A) They originally seemed Comparison to what?
B) they seemed originally Originally modifies seemed, so "originally" should precede "seemed"
C) it seemed that they would originally Originally modifies seemed, so "originally" should precede "seemed"
D) it originally seemed Comparison to what?
E) it originally seemed they wouldCorrect. "It" is an expletive and does not need to refer to a noun. "It" is not preferred, but grammatically correct (similar to choosing a somewhat wordy but grammatically correct answer when the other answer choices have errors).
"They" is correct - "they" refers to plastics.
"Would" is used as an uncertainty - what originally was thought
would occur in the present as a hypothetical. What follows after "would" refers to the time of deterioration
in the hypothetical present at the exact same time as what is actually happening now. So, "would" is necessary, otherwise you'd be comparing two events that are
actually happening now, instead of one actual and one hypothetical event. Nothing follows "would" because it's sort of like the structure of "Mike is taller than Brent is (tall)." It's not incorrect to add the parallel after "would" (e.g. take) but it's less concise and unnecessary to do so.