Panel discussion: Innovative financing mechanisms – plastic credits for inclusive and transparent circularity

11 Nov 2021
Eliminating Plastic Waste

There is a growing movement toward increasing plastic recycling rates, in particular by consumer goods companies who are facing intense pressure to reduce the environmental impact of their waste packaging. A variety of measures are being explored, including reduction of packaging, increased recycled and recyclable content of packaging, the use of biodegradable material, packaging return schemes, etc. While the combination of these measures has the potential to significantly reduce waste pollution, companies are still faced with the problem of ensuring the adequate disposal and recycling of the products after they are sold to consumers. In response to this situation, there is a growing movement to develop and promote the use of ‘plastic credits' to drive funding for waste recovery and recycling in countries without EPR obligations. Plastic credits enable companies to provide performance-based payments for environmental services of circularity, a market tool for buyers and sellers of the environmental services related to the collection (recovery), sorting and appropriate destination of recyclable waste materials. A plastic credit represents the service of recovery (collection, sorting) and appropriate destination (if possible, recycling) of a given amount of waste material that is inappropriately discarded, causing pollution of the natural environment. The destination of recovered material varies depending on the circumstance of the project or operation and the availability of economically viable options. In some cases, it may be a recycling plant; in others, where this option is not available, it could be the next best alternative available. This presentation will focus on the Prevent Plastics Credits Project developed by a consortium of organizations involved in the Prevent Waste Alliance (BVRio, Nielsen, Yunus Environment Hub, Repurpose, Wuppertal Institute, Black Forest Solutions, Cirplus and local partners in Brazil, Vietnam, India and Mexico). The project aims at developing, testing and demonstrating four different and complementary components that integrate a robust plastics credit system that can be adopted to support inclusive circularity projects anywhere in the world. 1) Development of ValuCred, a process standard for transparent calculation, verification and validation of plastic credits for the benefit of the informal sector; 2) Technical evaluation of the environmental impact (EIA) of plastic credit projects to develop benchmarks; 3) Supporting local collectors/recyclers to market their physical recyclable materials through the Cirplus global recyclable materials marketplace; 4) Piloting the use of the Circular Action Hub as a trading platform for plastic credits, to provide performance-related payments for environmental services provided by the project.