Plastic Credits: How It Works And Who It Impacts

Plastic offset is here

Plastic bottle in the ocean

A new paradigm is entering the environmental zeitgeist, and that paradigm is plastic credits. So what is it really, and how could it stem the global tide of plastic pollution?

Put simply, for every dollar contributed by a polluter, a certain amount of plastic waste would be intercepted from the environment on your behalf as an individual or a company.

All across the developing world, waste management social enterprises have popped up to provide ethical & efficient solutions to our plastic epidemic, yet they are often underfunded and left unable to scale. Inspired by carbon credit, plastic offset is a transformative way of funding these innovations to accelerate our transition towards a circular economy.

Just like carbon, there are as many ways to do plastic credits wrong as ways to do it right. With the complex relationship between consumer responsibility and producer accountability, generating truly meaningful impact is challenging yet entirely possible. From the landfills and alleyways of Mumbai to corporate headquarters in New York, we spent years understanding both local needs and the global systems that govern our waste. Here are 3 principles we have distilled on how to do plastic offset, right.

Principle 1: Hit The Problem Where It Hurts

A low value plastic bag with other plastic items in it

Anywhere in the developing world, if you pay attention to the kinds of plastic that are actually littering our streets, beaches, and landfills, you will notice a trend – it’s dominated by low-value plastic like to-go containers, candy wrappers, and plastic bags.

These materials are classified as low-value plastic because they are extremely difficult to recycle. Shanghai, Cairo, New Delhi, Nairobi, Jakarta – a vibrant informal recycling industry do exist in cities worldwide and employs tens of millions of workers who form the backbone of the local waste management infrastructure. Unlike the high-value materials (PET, HDPE) with an established recycling supply chain, low-value plastic is not even collected by these workers because it inherently lacks any financial value. As a result, they have become the most commonly found items degrading in and polluting our environment.

At rePurpose Global, we believe that the most genuine way to compensate for your plastic footprint is to deal with plastic that would have otherwise never been recycled. Offsetting via plastic credits through the recycling of high-value plastics like PET is not a good practice because it offers marginal environmental additionality: by nature of their high value, these materials would have likely been picked up and recycled anyway by workers in the informal industry.

Instead, through your plastic credit contribution, we put a price on low-value plastic and pay informal workers to intercept it before it reaches the oceans or landfills, adding a crucial income stream for these marginalized workers in addition to their work with materials like PET and HDPE.

After the plastic is collected, we either use it to make bricks and roads or co-process it through pyrolysis, a practice that uses low-value plastics as an energy source in industries that typically burn coal to meet their high energy demands (e.g. cement kilns). Through this process, low-value plastics kick out coal and are cleanly incinerated. We know this system is not perfect: however, given the extremely low value of these materials, the high costs to separate them, and the lack of technology to recover them, co-processing is the best solution for these plastics that would have otherwise been landfilled or flushed into oceans.

Principle 2: Creating a Democratic, Trustworthy Ecosystem

A food waste only bin

A best practice from the established carbon credit space is where offset providers work with local organizations to implement the offset as opposed to developing their own operations. This practice makes sense for plastic credits for three reasons:

  1. Local waste management initiatives have an established history and expertise in their work, and we should engage and empower existing efforts to deliver impact effectively.
  2. It boosts cost-effectiveness as offset implementers and offset providers can focus on their own functions while working together. Collaborating as opposed to competing strengthens the impact and furthers our shared mission.
  3. Working through partners allows for a third-party like the offset provider to monitor & evaluate operations through rigorous standards of measurement, enabling transparent communication of impact to the individual or organization going Plastic Neutral.

At rePurpose Global, we work with three vetted waste management social enterprises in Mumbai, Bangalore, and Hyderabad with a proven track record of combating plastic pollution and transitioning urban India towards a circular economy. Any foreign intermediary may understand needs on the ground through extensive research, but having witnessed the complexities of waste management in Asia first-hand, we realized that our impact is best achieved with local partners who have been doing waste management for years, if not decades.

Principle 3: It’s About The People Behind The Plastic Too

Waste pickers in India

For more than 25 years, rich Western countries like the US, Canada, and the UK have shipped their plastic waste to poorer Asian countries who struggle to even handle their own waste simply because the economics of recycling their own citizens’ garbage do not make sense at home. After China, which used to take in two-thirds of the world’s plastic waste banned all new imports at the end of 2017, more waste has been diverted to countries like India, Thailand, and Malaysia with much more informal waste management systems.

So it’s no longer just about the plastic – it’s about the people and communities it’s impacting too. Over 50 million informal workers worldwide spend their entire lives dealing with the consequences of our mindless consumption, all without recognition as environmental heroes or access to basic healthcare or education that traps them in a generational cycle of abject poverty. In India, a waste picker on average spends 12 hours a day scavenging for recyclable waste in dumpsters and landfills, earning less than $5 from an exploitative supply chain.

We believe that any plastic credit should actively engage with and explicitly empower informal waste workers. At rePurpose Global, an offset or credit supports dedicated impact programs co-created with each Plastic Neutral partner, helping them empower workers. By transitioning scavengers into the formal sector, we ensure dignified jobs (tackling social stigmatization), fair wages and benefits (to prevent volatility in incomes and provide a social safety net), and safe conditions (regulated facilities with safety equipment as opposed to manually scavenging in landfills). In addition, we help provide savings accounts, health insurance, and education subsidies for the workers’ children in order to break the cycle of poverty.

Today, the negative consequences of plastic pollution extend beyond the environment to the people who receive the bulk of the world’s garbage burden. Therefore, plastic credit programs must be socially impactful to effectively neutralize the perils of plastic pollution.

Plastic credit: Funding Our World’s Transition Towards a Circular Economy

A plastic bag with the words 'Thank You' on it stuck on criss-cross metal net

Even though plastic credits are a fairly new concept, conscious consumers and forward-thinking businesses worldwide are already adopting the platform. However, we should carefully guide the use of credits to avoid greenwashing. For example, brands that use plastic offsetting as a PR bandaid to their own degradative practices should never be permissible.

However, we believe that plastic credit has the potential to solve the larger systemic issue at play, a linear economy that has created an unchecked system of production and consumption. We have started with recycling social enterprises where we can easily verify the amount of waste taken out of the environment & sell that credit to consumers and companies, but we also realize that recycling is only a band-aid solution.

We are now working towards using our proven methodology of plastic credit financing to fund experimental innovations that replace and redesign out plastic all together. Simply put, for every kg of plastic an innovation is able to tangibly replace out of a manufacturing supply chain, one credit can be generated and sold to the public to further fund scaling up the innovation.

Plastic credits can be a powerful tool to mobilize resources for solving the environmental and social crises caused by plastic pollution. Make sure to do it right, however, by ensuring your offset meets the principles listed above. Together, we can reduce waste, revive lives, and restore nature’s balance – join us and go Plastic Neutral, today!

Found this article informative? Read more about our toxic relationship with plastic here. You can also help sponsor a vetted recycling initiative to remove as much plastic as you use by going Plastic Neutral with us. Every step counts, make sure you take yours today.

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