Plastic credit schemes aim to redirect funds to projects and organisations which collect, recycle and manage plastic waste and are particularly prevalent in low- and middle-income countries.
The schemes typically work by issuing sellable plastic credits in relation to the amount of waste collected, recycled and managed. The schemes tend to be voluntary but occasionally form part of producer responsibility regulation.
However, the study identified that where a buyer for the credit can be found, the price paid does not necessarily cover the costs of the underlying waste management activity.
The schemes have become particularly topical due to the ongoing United Nations Plastics Treaty negotiations. The final round of negotiations (INC-5) will begin on 25 November 2024 in Busan, South Korea.
The negotiations were set up in an attempt to create a legally binding worldwide treaty to eliminate plastic pollution by 2040.
Chris Sherrington, head of environmental policy and economics and project director at Eunomia, commented: “In the run up to INC-5, any claims by proponents of plastic credits about the role they might play in treaty implementation deserve careful scrutiny.
“Waste management has to function as a system. It needs costs to be covered (net of material revenues), a clear view as to how the system can grow and improve performance over time, and co-ordination in terms of the strategic development of facilities. To attract investment, there needs to be a reliable counterparty. EPR schemes based on cost recovery can meet all of these requirements, credit schemes do not.”
Areas of concern with plastic credit schemes
The report identified several areas of concern in relation to plastic credit schemes as a substitute for EPR schemes.
Firstly, Eunomia found that the schemes often make the assumption that projects and organisations choose to handle plastic waste due to the incentivisation of the credits. In reality, many have been operational for longer than the plastic credit schemes have existed. The lack of a guaranteed purchase means that many of these organisations will not sell on their credits and will continue with a “business as usual” approach.
Following on from this, as the cost of the credits relies on principles of supply and demand it does not constitute a reliable source of income for waste management projects.
Finally, the environmental consultancy warned that terms used in relation to the schemes such as “plastic offsets” and “plastic neutrality” are misleading to consumers and do not accurately describe the actual benefits of plastic credits. They result in potential “greenwashing” from producers as neither claim would be true even if the scheme was to function perfectly.
The research concluded with a series of recommendations to policy makers, those operating credit schemes and potential buyers of plastic credits. Download the full report here.
The study was conducted on behalf of nature conservation charity Fauna & Flora and is based on desk-based research and interviews.
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