Companies Are Trying to Offset Their Plastic Waste. Some Experts Are Skeptical

I have a problem with the F-word, in that I use it far too freely. So, in an effort to raise a child with better manners than her mother, I implemented a household swear penalty system. Every time I dropped the F-bomb, she got 25 cents. Several years on, I can report that my language has not improved, but my daughter’s finances certainly have.

My parenting fail feels not too dissimilar to the nascent industry of plastic credits. Like its better-known enviro-financial cousin the carbon credit, it is a system in which companies with a large plastic footprint can, theoretically, mitigate their impact. For every ton of plastic they produce, they can pay for another ton to be collected from polluted rivers in the Philippines, or recycled away from a landfill in India, while claiming to be “plastic neutral” in the process.

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Like my household swear jar, plastic credits aren’t actually doing anything to stop the problem at the source. Unlike my predilection for profanity, however, plastic is a global scourge, clogging up rivers, destroying ecosystems, poisoning our environment, and threatening human health, at the rate of more than 350 million metric tons of plastic waste produced every single year. Plastic credit proponents argue that this system is the best way to finance costly waste management infrastructure and clean-up efforts that protect human health. My daughter might use the same argument to justify putting her swear-credit proceeds towards a pair of noise-canceling headphones in order to block the sound of my swearing.

There is no global standard for the four-year-old plastic credits industry, but several companies, including rePurpose, Plastic Credit Exchange, and Verra, have already started issuing credits for projects ranging from beach clean-ups in Bali to better waste-picker wages in Kenya. Now the World Bank has granted the industry its imprimatur, by issuing, on Jan. 24, a seven-year, $100 million bond whose financial returns are linked to plastic and carbon credits generated by projects in Ghana and Indonesia.

Conservationists and anti-pollution advocates are skeptical. They say that the only way to stop plastic pollution, which can last hundreds of years in the environment, is to dramatically reduce the production of disposable plastics. That means redesigning product lines to minimize plastic content, developing alternative materials, and investing in reuse and refill systems, like the glass bottles that Coca-Cola, one of the world’s top plastic polluters, pioneered in the early 1900s.

Financing cleanups, while necessary, should not detract from making sure that plastic doesn’t make it into the environment in the first place, says Winnie Lau, project director for the Preventing Ocean Plastics program at the Pew Charitable Trusts. And where credits are used, they need to be done right. “The devil is going to be in the details. Unless they are properly designed, with established standards and accounting methodology, good governance structures that provide monitoring, reporting and verification, they could become a system for greenwashing.” Or worse.

To make sure the funds are being used appropriately, the industry also needs a neutral third party to monitor the projects. For the past 18 years, Verra has been the world’s leading carbon offset certifier; in 2021 the Washington, D.C.-based non-profit launched a new plastics credit program. Verra, and other plastic credit companies like it, not only sets up standards for what constitutes a viable and effective plastics credit program, it is also responsible for verifying those projects, preventing fraud, marketing credits, and brokering sales. One of its most important roles is making sure that no credits are issued for projects that would have happened anyway, in what is known in industry jargon as “additionality.”

Recent investigations in The New Yorker, The Guardian and Bloomberg have questioned the effectiveness of Verra’s carbon credit projects, finding that many projects overestimated their carbon reductions, and raising concerns that plastic credit programs may similarly overstate their impact. The anti-plastic pollution advocacy organization Break Free From Plastic notes that several of the recycling and waste collection projects listed on the company’s website had been up and running long before the credits were introduced, raising questions about additionality.

Verra holds that these findings misunderstand the nature of the projects, and that the credits offer a rare opportunity for consumer goods companies to actually cover the costs of dealing with the problems they create. Some 15 million informal waste workers take care of most of the plastic garbage in the developing world, according to Komal Sinha, Verra’s director of plastics policy and markets. They work under extremely unsafe and hazardous conditions, and the environmental burden of mismanaged waste often falls on the poorest communities. “Addressing these problems requires one core ingredient: finance,” says Sinha. Yet corporate responsibility funds are rarely channeled into waste management projects. Credits streamline, and sanitize, the process.

