June 22, 2024

Amid growing pressure to address the global plastic pollution crisis, many companies are turning to plastic credits — tradable units that represent some amount of plastic litter that’s been removed from the environment. This is convenient for companies that find it too difficult or expensive to reduce the amount of plastic that goes into their products and packaging. Instead, they can buy credits and say they’ve “offset” their plastics footprint.

Plastic credits’ proponents say they open up a critical funding stream for waste management in the developing world, enabling the collection of low-quality plastic waste that would otherwise have remained litter. Verra, a nonprofit that runs one of the world’s biggest plastic crediting programs, says credits can advance “plastic stewardship goals” and “accelerate the transition to a circular economy for plastics” — a system that conserves resources and minimizes waste generation. 

But environmental advocates and experts are concerned that credits justify ongoing plastic production and distract from more aggressive policies to make producers responsible for waste management. Now, there’s evidence that some plastic credits are funding cleanup programs that were already in operation long before the credits came along, calling the credits’ utility into question.

According to a recent report co-published by the nonprofits Global Alliance for Incinerator Alternatives, or GAIA, and Break Free From Plastic, many projects in the pipeline to certification from Verra do not involve “additional” waste cleanup, beyond what would have happened in the absence of the plastic credits. Out of 41 plastic collection and recycling projects listed in Verra’s database at the time of the report’s analysis, only three had been issued plastic credits that they could then sell to buyers. Of those, two projects were issued credits earlier this year, but for cleanup activities that began in 2019 or 2020. The third was issued credits in 2022 for activities dating back to 2020.

What’s more, at the time of the report’s analysis, 83 percent of the projects that had applied for Verra’s certification — but that hadn’t yet been fully approved — had already been in operation for more than a year. If approved, 42 percent will have been in operation for more than five years. This means the majority of the projects were already functioning without any revenue from Verra’s plastic crediting mechanism.

“What it seems like is happening is that whatever plastic is being picked up was already being picked up,” said Neil Tangri, GAIA’s science and policy adviser. These waste collection projects did not need plastic credits to operate, he added.

This problem is familiar territory for anyone who’s been following the voluntary carbon market, which shares many features — and flaws — with the fledgling market for plastic credits. Recent investigations have shown that many credits exchanged on the carbon market are essentially “junk,” representing emissions reductions that would have happened whether or not a crediting system existed. Verra, which controls two-thirds of the world’s voluntary carbon market in addition to its newer plastic crediting program, has fallen under particularly intense scrutiny for its rainforest-based carbon credits. One investigation found that more than 90 percent of these credits do not represent real emissions reductions, because the areas of rainforest they’re tied to were never at risk of deforestation in the first place. (Verra disputes the findings and has recently updated its methodology for forest-based carbon offsets.)

Two people pick up plastic from river
Residents cleaning up plastic from Lampung Bay in Indonesia.
Ferdi Awed / INA Photo Agency / Universal Images Group via Getty Images

In both cases, the plastic credit market and the carbon market, additionality has proven to be the “Achilles’ heel of the entire offset idea,” Tangri said. Proving additionality requires constructing a counterfactual — a “sci-fi universe in which your project does not exist.” And opinions on what that universe looks like vary widely.

For plastic cleanups, Verra asks project developers to demonstrate additionality by passing at least one of three tests. The first and easiest test automatically qualifies a project as additional if it is located in a least-developed country or a small island developing state, as defined by the United Nations, or in an underdeveloped region of a wealthier country. If a project fails that test, it can demonstrate additionality if it has a “penetration rate” of less than 20 percent, meaning it collects less than 20 percent of the total amount of waste generated in the host country. Finally, if a project developer can’t meet either of those conditions, it can run an “investment analysis” to demonstrate that its project is not “economically or financially attractive.”

Normally, Verra requires projects to self-report that they’ve met an additionality criterion prior to being listed on the plastic credit registry. Projects have to validate their planned activities with a third-party auditor within two years of their start date. Then, once they’ve started collecting waste, they have to verify with an auditor that they’ve really collected that waste, before finally being approved by Verra itself. This order of operations means credits can only be issued for projects that have already started. 

