europe, with record gas prices and the search for new sources of supply.

Geopolitical tensions.-  Relations between the United States and China have remained tense, with trade and technology disputes. In addition, instability in some regions of the world has created new challenges to international security.

Energy transition.- The need to reduce greenhouse gas emissions has driven the transition to renewable energies, but has also posed challenges in terms of investment and energy security.

Growing inequality.- The COVID-19 pandemic and the economic crisis have exacerbated inequality in many Western societies, generating social and political tensions.

Economic consequences:

The Western economy has experienced moderate growth, affected by geopolitical uncertainty and inflation.

Central banks have raised interest rates to combat inflation, which has made credit more expensive and slowed economic activity.

Europe’s single currency, the euro, has weakened against the U.S. dollar, making imports more expensive and generating inflationary pressures.

The year 2024 has made it clear that the West is facing a complex and challenging environment. The outlook for the coming years will depend on the evolution of the war in Ukraine, the ability of governments to control inflation and the effectiveness of policies to promote the energy transition and reduce inequality.

 

The Future of the West in 2025: A Perspective from 2024

Realities of 2024 That Will Shape 2025

• The war in Ukraine, tensions between the United States and China, and instability in the Middle East will continue to mark the international agenda. Political polarization and nationalism could intensify, undermining global cooperation.
• Inflation, the energy crisis, and supply chain disruptions will continue to be major challenges. The transition to a green and digital economy will accelerate, but it will also generate new inequalities.
• Artificial intelligence, biotechnology, and other disruptive technologies will transform various sectors, from healthcare to manufacturing. However, they will also raise important ethical and safety questions.
• The COVID-19 pandemic has left a deep mark on society, accelerating digitalization and changing the ways we work and relate to each other. Social inequalities and political polarization have become more acute.
• The effects of climate change will become increasingly evident, with more frequent and intense extreme events. The pressure to take more ambitious action to mitigate and adapt to climate change will increase.

 

Scenarios for 2025

 Increasing political polarization and geopolitical tensions could lead to further fragmentation of the West and a decline in international cooperation. Traditional alliances could weaken and new forms of great-power competition will emerge.

1. In the face of global challenges, such as climate change and pandemics, Western countries could strengthen their ties and cooperate more closely to find common solutions. The European Union could play a more proactive role in global governance.
2. The emergence of new powers, such as China, and the growing influence of non-state actors, such as big tech companies, could give rise to a new world order that is more multipolar and complex. The West will have to adapt to this new environment and find its place in it.

 

Key Challenges for the West in 2025

• Economic Recovery: The West will need to find ways to drive economic recovery in a sustainable way, while addressing social inequalities and climate challenges.
• Technology and Ethics: The development and application of new technologies, especially robotics and AI, will pose important ethical and safety dilemmas. The West will need to establish appropriate rules and regulations to ensure that technology is used responsibly.
• Global Governance: The fragmentation of the international order will require new forms of global governance. The West will have to play a leading role in building a fairer and more effective multilateral system.
• Democracy: Liberal democracy will face new challenges, both internal and external. The West will need to uphold democratic values and find ways to strengthen democratic institutions.

 

The PET market.

The PET market in Europe has undergone significant changes in recent years, driven by growing environmental awareness and stricter regulations.

Key aspects of the PET market in Europe:

• Increased demand for recycled PET: The EU’s Single-Use Plastics Directive has driven a significant increase in demand for recycled PET. Manufacturers are increasingly required to incorporate higher percentages of recycled content into their products, which has led to increased competition in the recycled PET market.
• Supply chain challenges: Despite increased demand, the recycled PET supply chain still faces challenges. The quality and availability of recycled material can vary, making it difficult to ensure a consistent and reliable supply for manufacturers.
• Innovation in recycling technologies: The industry is investing in new recycling technologies to improve the quality of recycled PET and expand applications. This includes depolymerization technologies and advanced sorting technologies.
• Volatile prices: Recycled PET prices can be volatile and are influenced by several factors, including consumer demand, availability of recycled material, and oil prices (feedstock for the production of virgin PET).
• Growing interest in bio-based alternatives: In addition to recycled PET, there is a growing interest in the development of bio-based alternatives to PET, such as biodegradable and compostable polymers.

Current trends:

• Increased transparency: Consumers are increasingly interested in the sustainability of the products they buy. Manufacturers are responding to this demand by providing more detailed information about the recycled content of their products and their production practices.
• Value chain collaboration: Collaboration between different actors in the value chain, from PET manufacturers to retailers, is critical to driving the circular economy of PET.
• Development of new markets: New markets are being explored for recycled PET, such as construction and automotive.

Future challenges:

• Scaling up recycling technologies: To meet the growing demand for recycled PET, it is necessary to scale up existing recycling technologies and develop new solutions.
• Quality assurance: It is essential to ensure the quality of recycled PET so that it can be used in a wide range of applications.
• Policy coordination: Greater coordination between policies at European and national level is required to facilitate the transition to a circular economy of PET.

 

BRENT

Brent Oil Evolution and Projection for 2025

Brent oil, considered a benchmark in the global oil market, has experienced significant volatility in recent years, influenced by various factors such as:

• COVID-19 pandemic: The drastic drop in global oil demand due to mobility restrictions and lower economic activity generated strong downward pressure on prices.
• War in Ukraine: The conflict has generated uncertainty in energy markets, affecting supply chains and causing prices to rise.
• OPEC+ policies: Decisions by the Organization of the Petroleum Exporting Countries (OPEC) and its allies (OPEC+) on production levels have directly influenced oil supply and prices.
• Energy transition: Growing concerns about climate change and the transition to renewable energy sources have led to increased volatility in oil markets.

Projection for 2025

Projections for the price of Brent oil in 2025 vary according to different institutions and analysts, but in general some moderation is expected compared to the levels reached in 2022. Some factors that could influence this projection are:

• Global economic recovery: The speed and strength of the post-pandemic economic recovery will have a direct impact on oil demand.
• Government policies: Government measures to stimulate demand, such as economic stimulus packages, and policies to promote renewables will influence the price trajectory.
• Investment in new technologies: Investment in clean energy technologies and the production of alternative fuels could limit the growth of oil demand in the long term.
• Geopolitics: Geopolitical conflicts and tensions between major oil producers will continue to be a factor of uncertainty.

In summary, the price of Brent oil in 2025 is expected to remain at relatively stable levels, with possible short-term fluctuations due to unforeseen events. However, the long-term trend points towards a gradual decline in prices as the energy transition progresses.

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