This blog was written in collaboration with Plastic Pollution Coalition.
Each year, the U.S. subsidizes the production of plastic, draining public resources and threatening human health. These subsidies to the interconnected fossil fuel, petrochemical, and plastic industries take the form of tax breaks, grants for capital investments, and concessional loans, and persist regardless of the political administration in power.
Globally, subsidies to the plastic polymer industry in the top 15 plastic-producing countries total an estimated $30 billion annually—an amount that exceeds the GDP of 42% of countries worldwide. By keeping plastic prices artificially low, these subsidies allow the industry to dominate markets and continue mass-producing virgin plastic, causing extreme harm to both ecosystems and human health.
While extended producer responsibility (EPR) laws that hold companies accountable for their plastic products and pollution are gaining traction, they aren’t enough. How can these laws, and other plastic mitigation efforts, effectively challenge plastic production when subsidies perpetuate artificially low plastic prices? Subsidies to the petrochemical industry stifle our ability to mitigate plastic pollution as the financial and legal system is designed to covertly keep these industries in power while local communities bear the costs.
Subsidies Prop Up Plastic Production—and Pollution

Since 2012, at least 32 of 50 new or expanded U.S. plastics plants received nearly $9 billion in tax subsidies, an average of $278 million per factory. A staggering 84% of these facilities violated air pollution limits at least once in the past three years. In 2021, the 50 plastics plants reported approximately 63 million tons of greenhouse gases, 471,744 pounds of benzene—a carcinogen also proven to cause endocrine disruption—27,923 tons of nitrogen oxide, and 20,182 tons of carbon monoxide.
Alarmingly, two-thirds of the people in communities living near these plants are people of color. Taxpayer dollars are effectively funding companies that break pollution control laws and harm marginalized communities.
Subsidies are intended to support industries that benefit society. However, subsidizing industries fundamentally incompatible with environmental and public health goals undermines this principle.
The Environmental Integrity Project reported that the company Indorama received taxpayer dollars for one of their plastic-producing plants after promising to be “committed to protecting public safety, health, and the environment,” only to break these promises repeatedly after construction by violating permits, polluting nearby communities, and causing severe safety concerns for residents and workers. This story is similar to many plastic plants that have been made possible through public funding—tax money that is often siphoned from schools, infrastructure, social programs, and parks.
The historical link between plastics, petrochemicals, and fossil fuel subsidies is clear. Fossil fuel subsidies that include low-cost leases and generous tax breaks date back at least to the early 20th century. During the 1970s energy crisis, these subsidies increased to boost domestic production of gas and oil.
This financial support continues to fuel the plastics industry as oil and gas byproducts serve as feedstocks for plastic production. Every year, United States taxpayers pay $20 billion in built-in regulatory loopholes for fossil fuel giants to remain highly profitable while keeping oil and gas prices below what they should cost to produce.
In a reinforcing feedback loop, taxpayer money also serves as a foundation to keep fossil fuel companies in power. Combined with staggering profit margins, financial support from subsidies help them elect favorable politicians that keep subsidies flowing, profits high, and wheels spinning. An analysis from the House Committee on Oversight and Reform reported that Exxon, Chevron, Shell, BP, and API (Big Oil) spent a combined $452.6 million lobbying the federal government since 2011.
Despite the recent imperative and global shift towards non-fossil renewable energy, the fossil fuel industry continues to grow from subsidy-backed petrochemical expansion. This is true even as wind and solar energy surpassed fossil fuels in global electricity generation in 2023. Despite renewable energy providing a scaled and promising energy future, petrochemicals are still used to create plastics. Since 2019 over 42 new plastics facilities have opened with the potential to release 55 million tons of greenhouse gases. Beyond the general environmental impacts of these greenhouse gases, the communities surrounding these plants will bear the greatest harm to their health.
As subsidies for fossil fuels continue, industries that should be phased out instead continue to be propped up and maintain low plastic prices, undermining efforts to transition to sustainable alternative energy and materials.
Subsidies for the fossil fuel and petrochemical industries create an unfair playing field for alternatives and substitutes, prohibiting our collective ability to transition to a more sustainable future with healthier materials.
Timeline of the Impacts of Plastic Subsidies
Here’s a timeline of how plastics have grown and maintained their stronghold despite their numerous negative health and environmental impacts:
1913: The United States establishes the intangible drilling cost (IDC) deduction, allowing oil and gas companies to deduct most costs associated with drilling, marking the beginning of significant fossil fuel subsidies.
1950s: The plastic industry determines that single-use plastic will be the most profitable business model, and it must teach society to be more wasteful.
1960s: Scientists first publish papers on plastic pollution in the environment, including microplastics in the oceans. The plastic industry did what it could to suppress such research and stop this information from reaching the public by emphasizing plastic recycling as a solution.
1970s: The oil crisis prompts the U.S. to double down on subsidies for domestic fossil fuel production to achieve energy security. This subsidized fossil fuel expansion indirectly supports the booming plastics industry, as oil and gas byproducts become feedstocks for plastic production.
1973: The invention of PET (polyethylene terephthalate) bottles revolutionizes packaging, further embedding plastics in daily life and consumer markets. As the oil crisis in the U.S. led to a surge in petrochemical subsidies, raw material costs were reduced, making plastics cheaper and more ubiquitously used in packaging, textiles, and household items.
1980s: The use of plastic continues to increase dramatically, supported by federal tax policies favoring fossil fuels and petrochemicals. Subsidies like the master limited partnership (MLP) tax exemption allow fossil fuel companies and petrochemical companies to avoid corporate income taxes, facilitating capital for expansion.
1990s: Environmental concerns about plastic pollution rise, though plastics production continues to grow due to plastic’s low cost and versatility to produce consumer goods and packaging. Pollution of single-use plastics and microplastics in oceans first garners public attention with Captain Charles Moore’s discovery of the Great Pacific Garbage Patch.
2004: Researchers first coined the term “microplastics” in a paper published in the journal Science, though scientists first detected plastic particles in the environment in the 1960s.
2018: A small study in Austria finds microplastics in human stool samples from people across multiple continents, suggesting that microplastics are entering the human digestive system through food and water.
2019: A groundbreaking study estimates that humans could be ingesting up to a credit card’s worth of plastic per week through microplastics in food, water, and air.
2020–2024: Studies find microplastics in human organs, including lungs, kidneys, and liver, sparking further research on the health implications of long-term exposure to microplastics.
2024: The Environmental Integrity Project (EIP) documents frequent pollution violations by U.S. plastic production facilities, highlighting that over 80% of new or expanded plastics plants have committed air pollution violations, disproportionately impacting communities of color and low-income populations near petrochemical plants. Residents report higher rates of respiratory issues, cancer, and other health concerns associated with exposure to benzene, nitrogen oxides, and other harmful pollutants.
2024: Scientific consensus warns that the entire plastics pipeline, from extraction of fossil fuels, through plastic production, use, and disposal, microplastics releases plastic particles and chemicals that may disrupt hormone endocrine functions, immune response, and lung health, among other health hazards, intensifying regulatory scrutiny. Communities near fossil fuel and plastics production facilities continue to advocate for stricter pollution controls to reduce local health risks.
Subsidize Solutions to Solve Plastic Pollution

