A Quick Guide for Plastic Credits

What is a plastic credit? A plastic credit is an environmental commodity that represents the collection or recycling of one ton of plastic waste, which can be transferred between organizations. They provide a transparent, accountable, and verified funding structure to support ecosystem restoration, create new waste management infrastructure and scale recycling and repurposing capacity. Plastic credits can be used for mitigating external environmental plastic waste that is beyond the company’s control and for addressing the unavoidable volume of their plastic footprint.?

How are they generated? Credits are created when one entity, often referred to as the project developer, voluntarily implements practices that collect or recycle plastic waste. Without these projects, this plastic would either remain in the environment or as material that would otherwise not re-enter a production stream. The recoveries generated can then be claimed by another entity.

In creating and issuing plastic credits, there should be rigorous processes and working from a public facing standard that is independent from the actual project to ensure that the plastic recovery and recycling is:

• Additional - Recovery or recycling that otherwise would not occur
• Validated and approved on one of the two independent, public protocols; Plastic Waste Reduction Standard or Ocean Bound Plastic (OBP) Certification
• 3rd party verification audited
• Individually numbered, tracked and retired on one of the two registries; Verra or Zero Plastic Oceans (OBP)
• Assessed & documented for project social, community & environmental benefits

The term plastic credit should only be used for issuances certified from a public, independent standard with 3rd party verification auditing. Projects that operate under a proprietary program and certify their own work should not use them term plastic credit.

Kingfisher Parker’s plastic credit program provides a global portfolio of projects for diversity of geography, impacts and circular economy solutions.?There is a zero-landfill policy; recovered plastic?material?is recycled,?repurposed or co-processed?for a?productive next-life?use. The zero-landfill policy allows projects to track and secure the material to stop the risk of double counting. By not sending any collected plastic to a landfill, the risk of leakage back into the environment is mitigated.

There are different types of projects that can generate plastic credits. Some examples:

• Shoreline and waterway debris removal by hand
• Plastic collection traps set in rivers
• Open ocean collection by boat
• New community collection programs
• Recycling materials collected from the natural environment, post consumer & industrial waste, urban dumping, and unmanaged landfills
• Creating new and additional recycling capacity to displace use of virgin plastic

What benefits are attributed to plastic credit projects? Many social and environmental co-benefits should result from successful plastic projects. The most acute plastic pollution occurs in the developing parts of the world. Plastic credit generating projects can provide direct and indirect employment opportunities, promote education, improve water quality, sanitation, community health, protect food supplies and biodiversity. In many cases, environmental justice is central to the plastic waste crisis. ClimeCo uses the SDG Action Manager for a quantitative assessment for UN Sustainable Development Goal support.

“An estimated 11 million metric tons of plastic waste enter the ocean every year. Without immediate and sustained action, that amount will nearly triple by 2040, to 29 million metric tons per year. That’s the same as dumping 110 pounds (50 kilograms) of plastic on every meter of coastline around the world.”?Pew Charitable Trusts

How can plastic credits benefit a company?

• UN SDG alignment
• Mitigating external environmental plastic waste that is beyond a company’s control
• Addressing the unavoidable volume of a company plastic footprint
• Matching to a product line, specific amount, polymer type or geography of a plastic footprint
• Providing content for ESG/CSR/sustainability stakeholder communications
• Contribution to Extended Producer Responsibility (EPR) schemes
• Lowering the cost of recycling
• Lowering the cost of recovering environmental plastics
• Certifying materials as being marine or ocean bound plastic or other source
• Supporting US Plastic Pact Targets 3 & 4?
• An option for supply chain partners to help address their plastic footprint

The goal for a well designed plastic credit project is to develop solutions that are working upstream over time. Beginning with pollution removal and ecosystem restoration, building and expanding new infrastructure as you go. Finally, when functioning upstream, circular solutions are in place, the plastic crediting mechanism can phase itself out. Unlike many carbon credit projects, plastic credits are not meant to be a long term program.

"Plastic Neutral" This is a claim that a lot of brands would like to make. If a company wants to use "Plastic Neutral" in their marketing, they need to decide if they are ready to defend and explain what this claim entails. Can the brand provide its stakeholders with a proper definition of "Plastic Neutral"?

It's the author's advice for a company making a claim by supporting a project through purchasing plastic credits, to be as specific and detailed as possible. If a brand is using a certified and verified plastic credit, then there should a great story to tell about the project's environmental & social impacts.

Recycling credit claim - The purchase of a Verra Waste Recycling Credit (WRC) is an investment in new plastic recycling capacity and capability.?WRCs are verified and issued under the Plastic Waste Reduction Standard.?Each credit represents one ton of recycled plastic waste that otherwise would not have been processed and has displaced the production of virgin plastic.?By purchasing a WRC, a company makes new recycled plastic production viable.

?A WRC can not be used by a purchaser to claim it is part of their recycled plastic feedstock.?The purchase of a WRC does not contribute to a product’s recycled content.

"Greenwashing is the process of conveying a false impression or providing misleading information about how a company's products are more environmentally sound. Greenwashing is considered an unsubstantiated claim to deceive consumers into believing that a company's products are environmentally friendly." - Investopedia

Greenwashing Plastic credits are a tool against greenwashing. The highly documented validation and verification requirements from the independent crediting standards provide accountability and transparency. The traceability of plastic through the project's entire operations must be documented and 3rd party verified. Issues such as worker pay, child labor and employment conditions are part of a larger stakeholder engagement process. Local communities, governments and the environment itself must be engaged and their welfare has to be recorded. There are a variety of social and environmental impacts that are the result of plastic credit projects. These claims get to be used by the company purchasing the associated credits because they financially sponsored them. The work, people, locations and processes are displayed in public documents, such as this 94 page description for The WaY Project in Cote d'Ivoire. This information has to be audited in an ongoing basis.

How are credits priced? Plastic credits are tradable environmental commodities and once issued, prices are set and change with demand and supply forces. A project that provides greater direct environmental benefits should be valued higher than a credit coming from a lower impact source. Projects that support more progress in community health, gender equality, employment opportunity, and environmental justice should have these attributes valued in a credit price. There are higher costs in recovering plastic out of the ocean than from waste picking in a landfill, and these costs are reflected in those credit's price. To some buyers, credits coming from a specific geography, polymer, or source that aligns with a company's operations is worth a premium. Projects that pay workers to a higher standard or provide healthcare should be reflected in a credit's price. We don't want a market to simply work down to the lowest costs and prices at the expense of environmental and social impact.

Plastic credits will not solve our global plastic waste crisis, but they have a big role to play in bringing private sector capital to scale the recovery and recycling efforts. Credit issuing projects should be scrutinized, and buying credits should not be a replacement for a long-term circular business model. For companies, credits can be part of an overall program to redesign how their business uses plastic in operations and in their products. The emerging plastic credit market can be powerful for deploying funds to front-line projects working to creating new waste management and restore ecosystems.

Kingfisher Parker performs advisory, transactions, and project development for companies and projects in the environmental markets, ESG and sustainability, including for plastic credits. Chris Parker, Principal - [email protected]