Plastic Credits and Extended Producer Responsibility

Photo by rePurpose Global, Inc. Project Hara Kal Recovery of Ocean and Nature Bound Plastic from Villages in Kerala, India (Verra Project 3744).

Plastic pollution continues to grow at an alarming rate. Despite efforts to reduce plastic use, demand is projected to increase by 30% over the next 25 years, with plastic waste expected to triple to 1.3 billion tonnes by 2060. This poses a mounting threat to ecosystems, economies, and communities around the world.

Extended producer responsibility (EPR) is a policy approach designed to hold producers responsible for the environmental impacts of their products. It shifts the financial and operational responsibility of waste management from local governments to producers. When well-designed and appropriately implemented, EPR systems can help drive systemic change in the life cycle of plastics.

However, implementing EPR effectively especially in emerging markets and developing economies (EMDEs) presents challenges, including underdeveloped waste systems, limited financing, weak regulatory capacity, and the risk of exclusion of informal waste workers who are central to current systems.

Plastic Credits issued by Verra’s Plastic Program offer a results-based financing mechanism that can support EPR implementation by complementing their key functions (e.g., filling certain administrative gaps). They enable public and private sector actors to invest in projects that verifiably collect or recycle plastic waste, helping bridge the funding gap, strengthen operational capacity, and support inclusive plastic waste management systems.

Discussion Paper

A discussion paper by Verra’s Plastic Waste Reduction Standard Program explains in detail how high-integrity Plastic Credits can support the design and implementation of Extended Producer Responsibility (EPR) systems worldwide.

Verra’s Plastic Credits provide a results-based financing mechanism that channels investment into verified plastic collection and recycling projects. These credits can be leveraged by governments, producers, and waste management operators to do the following:

Strengthen administration of EPR systems by supporting governments in adopting transparent monitoring, reporting, and verification frameworks, thereby enhancing accountability, streamlining compliance processes, and promoting best practices
Enable finance for plastic waste sector development through a results-based mechanism and ensuring the efficient use of financial contributions toward high-quality projects
Boost operations of the plastic waste sector through demonstrating their adherence to social and environmental safeguards while showcasing best practices for operational due diligence and impact measurement

Enable Financing	Boost Operations	Strengthen Administration
Access: Open access registry increases project visibility and facilitates connection with potential investors	Coverage: Scale capacity and/or investible infrastructure essential to fulfill EPR obligations and expand services to new areas and materials	Record keeping Provide frameworks and digital infrastructure for tracking progress and producer’s financial contribution
Security: De-risk investments into high quality collection and recycling operations with globally recognized standard	Standards: Provide uniformed Monitoring, Reporting and Verification framework for operational due diligence	Safeguards: Demonstrate best practice standards for environmental and social protection
Contributors: Mobilize new funding sources beyond judicial limits of EPR	Impact: Drive measurable outcomes and prioritize results	Transparency: Ensure publicly accessible data frameworks for verifying compliance

This paper presents six country case studies (Ghana, Indonesia, Kenya, Vietnam, Chile, and the Netherlands), which are in different phases of EPR development—Initiation, Transition, and Maturity.

In each phase, Plastic Credits are shown to offer distinct benefits:

In the initiation phase, Plastic Credits can be leveraged to demonstrate best practices of the waste management sector and fill data and administrative capacity gaps in tracking EPR implementation progress.

In the transition phase, Plastic Credits can help bolster EPR performance, de-risk investment, and facilitate results-based compliance of obligated entities.

In the maturity phase, they can be leveraged to promote innovation in the waste sector, help expand waste services in underserved geographies, and improve material coverage and system transparency of EPR.

The paper also offers tailored recommendations for governments, producers, and waste management operators on how to effectively leverage the Plastic Program for a more efficient and inclusive EPR system. While emphasizing how Plastic Credits can support EPR systems by filling critical gaps in these systems, this paper acknowledges that their effectiveness depends on appropriate integration, robust governance, and continued alignment with EPR objectives. It concludes by encouraging stakeholders to consider Plastic Credits as part of a broader suite of tools needed to scale effective, inclusive, and high-functioning plastic waste management systems globally.

Download the executive summary (PDF)

Download the full paper (PDF)

Webinar

Prior to the paper’s publication, Verra’s Plastic Program team hosted a webinar to preview its key findings. The webinar also featured a keynote address on the importance of innovative finance, delivered by Roger Joseph (Rocky) Guzman, international governance, legal, and policy specialist at the Asian Development Bank.

Watch the webinar recording

Download the slide deck (PDF)