To solve plastic pollution and end its harm to people and the environment, we need to replace our current exploitative, polluting economy with one that is more sustainable. In order to create a just transition to a sustainable economy, we must redirect subsidies from fossil fuels to renewable energy, sustainable and truly compostable materials, reuse systems, and environmental justice initiatives. This transition must also address the needs of workers in fossil fuel-dependent industries by providing retraining and job creation programs.
Subsidy reform offers us a chance to align energy and materials policies with climate goals, community health, justice, and sustainability. Shifting subsidies toward renewables and reusables while requiring a downshift in fossil fuel, petrochemical, and plastic production can limit global warming to 1.5°C, as outlined in the Paris Agreement. It can also boost the effectiveness of extended producer responsibility (EPR) laws, leveling the playing field for sustainable plastic-free materials and fostering a circular economy.
Moving Forward

To create meaningful change, we need collective action and accountability. This means demanding our leaders prioritize clean energy, safe materials, public health, and environmental justice by reforming subsidies that perpetuate reliance on harmful industries.
Additional Resources
- Plastic Money: Turning Off the Subsidies Tap
- Billions in Taxpayer Subsidies to U.S. Plastics Plants Support Illegal Air Pollution in Communities of Color
- Tackling Subsidies for Plastic Production: Key Considerations for the Plastics Treaty Negotiations
- Your tax dollars may be funding the expansion of the plastics industry
- How the US FF Industry Depends on Subsidies and Climate Denial