Global Plastics Treaty Negotiations: Production Cap Disputes Continue After Nairobi Meeting

Market Overview

The Intergovernmental Negotiating Committee (INC), led by the United Nations Environment Programme (UNEP), has continued negotiations toward a legally binding international treaty on plastic pollution. However, both INC-5, held in Busan in November 2024, and the resumed INC-5.2 session, held in Geneva in August 2025, failed to reach a final agreement. As a result, the negotiation process has effectively entered a deadlock.

Following this, the INC Chair’s Bureau prepared a roadmap to restart the negotiation process. As part of this effort, an informal in-person meeting of Heads of Delegation was held from June 30 to July 3, 2026, at the United Nations Office in Nairobi, Kenya. The purpose of this meeting was not to present a new treaty text, but to prepare an informal reference document identifying areas of convergence and divergence across key negotiation issues.

References: IISD — INC-5.3 explainer

References: UNEP — Intergovernmental Negotiating Committee on Plastic Pollution

1. Negotiation Roadmap and Upcoming Schedule

Following the Nairobi meeting, a second informal in-person meeting is scheduled to take place in Bangkok, Thailand, from September 27 to 30. In the meantime, Heads of Delegation-level virtual meetings will be held every four to six weeks. The next formal negotiation session, INC-5.4, is expected to take place in late 2026 or early 2027 and is likely to last more than 10 days.

Reference: Foresight — Plastic Pollution Treaty Roadmap

2. Key Issue: Disagreement Over Production Caps

The most contentious issue in the negotiations is whether primary plastic production itself should be included as a regulatory target under the treaty.

The High Ambition Coalition, which includes the European Union and several Latin American, African, and Pacific island countries, argues that the treaty should include provisions to limit plastic production to a “sustainable level.”

In contrast, the like-minded group, led by countries with large petrochemical production bases such as China, Russia, Saudi Arabia, and Iran, maintains that the treaty should focus on waste management and recycling rather than production restrictions.

There are also ongoing disagreements between the two groups over whether chemicals of concern and specific polymers, such as PVC, should be subject to regulation.

Reference: Chemistry World — production caps and harmful chemicals

3. Response from the Petrochemical Industry

Major global petrochemical companies have continued to expand production capacity during the treaty negotiation process. Seven companies — Dow, ExxonMobil, BASF, Chevron Phillips, Shell, SABIC, and INEOS — have collectively increased their plastic production capacity by 1.4 million tons since the negotiations began. These companies have also reportedly sent lobbyists to the negotiations to oppose provisions related to production restrictions.

Reference: Cambridge Prisms: Plastics — petrochemical historical bloc

4. Implications for Korea’s Petrochemical and Packaging Industries

Korea is the world’s fourth-largest plastic producer, with annual production of approximately 20 million tons. Its petrochemical product exports were valued at around USD 42 billion in 2023. As about 60% of Korea’s domestic production is exported, the inclusion of legally binding production reduction provisions in the treaty could directly affect exports of polymers and packaging raw materials.

Although Korea is listed as a member of the High Ambition Coalition, it has maintained what some observers describe as an ambiguous position. Considering the importance of its domestic petrochemical industry, Korea has not clearly joined initiatives such as the Panama Declaration, which explicitly supports production reduction measures.

Reference: Cambridge Prisms: Plastics — Korea's ambiguous ambition

5. Trade and Supply Chain Implications

If the final treaty includes restrictions on total production volume, this could lead to discussions on country-level production quotas for general-purpose resins such as polyethylene and polypropylene.

If specific polymers are included in the list of chemicals or materials of concern, import and export requirements for packaging materials using those substances may become stricter.

Even while treaty negotiations continue to be delayed, individual countries are separately strengthening regulations such as Extended Producer Responsibility (EPR) schemes and mandatory recycling requirements. Therefore, companies need to monitor both international treaty developments and country-level regulations in parallel.

As the next formal negotiation session, INC-5.4, is expected to take place in late 2026 or early 2027, it will be important to follow informal discussions, including the upcoming Bangkok meeting, to assess whether progress is being made on each key issue.