Plastic Credits - Overview
An astonishing 91% of plastic waste is not getting recycled at all. Add to it the infrastructure, which often needs to be improved where it is needed most. Without immediate action, such as obtaining a plastic credit certificate, the annual flow of such waste into the ocean will triple by 2040. It is indeed a catastrophe that will have irreversible effects on the food chain, marine life and the communities affected by plastic pollution.
For the unversed, a plastic credit is a transferable certificate representing the collection of a particular weight (e.g. one kg, one metric ton) of recycled or recovered plastic waste that would otherwise have landed in the natural environment.
Plastic credits are a traceable, measurable and verifiable means to incentivise the recovery and removal of plastic waste via several projects worldwide. With accurate measurement, plastic credit certificates allow businesses to offset their plastic footprint. It also will enable entities to go 'Plastic Neutral' by removing as much plastic waste from nature as used.
The Government of India (GoI) has already started a few steps to streamline the existing burden of plastic waste and organise the process. The Ministry of Environment, Forest & Climate Change (MoEF&CC) has decentralised the system and made it the prime responsibility of producers, importers, and brand owners (PIBOs) to collect used multi-layered plastic pouches, sheet and packaging material introduced by them into the market under (Extended Producer Responsibility) EPR for Plastic PIBO as part of Plastic Waste Management (PWM) Rules, 2016.
PWM Rules 2016 facilitate a statutory system for plastic waste management. The rules further concentrate on plastic waste recycling, minimisation and source segregation. Thus, there is an immediate need to be aware of both the manufacturer and the consumer to ensure the success of the plastic credit model. If implemented correctly, the plastic credit system is an effective waste management means that can have a significant economic and social impact.
In June, the Central Pollution Control Board (CPCB) introduced a draft policy that offers producers the choice of buying plastic credit certificates from co-processors or recyclers as an alternative to contributing to a special fund for PWM or setting up plastic recycling plants themselves.
The Plastic Credit Model
- i. Under this model, the producers can exchange plastic credits from plastic waste processors that have been particularly accredited for this purpose via registration at the EPR portal.
- ii. The credits are offered as a plastic credit certificate depending on the amount of plastic waste recycled to acknowledge their contribution to waste management.
- iii. An obligated PIBO can obtain the plastic credit certificate for the required quantity of plastic waste recycled directly from a verified seller framework to offset their EPR obligations under the PWM Rules.
- iv. The certificate guarantees that the plastic waste is ethically transported, collected and put to end-of-life while also ensuring the monetary benefit is realised by the unprivileged recycling sector.
How to Calculate the Plastic Footprint?
Calculating your plastic footprint involves considering how much you consume and dispose of. This includes single-use plastics such as plastic bags and straws and oversized items such as electronics, plastic packaging and furniture.
How are Plastic Credits Created?
- i. Plastic is collected from nature-bound sources.
- ii. Also, anything that can be recycled is recycled. At the same time, the rest of the items go to the next most environmentally-friendly end-of-life management solution, like co-processing or reprocessing.
- iii. A plastic credit is issued for each "additional" kilogram of plastic recovered or recycled by a project.
Who Buys Plastic Credit Certificate?
Individuals and businesses can purchase plastic credit certificates to eliminate waste and fulfil their EPR targets.
Why are Plastic Credits Important?
- Using a plastic credit certificate, one can facilitate the ethical collection of such waste, professional sorting at its sites, and producing various waste-to-value products like recyclables and compost.
- Plastic credits are desperately needed to allow waste management infrastructure development, scale up existing solutions, and support circular-economy innovations worldwide.
- Under the plastic credit model, brands can successfully redesign their plastic products for recycling and reuse, use recycled plastic content and improve end-of-life management via increased recycling and collection efforts.
- Even then, some leakage of plastics into the environment is still possible. Plastic credit certificates, therefore, have a role in compensating for such pollution that can't be prevented or for cleaning up 'legacy' plastic that organisations have generated in the past.
- Plastic credits, including legacy plastic waste, are essential in addressing downstream plastic pollution.
- Plastic credit certificate help keeps such waste out of the environment by allowing the creation of sound plastic waste recycling and collection infrastructure and capacities.
