We are in the midst of a plastic crisis.
Every year, 350 million tonnes of plastic waste is generated, only a fraction of which is collected and recycled. In addition, despite an increasing number of voluntary corporate pledges and regulatory pressure, more single-use plastic waste is being generated than ever before. The Breaking the Plastic Wave report estimates that by 2040, there will be a $40 billion funding gap to finance the collection and management of municipal plastic waste.
Without the mobilization of capital, plastic will continue to leak into nature or be managed in ways that prevent its circulation.
The plastic crisis is too large and imminent to be solved by a single solution or mechanism. We need a paradigm shift that integrates both voluntary and regulatory approaches across the full life cycle of plastics and implements them at scale.
Why Verra’s Plastic Standard?
To provide one complementary solution that can help address the plastic crisis and support the needed paradigm shift, Verra launched the Plastic Waste Reduction Standard (Plastic Standard). Through the issuance of Waste Collection Credits and Waste Recycling Credits, collectively known as Plastic Credits, the Plastic Standard drives finance to projects that improve plastic waste management systems around the world.
Plastic Credits will play a key role in addressing plastic pollution downstream, including legacy plastic waste.
Here is why:
- Plastic Credits can help keep plastics out of the environment by enabling the creation of sound plastic waste collection and recycling infrastructure and capacities.
- Plastic Credits can mitigate associated environmental and health risks that disproportionately affect the informal waste sector.
- Plastic Credits, when used alongside a company’s plastic reduction and redesign strategies, can play a key role in meeting corporate plastic stewardship goals.
- Plastic Credits can also support the advancement of the waste management priorities of regional mechanisms and global policy instruments.
Plastic Credits issued by Verra’s Plastic Waste Reduction Program (Plastic Program) are underpinned by several quality assurance principles that ensure their integrity and impact on the ground. Here are five key things to know about Plastic Credits.
1. Plastic Credits – A Key Component of a Company’s Integrated Plastic Waste Reduction Strategy
Plastic Credits are an innovative finance mechanism that allow companies to make downstream investments in new or expanded plastic waste collection and recycling infrastructure, particularly in geographies that are disproportionately impacted by plastic pollution (such as Least Developed Countries and Small Island Developing States). Projects certified with Verra’s Plastic Program create measurable, verified impacts in line with environmental and social safeguards that alleviate health risks and facilitate additional social benefits for the informal waste sector. Investing in plastic waste collection and recycling infrastructure ensures that any remaining plastic waste in a company’s value chain will be collected, kept out of the environment, and recirculated in the geographies in which they operate. Such investments also increase the availability of recycled feedstock needed to meet companies’ recycled content targets.
By facilitating the scaling up of waste management systems that suffer from chronic underinvestment, investment in Plastic Credit projects can deliver the transformational change needed to support a circular economy.
Plastic Credits should not be used as a standalone tool or a license to continue business-as-usual practices. Rather, they should form part of a company’s integrated plastic waste management strategy that encompasses both upstream and downstream solutions. Focusing only on upstream solutions such as plastic reduction and substitution without expanding downstream infrastructure would still result in a 28% increase in plastic leaking into the oceans by 2040, compared to 2016 levels.Therefore, in addition to taking actions within their own value chain to address the sources of plastic pollution upstream, companies should also address the plastic waste that remains in their value chain despite plastic reduction efforts. Plastic Credits are an excellent tool for this purpose.
2. Verra’s Plastic Standard – Verifiable Accounting and Crediting of Plastic Waste Collection and Recycling Activities
Verra’s Plastic Standard and its methodologies underwent a rigorous development process and reflect quality assurance principles that ensure transparency and integrity. These include:
a. Development and governance: The Plastic Standard was developed over a two-year period following a rigorous multi-stakeholder development process. The ongoing development of the program includes public consultations and input from a cross-sectoral Plastic Program Advisory Group, which contributes to the technical and strategic evolution of the program.
b. ISEAL best practices: The development, maintenance, and evolution of the Plastic Program is guided by ISEAL’s Codes of Good Practice, which are recognized as the international reference point for credible standards and certification schemes.
c. Accounting methodologies: Project impacts are assessed using the approved and robust Plastic Waste Collection Methodology and/or Plastic Waste Recycling Methodology. The methodologies, developed through a multi-stakeholder consultative process and with input from technical experts, are regularly updated.
d. Demonstration of additionality: Every project seeking registration with the Plastic Program must demonstrate additionality using the procedures in the approved methodologies. This is a core requirement of the program and demonstrates that the plastic waste would likely not have been collected or recycled without the project.
e. Third-party verification: All projects seeking registration with the Plastic Program and requesting issuance of credits are subject to desk and field audits by qualified independent third-party auditors and Verra to ensure that they meet the rules and requirements of the Plastic Standard and apply the program’s methodologies properly. An independent validation and verification process ensures the integrity of the projects registered with Verra’s Plastic Program.
f. Assurance of end destination: Two types of Plastic Credits can be issued with the Plastic Program:
- Waste Collection Credits are issued to projects that verifiably dispose of the collected plastic waste in an end destination that prevents it from leaking into the environment.