But Verra said it made a one-time exception to the two-year rule at the launch of its plastic crediting program in 2021. According to a spokesperson, Verra allowed projects with start dates on or after January 1, 2016, to register “if they were able to demonstrate additionality and conformance with all Plastic Program requirements by the end of December 2023.” The spokesperson said that the 2016 start date was chosen because it aligned with the release date of the New Plastics Economy, an initiative from the nonprofit Ellen MacArthur Foundation to advance a circular economy for plastics.

“Verra has a robust validation and verification process that ensures the integrity of the projects registered in Verra’s Plastic Program,” the spokesperson added.

Experts question Verra’s logic, however. Alix Grabowski, director of plastics and material science for the nonprofit World Wildlife Fund, called the organization’s first two criteria “proxies” for additionality — straightforward ways of evaluating a project without having to run a complicated investment analysis. Proxies aren’t intrinsically bad, she said, but Verra’s seem to encourage generalizations about countries’ waste management infrastructure. “Every place is different,” she told Grist, suggesting the need for “due diligence” to consider more than just a given project’s location in the developing world when deciding whether it would have existed absent the crediting system.

Nestle water bottles
Water bottles sold by Nestle SA, whose Filipino subsidiary has purchased plastic credits.
Robert Machado Noa / LightRocket via Getty Images

More broadly, Grabowski criticized plastic credits for failing to produce a pipeline of investable waste collection projects. By design, projects that meet Verra’s third additionality criterion — the “investment analysis” showing they aren’t financially attractive — have to remain reliant on the plastic crediting mechanism. “Should we really be putting time, money, and investment into credits if they’re designed to never scale?” she said.

As for the timing of plastic credits, Axel Michaelowa, a senior founding partner at the consulting firm Perspectives Climate Group, told the report authors that it was “perverse” to retroactively generate credits from waste collection projects that began several years ago. In 2016, he said, “nobody was talking about plastic credits, so it is inconceivable that these projects were planned taking into account the revenue from plastic credits.”

Notably, Verra didn’t start developing its Plastic Program until 2018. It was part of a group of organizations that worked together over three years to develop three market-based approaches to dealing with plastic pollution. 

Sebastian DiGrande, CEO of the Plastic Credit Exchange, or PCX — a company that both certifies projects with its own accreditation standard and sells plastic credits — said he didn’t want to criticize Verra’s methodologies. But he said his organization does not issue credits for cleanups that occurred more than a year ago. “We don’t go back five, six years,” he told Grist. “We just don’t. We cut it off for work done in the last 12 months.”

Many plastic crediting organizations, including Verra and PCX, are advocating for plastic credits to play a role in the United Nations’ global plastics treaty, which is scheduled to be finalized by the end of next year. Credits “can be used to bring financing anywhere it is needed,” they wrote in a joint statement last year. The Verra spokesperson clarified that plastic credits should not be a “substitute for upstream actions,” meaning that companies should use them in addition to their efforts to reduce the amount of plastic they produce. They also said Verra does not support terms like “plastic offsetting” or “plastic neutrality” because they “oversimplify plastic stewardship and do not appropriately convey the environmental impact of this mechanism.” 

Grabowski, who was on a technical committee that helped Verra design its plastic program standards, said she recommended explicit guardrails against these terms but was rebuffed by the organization. “Their response was that they didn’t have control over that,” she told Grist, even though neutrality claims are “the main reason” companies are interested in buying credits. “There’s an element where they’re enabling it while saying they don’t support it,” she added.

Worried following the failures of the voluntary carbon market, environmental advocates are calling for a different approach, while still acknowledging the need to pick up waste in places where it’s harming people and ecosystems.

One option, Tangri suggested, could involve a tax on all plastic-producing companies, with the proceeds going toward plastic cleanup, disposal in controlled landfills, and recycling where applicable. Such a system could be included in countries’ national action plans under the global plastics treaty, or implemented outside the treaty process. The most important thing, he said, is that it “doesn’t rely on the good will of companies to fund projects in certain kinds of charismatic, touristy places.”

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