Written by: Maurel DAYINTA
Verified by: Albert SUTANTO
Plastic Waste Crisis
As one of the most widely used material, plastic plays a significant role in our daily life as well as industries. Its role in packaging and manufacturing makes it a vital material in many business operations. However, despite its massive contribution to human life, the drawback caused by the waste generated from plastic are not a simple matter. According to global statistics, the OECD’s Global Plastics Outlook, over 300 million tons of plastic waste are generated annually, with less than 10% being recycled. The growing challenge of plastic waste is no longer just a societal issue but also a critical responsibility for companies striving to enhance their sustainability and reduce their environmental footprint.
Governments, corporations, and environmental advocates are seeking innovative solutions to address this crisis. Among these efforts, the concept of plastic credit is emerging as a notable approach to combat plastic pollution and promote accountability.
What is Plastic Credit?
As defined by the World Wildlife Fund (WWF), Plastic credit represents as a transferable unit of a specific quantity (mostly 1m2 tonne) of plastic that has been prevented from entering the environment through collection and or recycling.
Plastic credits scheme are inspired from the 1997 Kyoto Protocol which function similarly to carbon credits. While carbon credits enable organizations to offset greenhouse gas emissions through investments in renewable energy or reforestation, plastic credits specifically focus on waste recovery and recycling efforts and allowing companies or organizations to offset their plastic footprint. This can be achieved by funding waste management initiatives aimed at reducing plastic waste.
In order to ensure that the credits accurately reflect meaningful contribution to plastic waste reduction, certain quality assurance principles must be met. Plastic program quality assurance principles ensure all plastic credits represent collected and/or recycled plastic waste that is real, additional (meaning it would not have been collected or recycled without the project), and measurable. This distinction underscores their direct focus on mitigating plastic pollutionrather than addressing emissions reduction.
How Plastic Credit Works
Plastic credit program typically starts by establishing standards that outline the types of plastic materials, methodologies, and processing for issuing credits.
The implementation methodology of plastic credit systems is underpinned by globally recognized standards and distinguished into two types, known as the Plastic Waste Collection (WCC) Standard and the Plastic Waste Recycling Standard (WRC).
Plastic Waste Collection Standard (WCC)
Referring from the PWRM0001 by Verra, Plastic Waste Collection enables organizations to generate plastic credits by quantifying and verifying additional plastic waste collected beyond a baseline scenario. To assess the amount of plastic waste beyond recovery and recycling, this standard incorporates social dimensions such as fair compensation and improved working conditions for waste collectors. Plastic waste that is successfully being collected and prevented to be leakage to the environment will obtain a Waste Collection Credits (WCCs).
Plastic Waste Recycling Standard (WRC)
Referring to the PWRM0002 standard by Verra, Plastic Waste Recycling enables organizations to generate plastic credits by quantifying and verifying the amount of plastic waste successfully recycled beyond a baseline scenario. This standard focuses on the recycling process, ensuring that the collected plastic waste is properly processed and transformed into valuable materials which could be utilized as a way to reduce the utilization of virgin plastic. Plastic waste that is successfully recycled and diverted from the environment will earn Recycling Credits (WRCs).
Once projects are developed, operations for collecting and recycling plastic waste are carried out under oversight from relevant stakeholders. Validation processes will ensures that project activities comply with the established standards, resulting in the certification or issuance of plastic credits. These credits will provide a tonne-for-tonne offset for plastic production or waste generation, which also guarantee that plastic waste is prevented from entering oceans, instead redirected into recycling systems.
Plastic credits offer companies a mechanism to take responsibility for their environmental impact while driving investments in waste recovery infrastructure and recycling technologies. Importantly, it aligns with Extended Producer Responsibility (EPR) policies, which enabling companies to meet their EPR obligations by purchasing credits that reflect their plastic usage. According to Verra, several organizations have reportedly claimed for plastic credits, with some reaching the stage of retirement beneficiary, where the credits are officially accounted for. It ranges from luxury automotive manufacturers, such as Bentley Motors, to cosmetic companies like Clarins. Those participation highlights the growing adoption of plastic credits across diverse industries, which demonstrate the credibility of this system in combating plastic pollution.
By investing in plastic credits, companies can assume responsibility for their environmental impact, support sustainable waste management practices, and drive innovation in recycling technologies. However, while effective in the short term, offsetting alone cannot achieve lasting change. To create a sustainable future, companies must complement plastic credits with a holistic approach that prioritizes reducing plastic consumption, rethinking product design, and adopting sustainable materials.
At Mt. Stonegate Green Asset Management, we bring a strong foundation in carbon market expertise and a commitment to expanding sustainable practices, including plastic credit systems. Get in touch with us to explore how we can assist your business embrace a sustainable future and drive meaningful environmental impact.
References:
Arma Law. (2024). Exploring plastic credits: Developing a strategy and legal framework for sustainable waste management in Indonesia. https://www.arma-law.com/news-event/newsflash/exploring-plastic-credits-developing-a-strategy-and-legal-framework-for-sustainable-waste-management-in-indonesia#fnref5
Green Earth. (2023). The ultimate guide to plastic credits. https://www.green.earth/blog/the-ultimate-guide-to-plastic-credits
Prevent Waste Alliance. Discussion Paper Plastic Credit Schemes and EPR – risks and opportunities. https://prevent-waste.net/wp-content/uploads/2023/05/PREVENT_Discussion-Paper_Plastic-credit-schemes-and-EPR.pdf
Statista. (2023). Global plastic waste generation outlook by application. https://www.statista.com/statistics/1339200/global-plastic-waste-generation-outlook-by-application/
Verra. (2022). Plastic waste collection methodology (PWRM0001), version 1.1. https://verra.org/methodologies/pwrm0001-plastic-waste-collection-methodology-v1-1/
Verra. (2022). Plastic waste recycling methodology (PWRM0002), version 1.1.https://verra.org/methodologies/pwrm0002-plastic-waste-recycling-methodology-v1-1/
World Wildlife Fund. (2021). WWF position paper: Plastic crediting and plastic neutrality.https://files.worldwildlife.org/wwfcmsprod/files/Publication/file/3gdsnjoy2_newWWF_Position_on_Plastic_Crediting_and_Plastic_Neutrality_.pdf
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