A plastic credit is a type of certificate that shows a certain amount of plastic has been collected and properly handled or recycled because of a project. This tool helps people, groups, and businesses pay for the cleanup of plastic waste in areas where waste management systems are not well developed. Plastic credits are earned by confirming that a specific amount of plastic, usually measured in kilograms or tons, has been removed from the environment. The system works to solve the problem of plastic pollution by using money from businesses to build better waste management systems, especially in places where these systems are missing or not well developed.

History

The idea of plastic credits began in the late 2010s, based on how carbon credits work in climate finance. As more people learned about plastic pollution, especially after studies and documentaries showed the problem of ocean plastics, there was a need for services that could be expanded and tracked. Groups like Plastic Bank and Verra started looking into using credit systems. By the early 2020s, several independent standards and systems were created to check and approve plastic credit projects.

The plastic credit market grew quickly with help from international programs, such as the Ellen MacArthur Foundation's New Plastics Economy and projects from the United Nations Environment Programme. Companies like CleanHub and Repurpose Global joined the effort, helping to create clearer rules for giving out credits and checking their accuracy.

Operations

A plastic credit represents one kilogram of plastic waste that has been collected and properly handled—such as through recycling, other safe methods, or proper disposal—under a project approved by independent experts. These projects join recognized programs and have regular checks by independent experts to confirm the amount of waste collected and how it is processed. Detailed records, including photos, GPS locations, and weight measurements, are kept to prove that each kilogram of waste was managed correctly. Once verified, credits are added to a public list, where they can be tracked from when they are created, transferred, and finally retired. When a buyer purchases and retires credits to reduce their plastic waste impact, the list marks those credits as used, preventing them from being counted more than once and ensuring full tracking and verification.

The plastic credit market is still developing compared to well-established carbon credit markets but is growing rapidly. This growth is driven by companies aiming to meet sustainability goals, the creation of credit systems by non-profit organizations and startups, and increasing pressure from consumers and government regulations. More collaboration and partnerships among groups across the supply chain are becoming common.

Typical buyers include large international companies, brands that make eco-friendly products, and event planners. Credits are provided by waste management companies that have been approved by experts, often in developing countries. The global plastic credit market is expected to grow by an average of 121% each year from 2025 to 2033, reaching an estimated value of USD 6.83 billion by 2033.

TÜV SÜD plastic credits

TÜV SÜD, an organization based in Germany, created a standard for plastic credits. This standard includes:

• Clear rules for collecting, sorting, processing, and issuing credits for plastic waste.
• Independent checks through on-site visits and data reviews to confirm waste is handled according to approved methods.
• Tracking systems using blockchain technology in some cases, which increases transparency and reduces fraud or double counting.
• Publicly shared documents, such as detailed reports about how credits are issued.

TÜV SÜD credits are used by large companies and investors to support environmental claims. These credits are backed by the organization’s experience in industrial audits and ISO certification. The system also allows for the recycling of plastic waste from difficult areas, such as coastal regions and informal waste streams, under the same verification rules.

In 2023, CleanHub became the first system verified by TÜV SÜD for plastic credits, following the ISO 14064-3 standard.

Benefits

Plastic credits provide several environmental, social, and economic advantages:

• Payment only after waste is collected: Funds are given only when waste is confirmed to be recovered, ensuring results are achieved.
• Support for waste systems: Projects help build or improve waste collection systems in areas that need more help.
• Job creation: Work opportunities are provided for people who collect waste, many of whom are in jobs that aren’t officially recognized.
• Company responsibility: Companies can openly take action to reduce their impact from plastic waste.
• Trackable and checkable: Digital tools, public records, and independent checks ensure the process is trustworthy.

Criticisms

Plastic credits have the potential to help reduce plastic pollution, but they also have challenges that need to be addressed.

• Additionality concerns: It is important to ensure that the actions taken to earn credits would not have happened without the money from the credits.
• Market regulation: Without clear and shared rules, different groups may use plastic credits in ways that are not consistent or fair.
• Risk of offsetting mindset: Some people worry that plastic credits might be used to avoid making important changes, like reducing plastic use or reusing materials.

Experts have raised concerns about whether plastic credits truly help reduce plastic waste. Sian Sutherland, who co-founded A Plastic Planet, said that plastic credits are not very helpful and allow large companies to avoid reducing their own plastic use.

Zoë Lenkiewicz, who started Global Waste Lab, explains that some plastic credit programs work well while others do not. She mentions CleanHub and Plastics 4 Change as examples of programs that focus on helping communities first. These programs build long-term relationships, protect workers’ rights, and provide clear and honest information.