- Plastic credits can reduce health and environmental risks disproportionately affecting the informal waste sector.
- A plastic credits certificate can play a vital role in meeting corporate plastic stewardship goals when used along with a business's plastic redesign and reduction strategies.
- Plastic credits can also facilitate the advancement of the waste management priorities of global policy instruments and regional mechanisms.
Salient Features of Plastic Credits
- Investing in plastic waste recycling and collection infrastructure guarantees that any remaining waste in a company’s value chain is collected, kept out of the environment and recirculated in the geographies in which they operate.
- Such investments also boost the availability of recycled feedstock required to meet companies’ recycled content targets.
- Two types of Plastic Credits are issued:
- Waste Collection Credits - issued to projects that verifiably dispose of the collected plastic waste at an end destination that prevents it from leaking into the environment.
- Waste Recycling Credits - issued to projects that show they have recycled plastic into a feedstock that can displace the use of virgin plastic.
- A business's investment in a Plastic Credit Model facilitates long-term investment in the capacity and infrastructure development required to establish lasting, sustainable waste management systems rather than one-off cleanup activities.
- Obtaining Plastic Credit Certificate can support the effectiveness and implementation of Extended Producer Responsibility schemes instead of impeding their development.
- Plastic Credits can also improve the integrity of emerging EPR schemes when their characteristic principles like verifiability, traceability, social and environmental safeguards and stakeholder engagement are integrated into the policy.
- Plastic credit certificates also incentivise businesses to lower their plastic consumption and waste while generating economic opportunities for sustainable alternatives.
Frequently Asked Questions
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1. What is the entire process involved in the Plastic Credit Model?
There are two main participants in plastic credits. One is companies that use plastic in their packaging and products. The other is projects that collect and/or recycle plastic from the environment. These two parties work together as follows.
- A company intends to take responsibility for the plastic they place into the environment by removing a similar amount. The company finds plastic credits are the best way to do this.
- The first step is for the company to calculate how much plastic they place into the environment annually. This is called the Plastic Footprint.
- The company then purchases a volume of plastic credits that match the plastic footprint, i.e. one plastic credit equals 1 tonne of plastic footprint. So, if a business has a plastic footprint of 10,000 kg, they buy 10,000 plastic credits.
- The money that the company pays for the plastic credits is given to a project. In return for being given this money, the project is obliged to recycle or collect a volume in kgs of plastic equivalent to the company's plastic footprint.
- As a result of the transaction between a project and a company, benefits are generated for both parties. The company can claim they've taken responsibility for the plastic they place into the environment, i.e., Company X is now Plastic Neutral. For the project, they can source funding to sustainably support plastic collection and recycling, which would not have otherwise been possible had it not been for the financing.
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2. Does the company have to collect 100% of the plastic they have placed into the environment?
No. The company must settle on the proportion of their plastic footprint they intend to collect from the environment. Some businesses may have a substantial plastic footprint and settle on addressing a part of their plastic footprint initially and 100% eventually.
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3. Are plastic credits similar to carbon credits?
Yes. They are very similar. The plastic credit system was inspired and developed from the carbon credit systems that have been in use for the last 20 years. The system produced 212 billion dollars of funding for carbon reduction programs the previous year worldwide.
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4. What are the challenges of plastic credits?
While plastic credits have many benefits, they also face some challenges.
- Firstly, accurately measuring plastic waste recycling and reduction can be challenging. This means that there is a risk that businesses can overestimate their plastic waste recycling or reduction and sell credits that do not represent a genuine reduction in such waste.
- Then there is the risk that plastic credits can be used as a means for businesses to offset their plastic use without reducing it. This can result in a situation where such waste is not decreased but moved from one place to another. That is why businesses must complement their plastic offsetting with actual plastic use reduction systems. Thus, precise regulation is essential.
- To be able to depend on plastic credits, it is vital to guarantee that they are based on verifiable and accurate data. This can be achieved by establishing standards for plastic waste recycling and reduction. This also needs businesses to report on their plastic use and waste reduction.
- It is also essential to guarantee that plastic credits are not used as a means for businesses to offset their plastic use without reducing it. This can be achieved by setting requirements for a company to decrease their plastic use before obtaining plastic credits.