- Waste Recycling Credits are issued to projects that demonstrate they have recycled plastic into a feedstock that can displace the use of virgin plastic.
g. No transboundary movement of plastic waste: Projects must comply with requirements that support the Basel Convention and discourage the transboundary movement of plastic waste.
h. Incorporation of safeguards: Plastic Credit projects reduce social risk across the plastic value chain by incorporating safeguards that improve livelihoods, ensure workers’ health and safety, and uphold human rights, particularly for the informal waste collectors and processors.
i. Continual improvement: Verra continually strengthens the requirements of the Plastic Program to ensure they reflect the latest data and science.
3. Funding Plastic Credit Projects – Long-Term, Sustainable Support for Plastic Waste Management Infrastructure
A company’s investment in a Plastic Credit project supports long-term investment in the infrastructure and capacity development needed to establish lasting, sustainable waste management systems, as opposed to one-off cleanup activities. Projects register with Verra’s Plastic Program because doing so provides them with long-term financing for 7-21 years, depending on the project’s crediting period.
Finance from the sale of Plastic Credits can enable the development of such waste management infrastructure that is otherwise not viable without the revenue from the crediting mechanism. Through these verifiable investments, companies can facilitate the transition to a circular economy and accelerate the fulfillment of their plastic stewardship goals.
4. The Value of Plastic Credits for Companies: Complementary, Impactful, and Credible Action
- Plastic Credits as a complementary solution: Investment in Plastic Credits should be an integral component of a company’s comprehensive plastic mitigation strategy, but not the company’s only approach to addressing plastic pollution. The need to reduce plastic leakage into nature is imminent and requires both upstream efforts (such as reduction, redesign, and reuse strategies) and downstream intervention in the form of Plastic Credits.
- Matching impact: The impacts of plastic pollution are local, and different plastic types have different environmental impacts depending on their form, degradability, and toxicity. Companies should purchase Plastic Credits to match the specific impact of their value chain.
Plastic Credits issued by the Plastic Program enable companies to do just that. They include a serial number indicating the unit’s polymer type, activity location, and end destination, which enables the buyer to purchase credits and invest in projects that manage the polymer types specific to the buyer’s plastic footprint and in their key production regions.
- Credible claims: By financing projects that collect and recycle the plastic type used in their own packaging and by communicating their use of Plastic Credits accurately and transparently, buyers can avoid greenwashing. Plastic Credits that are being retired to make such claims are publicly tracked in the Verra Registry, providing further transparency and credibility to the process.
Verra is committed to supporting the development of technically robust claims as outlined below:
a. As a part of the 3R Initiative, Verra contributed to the development of the Guidelines for Corporate Plastic Stewardship (Guidelines) in 2021 along with EA, South Pole, and Quantis, and in consultation with a broad range of organizations in the plastic waste and circularity space. This included consultation with the Ellen MacArthur Foundation, the UN Environment Programme, the World Business Council for Sustainable Development, the World Wildlife Fund, and multiple brands. The Guidelines are an integrated framework for standardized accounting and reporting of plastic footprints, footprint mitigation methods, and commitments to reducing plastic waste and achieving circularity. They introduce three robust plastic stewardship commitments that companies can use to transparently communicate about their management of plastic and use of Plastic Credits.
b. Together with other stakeholders, Verra is exploring how to harmonize plastic credit claims. Some terms (such as “plastic offsetting” or “plastic neutrality”) that are being used in the evolving plastic credit market do not clearly or accurately convey a company’s environmental impact. This may be detrimental to the adoption of Plastic Credits at scale.
5. The Value of Plastic Credit for EPR Schemes: Supporting, Accelerating, and Improving Impact
Plastic Credits can support the implementation and effectiveness of extended producer responsibility (EPR) schemes, as opposed to impeding their development.
Voluntary mechanisms like Plastic Credits can help incentivize investment in collection and recycling infrastructure, particularly in geographies experiencing large volumes of plastic pollution and lacking the resources to efficiently manage the associated environmental and health risks. Thus, Plastic Credit finance can close the gap on the amount of capital required by governments to manage plastic waste until EPR schemes are developed and become fully functional.
Plastic Credits can also improve the integrity of emerging EPR schemes when their characteristic principles – such as traceability, verifiability, social and environmental safeguards, and stakeholder engagement – are integrated into EPR policy. The administrative burden of verifying EPR compliance can also be reduced when regional governments leverage voluntary plastic crediting programs and their third-party auditing systems.
Verra is working toward developing a framework for integrating Plastic Credits with EPR schemes to efficiently deliver on regional plastic waste collection and recycling priorities.
Five Things You Should Know About Plastic Credits