Plastic Waste Treaty Negotiation: “Zero (Plastic) draft” put forward to year end.

Written by Nhung Nguyen and Alessandro Musto

Rising concerns from governments toward plastic waste

According to the UN 2021 report, the global plastic production has risen tremendously in the last decades, reaching current amount of around 400 million tons per year, 2x higher than the production volume in 2000.

Of this, only 20% entered the circular model for which it will be reused, recycled, or incinerated as an energy source. The rest consists of plastic waste that end up in landfill or water flows to the ocean.??

Governments’ reaction included the creation of the High Ambition Coalition with objectives to end plastic pollution by 2040 via an internationally binding instrument to foster plastic production reduction, combined with comprehensive circular plastic life cycles. The Coalition currently has 58 state members from all continents, including: European Union, all Scandinavian countries, Korea, Japan, Peru, Ecuador, Dominican Republic, Ghana, island countries: Maldives, Cook Islands, Mauritius (full Coalition list)

?The Coalition’s Commitment has been strengthened with support from other States, including also biggest plastic producers such as China, US, Russia to create the Intergovernmental Negotiating Committee on Plastic Pollution (full list of participants) ?aiming to reduce 80% of plastic waste.

The Committee’s first meeting (INC-1) was organized in Uruguay in November- December 2022. Participating States have pressed for the urgent need of a global binding legal agreement on Plastic Pollution by 2024, accompanied with national solutions. The topic was again object of a second meeting (INC-2) held in Paris, from 29th May to 2nd June 2023, which received close attention from both public, private and NGO organizations.?

Outcome of Paris discussion on a global treaty to fight plastic pollution

Right direction toward global plastic treaty:

A strong tension was shown during the INC-2 discussions in Paris.

The High Ambition Coalition showed strong support and call for reduction of plastic productions, combined with limitation and/or removal of certain chemicals used in the plastic making process. Other participants whose economies are more reliant on petroleum industries remained focused on the plastic recycling and proposed the adoption of country specific policies, leveraging on each country’s unique circumstances as opposed to the commitment of a global binding agreement.

Participants came to an agreement to prepare the first draft of a global treaty on plastic pollution before the 3rd meeting in Kenya this November. Compared to the expectations prior to negotiation sessions; INC-2 result was considered weak. Yet, it marks a progress towards the goal of reducing plastic pollution at global level.

3 Key transformations to integrate plastic circularity into the economy:

Before the discussion in Paris, UN Environment Programme published in May 2023 a report on proposals of policies that can be adapted to end the plastic pollution. UNEP provides important insights on 3 key enablers:

1. Reuse acceleration can help to reduce 30% of plastic waste compared to business-as-usual scenario and at the same time, avoid the release of hazardous elements to land, water, air.
2. Recycle acceleration can help to reduce 21% of the plastic waste. Yet, the biggest challenges laying on the crucial need for design change to increase the product recyclability, which will simultaneously reduce the economic cost of recycling. Also, access to collection services, especially in the lower income countries is an obstacle that need to be solved.
3. Acceleration of Reorient and Diversify can reduce 17% of plastic waste via substituting virgin plastics with other sustainable materials. However, whether a material can be classified as sustainable alternative or not must be analyzed comprehensively to avoid unwanted impact on society and environment.

Environmental activists claimed that such proposals are tilted in favor of plastic circularity over the absolute production reduction.

From Government to Corporates’ actions

At corporate level, companies that are currently under social pressure and scrutiny for plastic usage of their products have shown strong proactiveness by publishing their commitments to increase the reuse and recycle characteristic of their product offers.

Nevertheless, the trade-off object of discussion at Government level applies also at corporate level: Should the focus be on reduction of absolute plastic production or on plastic circularity? The answer depends on the level of facilities within each country. ?Many developing countries do not have sufficient physical facilities to enable reuse and recycle. Thus, the only solution that companies can focus on in the short-term is to reduce the plastic usage while accelerating capital expenditure on plastic collecting & sorting facilities to reach its efficient economic model. Given the lack of public investment in recycling facilities in developing markets, private investment is crucial to finance the reduction of plastic waste. It may also bring economic benefits by: i) minimize the materials cost(s) and ii) additional revenue via providing plastic waste recycling services to other plastic polluters.

From an investor perspective, before a homogenous disclosure framework will be applied (EU mandatory Corporate Sustainability Reporting Directive and global TNFD on voluntary basis), engagement with issuers on their ambitions to switch and adapt the business model to circular economy (not only for direct operation but also for their supply chains) is currently the best approach to identify issuers that are ready to benefit from this strong global momentum. Sectors with high contribution to plastic consumption and production such as Energy, Chemical, Packaging, Food & Beverage should be prioritized in the engagement effort.

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