There is a big discussion happening right now regarding the plastic waste crisis and the emerging plastic credit market. It has become clear that the current efforts and funding from government and philanthropy cannot match the scale of the World’s plastic waste problem. The plastic credit mechanism will bring private sector capital to help scale recovery and recycling efforts, which should have an immediate impact on the crisis. There are many questions being asked about this programme. How do these credits work? What are the risks and benefits? Is it right for our company? This article will explain how a plastic credit is generated and verified, what benefits can be brought to your company, and whether this can be a permanent fix for plastic waste.
What is a Plastic Credit?
A plastic credit is an environmental commodity that represents the collection or recycling of one tonne of plastic material, which can be transferred between organizations. Credits are created when one entity, often referred to as the project developer, voluntarily implements practices that collect or recycle plastic waste. The recoveries generated can then be claimed by another entity. Without these projects, this plastic would not be removed from the environment, nor would it re-enter a production stream that uses recycled plastic.
Companies who purchase plastic credits can use them to address a portion of their plastic footprint while supporting plastic waste recovery efforts. This allows them to offset plastic in their business against the recovery of plastic waste in the environment or recycling it into a production loop.
Most plastic credit projects also address other interrelated problems, such as: ecosystem degradation, inadequate waste management, environmental justice, biodiversity loss, human health, and economic risks. These projects also typically support a menu of UN Sustainable Development Goals, including No Poverty, Decent Work and Economic Growth, Industry Innovations and Infrastructure, Sustainable Cities and Communities, Climate Action, Life Below Water, and Partnerships for Goals.
In creating and issuing plastic credits, there should be rigorous processes in place and a standard to work from that is independent of the actual project to ensure that the plastic recovery and recycling is:
Additional - recovery or recycling that otherwise would not occur,
- Approved and individually-tracked on an independent protocol registry, such as Verra or the Ocean Bound Plastic Certification,
- Third-party audited & verified,
- Measured, recorded & tracked, and
- Assessed & documented for project social & environmental co-benefits.
“Using a public, independent, third-party verified standard means that all actors (the standard owner, the certification company, and the project issuing the credits) are distinct, non-related organizations, and that all information is publicly available,” says Adriana Amico, Co-founder of Zero Plastic Oceans. “This guarantees total transparency, absence of conflict of interest, and certainty of compliance.”
Plastic credits are tradable instruments and, once issued, prices are set and then change through demand and supply forces. A project that provides greater direct environmental benefits should be valued higher than a credit coming from a lower impact source. Some of these projects have allowed local women to become leaders in their community and own their own businesses, all while providing education on waste management. These operations should not exploit labour but, rather, help those affected by plastic waste, which is often generated from developed countries yet finds its way to more impoverished communities, who likely did not create the material in the first place.
There are different types of projects that can generate plastic credits. Some examples are:
- Coastal and waterway debris removal by hand,
- Open ocean collection by boat,
- Debris traps set in rivers,
- Microplastic filtration collection, and
- Recycling materials collected from the natural environment, post-consumer & industrial waste, urban dumping, and unmanaged landfills.
There are a lot of factors that determine the pricing of plastic credits. For instance, higher costs in the recovery of plastic from the ocean compared to the picking of plastic waste from landfills will be reflected in the pricing of those credits. To some buyers, credits from a specific geography, polymer, or source that aligns with a company's operations are worth a premium. Meanwhile, projects that support more social progress in health, equality, employment, and environmental justice should have these attributes valued in the price of the credit. Likewise, projects that pay workers a higher standard wage or provide healthcare benefits should reflect that added value.