Plastic Credits: Understanding the Risks and Opportunities in Addressing Plastic Pollution

Post-event update

Bangkok, 12 October 2022

Over 200 participants from government agencies, industries, businesses, start-ups and entrepreneur communities from Bangladesh, France, Germany, India, Italy, Japan, Korea, Nigeria, Norway, Pakistan, United States, and the ASEAN countries joined the regional dialogue on ‘Plastic Credits – A Circular Solution for Plastic Waste Management’ on September 28, 2022.

The United Nations Environment Programme’s SEA circular project in collaboration with the Asian Institute of Technology (AIT) Extension organised this event as part of a Regional Dialogue Series by SEA circular. The dialogue had a two-part programme; part I covering a keynote and information sharing on research findings; and part II covering an engaging panel dialogue on Plastic Credits.

The event started with the opening remarks by Dr. Vincent Aloysius, SEA circular Programme Officer. He provided the background of the efforts of the SEA circular project to shed light on the market-based solution of plastic credits that is relatively new, evolving and gaining traction in the region. SEA circular supported two research projects – one focused on a situational analysis of plastic credits and its evolution, providing recommendations for further developments; and the other focused specifically on benefits and risks that plastic credit schemes have on the informal waste collectors.

During the keynote speech, Ms. Asa Stenmarck from the Swedish Environmental Protection Agency and Steering Committee Member of SEA circular pointed out that plastic waste management legislation should focus on plastic packaging and design, single-use plastic product, waste legislation, and eco-design. These require a combination of policy tools, local authorities, good municipal, producer, recycling center cooperation and working together. Awareness of the environmental benefits of separate waste collection and recycling plays a significant role in circularity and are part of the extended producer responsibility (EPR).

In part I, Mr. Konstantin Munchau, Yunus Environment Hub, highlighted the study of research work on risks and opportunities of plastic credit financing instruments when introduced into the informal waste management sector. He highlighted risks associated with a voluntary source of funding bringing a huge vulnerability to the informal waste workers and also recognized exclusion of key informal waste management stakeholders due to rigid standardization.

The research conducted by International Solid Waste Associations (ISWA) assessed the contribution of the plastic credit schemes to reducing static pollution and improving recycling. Ms. Aditi Ramola mentioned that plastic credit schemes, a new type of financing instrument, encourages private sector investments in value-chain-based social and environmental improvements. She commented the plastic credit mechanisms could be extremely important in the system of sustainable waste management. However, she highlighted that plastic credits must be implemented in accordance with municipal and national legislation, including extended producer responsibility schemes.

Part II – Key take-aways from the panel discussion are summarized as follows:

In Part II, an engaging panel was moderated by Ms. Ina Ballik, a Sustainability Strategist with 5 panelists with strong experience from across South-East Asia. Ms. Ballik stated that the experience gained from this session would help with the construction of concepts for diving into EPR in our area.

Amongst several interesting discussions, below is a summary of the key questions and related responses during the panel session.

What do we still not comprehend about plastic credits that might promote comprehension and establish trust?

Mr. Pranav Goenka, Senior Commercial Executive Advisor, Singapore, addressed that the mandatory measures in place to promote comprehensive plastic waste management should be distinguished from the voluntary mechanism of plastic credits. Since plastic credits are mostly optional, they may be used as a tool to help close the affordability gap. It is important to consider the standard procedure for industry participants to report their plastic credit purchases, a critical component of building trust and openness in the system. Plastic credits must be included in the entire comprehensive framework for waste management, especially considering a strategy from the demand side that works on all the different components and acts.

How could we take a buyer’s perspective on Thai industries and combine short-term, mid-term, and long-term prospect for plastic credits?

Mr. Paradorn Chulajata, Honorary Chairman of Plastic Industry Club, Thailand, emphasized the need for the plastic industry to accept extended producer responsibility (EPR) while still adhering to the supply chain regulations set forth by the government. Plastic credit could be an additional instrument or transitional tool used before EPR becomes legalized requirements in Thailand. Hence, this market-based tool could be used to generate business value for both collectors and buyers. Plastic credit is a bottom-up phenomenon which is different from EPR policies.

What other features may plastic credits offer? What services can the various roles in the mandatory scheme provide?

Mr. Barak Ekshtein – Founder – TONTOTON, operating in Vietnam and Cambodia, felt significance of using plastic credit scheme is to encourage the collection and the handling of the low-value plastic or post-consumer non-recyclable plastics that collectors do not collect otherwise. The creation of a waste management system can fill in these gaps and cover and collect any kind of waste on the ground level. Hence, the plastic credit program might generate employment prospects at the local level.

What role do plastic credits play? And how do plastic credits relate to human rights-based approaches, responsible business conduct, the Basel Convention, and EPR policies? What are the inherent limitations of plastic credit schemes?

Mr. Vincent Decap – Co-Founder Zero Plastic Ocean (ZPO), France, highlighted that the plastic credit would only be a short-term instrument and be used to complete the task at hand while Extended Producer Responsibility (EPR) regulations are put into place. Plastic credits can add value to plastic waste bought by a business that wants to ensure that plastic is eliminated from the environment. To have a greater and more widespread influence, plastic credits will eventually find a place as a voluntary tool for businesses that choose to focus more on a human rights-based approach.

Where can we see the possibilities for plastic credits when we examine the governmental side from a very special aspect and add your perspective to the conversation?

Mr. Crispian Lao, Commissioner, Private Sector Representative from the Recycling Industry Sector, National Solid Waste Management Commission, Office of the President, the Philippines, highlighted that several private companies have participated in voluntary pilot projects in the Philippines. The projects categorized the waste into rigid and flexible credits that benefit everyone across the waste value chain. Government should develop a uniform standard for how policy makers declare footprint and how stakeholders calculate credits to account for social implications.

Highlights in Closing Statement of the Panel Discussion

• The plastic credit helps reduce environmental consequences on a global scale, and we should all collaborate on this to bring the value chain.
• Plastic credits would be used to close any gaps in the market that deal with issues. For instance, the plastic credits aid market mechanism for the non-recyclable plastic that businesses do not accept.
• Designing appropriate regulations and ecosystems to set the target to reduce ocean plastic pollution using plastic credit system is one of future strategies for countries.
• Plastic credits is a method to measure and offset the amount of footprint that businesses put into the market whether it be rigid or flexible packaging. Using plastic credit is a way to fund the informal system by spending money on credits.
• Plastic credits are viewed as a workable financial mechanism to promote comprehensive waste management. Adoption among a variety of stakeholders is crucial and this can only happen if people have more faith in the system’s workings and transparency.

Please keep an eye on our event page to know more about our upcoming events.

Readers are invited to watch the webinar recording here.

About SEA circular project

The SEA circular project – Reducing marine litter by addressing the management of the plastic value chain in Southeast Asia is implemented by the UNEP Regional Office for Asia and the Pacific and the Coordinating Body on the Seas of East Asia (COBSEA), with funding support from the Government of Sweden. SEA circular aims to reduce and prevent plastic pollution and its impact by working with governments, businesses, civil society, academia, and international partners. The initiative promotes market-based solutions and enabling policies to transform plastic value-chain management, strengthens the science base for informed decision making, creates outreach and awareness. The project leverages COBSEA’s regional mechanism to tackle the transboundary challenge of marine litter in a harmonized manner.abd