In defense of plastic credits: South Pole flags transitional value for circular economy amid greenwashing fears

11 Jan 2023 --- Plastic credits have been dismissed by some NGOs and multinationals as a greenwashing mechanism that distracts from plastic reduction and exacerbates “waste colonialism.” However, environmental consultancy South Pole, which offers a certified plastic credit program, has hit back at critics, claiming that closely regulated systems can support the transition to a circular economy by directing much-needed finance to sustainability projects. 

So-called plastic credits are commonly defined as a certificate representing the environmental service of one metric ton of plastic waste removed from the environment or recycled.

A Plastic Planet’s co-founder Sian Sutherland has dismissed plastic credits as “a band-aid solution” that “kick the plastic waste problem down the road,” but South Pole’s practice lead for circular economy Irene Hofmeijer says a more pertinent question should be asked: “How can we incentivize investments into building a circular economy globally?”

“A verified plastic credit should not be seen as an offset but rather as an investment in the circular economy transition – one that will help us move away from our predominant infrastructure of linear designs and unnecessary plastics,” she tells PackagingInsights.

“So while reduction and redesign always come first, investments via plastic credits can be a part of the longer-term strategy to combat plastic pollution. Furthermore, corporate investments into plastic credits also help put a price on companies’ plastic pollution – now they have a cost associated with their plastic waste.”

Sutherland remains unconvinced. If plastic credits are not a form of “offset,” then they require a different name, she responds. “Regardless, I fear that a plastic credit scheme is ripe for misuse and will inevitably be used as a marketing exercise by many. The principles of ‘credits’ simply offset responsibility for reducing plastic at source,” she adds.Hofmeijer maintains that plastic credits can be pivotal in funneling finance to the bourgeoning circular economy.

Governance and deception
South Pole recognizes that without a universal governance system reviewing how plastic credits are used, there is always a risk of them being used as a greenwashing tool. The consultancy is actively working with practitioners in the field to strengthen guidelines and standards for plastic credits, including certifying projects under the Verra Plastic Program.

“We also advise companies on their materials and waste strategies and, in that way, investments in plastic credits are part of a broader, ambitious strategy rather than a one-off offsetting action,” explains Hofmeijer.

“Plastic credits as a transition mechanism can channel much-needed finance to projects that help to build the conditions for a circular economy. This system means that the use of plastic credits, as a financial mechanism enabling companies to finance activities beyond their own value chain, should be reduced over time as the total waste generated gets reduced.”

For Edward Kosior, founder and CEO of Nextloopp – a recycling initiative pioneering a circular economy for food-grade PP – the concept of plastic credits should be seen as a positive development, provided there is a governance system that eliminates greenwashing.

“That said, plastic credits should not be seen as a way of continuing any negative behavior, which could be readily changed by a more fundamental and permanent revision to the negative behavior,” he tells us.

However, Sutherland maintains that this “negative behavior” is ultimately the production of plastic and society’s “fundamental misuse of this incredible but toxic and indestructible material.” “Any attempt to jam plastic into a ‘circular economy’ is short-termist and extends our dependence on fossil fuels. We need to stop believing in recycling fairies,” she says.

According to a recent OECD report, the world is producing twice as much plastic waste as two decades ago, with the bulk of it ending up in landfill, incinerated or leaking into the environment. Only 9% is successfully recycled, the report claims.Critics are concerned plastic credits enable companies to pollute one region of the world while cleaning up another.

Credits where due
In our recent coverage of plastic credits following the Sea of Solutions 2022 event, Marian Ledesma, a zero waste campaigner for Greenpeace Philippines, warned that such systems could worsen “waste colonialism” because associated projects do not address the impacts felt by plastic pollution in one area if offsetting projects occur elsewhere.

Likewise, Russel Mahoney, VP of public affairs for communication and sustainability at Coca-Cola, illustrated: “The reality is that we want to be able to collect and recycle in every market we operate in. The idea that you might not do something in one market and make up for it in another is not attractive to us – certainly not to the people we might be leaving out as part of that process.”

“We agree with this sentiment,” says Hofmeijer at South Pole, “as plastic waste management is a very regional affair. So if a company has a plastic waste footprint in Kenya, it should ideally finance waste management infrastructure in East Africa, otherwise, it is not the transition intervention we are looking for.”

However, she points out that sometimes companies, organizations, foundations or individuals want to finance projects in a region unrelated to their own footprint because projects are not available in their region or the selected project aligns more directly with their impact ambitions or purpose.

“While our advice is to always prioritize regional efforts and projects, we also support investments into projects in other regions as a provisional action, but communicated in a clear and transparent way,” she adds.

Through its engagement with the 3R Initiative, South Pole has worked to establish rules for using plastic credits in the 3RI Guidelines for Corporate Plastic Stewardship, which provides best practice guidance for companies on how to credibly and measurably manage their plastic footprint, but also accurately communicate their activities.While some believe plastic credits can spur circularity, a cultural shift away from disposable products remains essential.

Circling forward
The plastic credit market is in the early stages of development, with variations between the types of credits and project accounting standards available. There are also key questions around plastic credits that still need to be answered, including ways to avoid perverse incentives from the use of plastic credits.

Here, the development of national and regional legislation around plastic waste, such as Extended Producer Responsibility schemes, may provide a governance structure to address these questions, says Hofmeijer.

“Ultimately, financing infrastructure for the circular economy – via credits or other means – is an important element of a company’s sustainability strategy. So when used in combination with the needed reduction and redesign, it is one part of a long-term strategy, rather than a ‘band-aid,’” she explains.

Like Hofmeijer, Kosior at Nextloopp highlights that the transition to a circular economy most heavily relies on a radical redesign of everyday products.

“In typical consumer packaging, products need to be better designed for reduction, reuse and recycling, starting with the materials selected, pigments used, labels and adhesives and printing ink. Many of these aspects are totally ignored in current products and single-use design dominates,” he elaborates.

“One of the global problems is that many organizations are change-resistant and wish to keep old products without modification to any aspects of their product.”

By Joshua Poole