No matter how worthy my daughter’s swear-jar-funded project may be, there is not much she can do to stop the upstream verbal pollution. As long as I am willing to pay for swear credits, it’s unlikely that I will actually change my behavior. That’s a failure point for carbon credits, and is even more of a risk in plastic credits, says Gilles Dufrasne, the carbon credit lead at Carbon Market Watch, a Brussels-based watchdog group. “The logic of plastic credits is focused on recycling, rather than reducing production. That is obviously working to the benefit of [consumer goods] companies since it’s much more advantageous for them to deal with the issue after it’s been created, rather than trying to avoid creating the problem in the first place.” Unless companies stop producing plastic waste in addition to cleaning it up, credits could simply become a license to pollute.

Verra is quick to say that is not the intention. Sinha cringes at the use of terms such as “plastic neutral” or “net zero plastic,” and agrees that the only way to reduce plastic pollution is through production reductions. But that doesn’t do anything for the estimated 6.3 billion tons of plastic waste that have been generated since the 1950s, she says. “This is not an offset. Plastic credits are one tool in a company’s entire toolkit … not a substitute for upstream actions, [such as] production redesign strategies. We need both.”

Other companies, such as the Filipino subsidiaries of Nestle, Colgate-Palmolive, and Pepsi-Cola Products, are already claiming net-zero plastic based solely on their downstream activities. And while the plastic is indeed collected, the disposal mechanisms are controversial. Only 9% of the world’s plastics actually get recycled. Some of that failure is due to waste mismanagement, but a lot of disposable plastic products simply aren’t designed to be recycled: juice boxes made of impossible-to-separate layers of paper, plastic, and aluminum, for example. True plastic recycling, in which a product is melted down and reformed into the same original product, is not cost-effective—virgin plastic is generally cheaper, and of higher quality, than recycled. As a result, many “recycling” projects are actually using the recovered plastic as fuel. A November investigation co-published by investigative non-profit Source Material and Bloomberg found that more than 80% of the plastic collected through plastic credits projects administered in the Philippines by the Singapore-based Plastic Credit Exchange (PCX) program had been delivered to cement manufacturers who used it to fuel their kilns, releasing greenhouse gasses and harmful toxic chemicals in the process.

The practice is widespread. In October 2020, Nestle’s Costa Rica branch announced to great fanfare that it had recovered and burned enough plastic waste in cement kilns to offset 100% of its post-consumer plastic waste that month. Even Verra considers it a solution. An analysis by Break Free From Plastic found that 22% of projects on the company’s database plan to generate credits from burning in cement kilns. (Sinha says that “we are watching this space,” and that chemical recycling, as the process is known, should only be used as a last resort.)

Break Free from Plastic’s corporate campaigns coordinator, Emma Priestland, says the practice should be banned. “You’re just transforming visible plastic pollution into air pollution and toxic chemicals that are going to have a really serious impact on that community’s health.”

PCX agrees that reduction in plastic production is “absolutely crucial,” but that management of downstream plastic waste, including legacy plastic pollution, is equally vital. “This issue is an ‘and’ situation,” not an “ ‘or’ situation,” says Cris Prystay, communications director for PCX.

It’s at this point that my swear-jar analogy falls apart. While it may be unpleasant for some, the F-word is essentially harmless. Plastic isn’t. Released into the environment, it breaks down into micro and nano-plastics that leach toxic and potentially cancer-causing chemicals into our oceans and rivers, infiltrate our food chain, and end up lodged in our lungs, our livers, and even human placentas with uncertain—but certainly alarming—impacts on human and environmental health.

A better analogy might be prescription pain pills, because we, as a society, are addicted to plastic. It’s cheap, useful, plentiful, easily available, and impossible to envision a future without. And as long as we can get away with paying a small penalty every time we use, chances are, we won’t do much to address the addiction itself. Until the toll is too high, at which point it might be too late.