Bridging the Plastics Financing Gap: How Results-Based Financing Can Rectify Delayed Treaty Action

The recent failure of the INC-5.2 negotiations to develop a global plastic treaty in Geneva in August 2025 was, for many of us deeply invested in a sustainable future, a profound disappointment. The promise of a unified, legally binding global agreement to tackle the escalating plastic crisis seemed within reach, yet the complex web of national interests and diverse priorities ultimately proved too challenging for a consensus. While a high-ambition treaty would undoubtedly be the ideal solution, the grim reality is that the planet cannot afford to wait. To advance action in this area, we must pivot from diplomatic impasses to pragmatic, forward-looking solutions.

Financing remains one of the biggest obstacles to tackling plastic pollution at scale. As per an OECD report (PDF) published in 2024, baseline investment needs for plastic waste collection, sorting, and treatment are projected to amount to more than $2.1 trillion between 2020 and 2040, globally. This is where market-based mechanisms come in.

Plastic credits, as a results-based financing mechanism, can operate alongside, and even be integrated into, policy tools such as Extended Producer Responsibility (EPR) schemes. When EPR schemes are designed with plastic credits integrated in them, they can bridge funding gaps, reward verified outcomes, strengthen traceability, and enhance the overall effectiveness of these systems. This alignment can help advance the same objectives that a treaty would have supported.

So, what exactly are plastic credits, and why should we trust them as a serious tool in our toolkit? In essence, a plastic credit represents a verifiable unit of one tonne of plastic waste that has been either collected from the environment or recycled. The credibility and traceability of credits are paramount, and standards programs like Verra’s Plastic Program play a critical role in ensuring their quality and integrity.

The Plastic Program is built on a robust foundation of clearly defined methodologies and a rigorous third-party auditing system. Projects begin by registering with the program and applying approved methodologies that govern plastic waste collection and recycling activities, which set out how impacts must be measured and reported. These activities are then subject to independent, third-party auditing to confirm that the project is operating as claimed and delivering the outcomes it reports.

Once a project has demonstrated that its activities are real, measurable, and beyond what would have happened without the financing from credit sales, it can generate plastic credits. This concept of additionality ensures that the program drives new and meaningful action rather than paying for business as usual. Every credit issued represents verified impact certified by Verra, creating a market-based, results-driven mechanism that channels finance directly into plastic waste management efforts.

This also allows capital to flow directly to where it’s needed most in order to effectively address the plastic crisis.

Skeptics often ask: will credits really deliver? Look at the voluntary carbon market (VCM), which emerged as an instrument for delivering real, lasting climate impact in the face of government inaction. While it is not flawless, it is undeniably catalytic: to date, the VCM has channeled billions into climate action and sustainable development. It has proven that market mechanisms, when governed by credible standards, can effectively mobilize private capital to address critical environmental challenges.

Plastic credits, as a results-based financing tool, can leverage the existing knowledge and capacity of the VCM to achieve a similar impact. Plastic credits can fill the financing gap until regulatory frameworks catch up and complement them through their development and implementation process—even as negotiations remain stalled.

EPR schemes are designed to ensure that producers take responsibility for the full life cycle of their products, including their take-back, recycling, and final disposal. They have proven to be effective policy tools for reducing waste, improving collection rates, and strengthening accountability. Their impact, however, is often limited by persistent funding gaps and the practical challenges of building or expanding waste management systems, particularly in regions with weak infrastructure. Plastic credits provide a solution by directing verified, performance-based finance into the very activities that EPR schemes are meant to deliver. When integrated with EPR, they can close funding gaps, reward real outcomes, and strengthen the effectiveness of these policies.

Verra’s recently released discussion paper, “Plastic Credits and Extended Producer Responsibility (EPR) Systems” (PDF), highlights precisely how this synergy can move the needle. By allowing obligated companies within an EPR framework to meet a portion of their recycling or collection targets through the purchase of high-integrity plastic credits, finance can be directly channeled to vital waste management projects. This allows companies to fulfill their EPR obligations cost-effectively while ensuring that verifiable and additional plastic waste is prevented from entering the environment or even given a second life. It’s a win-win: EPR schemes gain a flexible and outcome-based financing tool, and critical on-the-ground projects receive the investment they need.

These individuals, often at the front lines of the plastic crisis, frequently operate in precarious conditions. Financing channeled through plastic credits can formalize their work, provide fair wages, and enhance safety standards, turning environmental action into a force for social good.

While global treaties are crucial for setting overarching frameworks and fostering international cooperation, they often move at a glacial pace—or not at all! Meanwhile, plastic pollution continues to escalate, demanding immediate action. Results-based financing mechanisms, such as plastic credits, offer a practical and scalable solution by channeling finance directly into projects that deliver measurable impact on the ground. By harnessing these market-driven tools, we can bridge the financing gap, accelerate circular innovation, and empower communities. Even when diplomatic efforts falter, plastic credits represent a beacon of hope to drive the change our planet so desperately needs.