Should we give plastic credits a chance?

by John Stapel

Welcome to the second of my two-part series on waste management in India. If you missed the first part on challenges, I suggest giving that a quick read here before you read this week’s story.  This article originally appeared in our Circularity Weekly newsletter. Subscribe to the newsletter here.

I’ve had trouble describing my recent trip to Southern India in simple terms. Our inability to live within the limits of what our planet can provide and absorb was on full display the first two days of the trip. What we saw was an indictment on the human race. Within the first 24 hours, one member of our group was even wise enough to encourage us to keep our conversations between each other positive so as not to spiral into depression.

Frankly, I didn’t have the imagination after those first two days to see how the situation could be improved. Fortunately for me, and for all of us, there are people who do have the imagination to make a difference.

rePurpose Global

The convener of the trip to India and the facilitator of all the work we saw is rePurpose Global. This young company, founded by three Wharton School grads, is on a mission to solve the plastic pollution problem. The amazing thing about rePurpose is just how fast it’s grown. Founded in 2016, the company already has more than 50 employees and is operating projects in five countries. These projects range from removing ocean-bound plastic from the environment to enhanced sorting and new revenue streams for material recovery facilities through plastic credits. The projects remove more than 19 million pounds of waste every year that would otherwise be destined for the environment, according to the company.

This may be a good time for me to introduce the concept of plastic credits. A plastic credit can be thought of in similar terms to a renewable electricity credit or a carbon offset. When a company purchases a plastic credit, it is paying for someone to capture 1 kilogram of plastic that would otherwise be destined for the environment in order to offset 1 kg of plastic it has put out in the world. If this method works as written, companies that sell products in hard to recycle packaging (think breakfast/granola bars, pet food, snack bags, etc.) can mitigate their environmental impact while they look for better packaging solutions.

I am skeptical of this process. First and foremost, I’m worried that too many companies will use credits as an excuse to slow down innovation in plastic packaging because they can buy their way out of responsibility for the pollution they create. I admit that this is a cynical position but given the current plastic pollution crisis we face globally, my cynicism may be warranted.

According to rePurpose and others, $30 billion is needed every year to address the plastic waste crisis.

Another concern I have is that diverting plastic waste from the environment through plastic credits does not necessarily lead to circularity. Multi-layer plastic films (MLP), for example, are still not being recycled into new, valuable materials through these credit schemes. In many cases the MLP is being burned in cement manufacturing facilities (cogeneration) to replace coal. This represents a more beneficial second use than environmental leakage for sure, but is certainly not circular.

This trip did temper my skepticism a bit, though. Why?

Significant funding is needed to address plastic waste and there aren’t enough organizations lining up to provide that funding if they don’t get credit for it. According to rePurpose and others, $30 billion is needed every year to address the plastic waste crisis. To put that into perspective, Ecosystem Marketplace put the total value of voluntary carbon offsets, actively traded for more than two decades, at just $1 billion per year in 2021. Ideally, we’d like to see absolute and direct reductions in plastic waste (and carbon emissions), but these financing schemes for offsets and credits can serve as a bridge to that future vision.

When rePurpose Global looks at the plastic waste problem, it separates the solutions into a three-step process:

  1. Activating organizations on the ground that are already part of the waste management system
  2. Providing additional financing to aid growth and increase scale
  3. Verifying that the project is not only delivering additional plastic diversion, but also adhering to global environmental and labor standards

What I now know is that rePurpose and other organizations that share its goal of plastic waste reduction simply could not finance their work without a credit scheme.

So, what kinds of projects is rePurpose funding?

Waste Ventures India

The first solution we were able to visit in Chennai was Project Neela Sapana, managed by Waste Ventures India (WVI). The project there focuses on sorting mixed waste, selling the material with recycling value, and baling the MLP to be sent for cogeneration. MLP in this case is an additional material that otherwise would not have been handled responsibly due to its $0 value in the recycling markets. So far, WVI has recovered over 200,000 kg of additional waste through its partnership with rePurpose.

What stood out most to me at the WVI facility, though, were the working conditions. The facility had safety processes in place that are well-marked, great lighting, a good material flow set up through the facility and a separate space for meals and breaks. When we spoke to the women who work at the facility, they all expressed how excited they were to feel appreciated and like they are doing important work. We also heard about how they are able to use the extra income to help pay for their childrens’ education and provide a better life for their families.

Workers at a conveyor belt at Green Worms facility

Green Worms

When we traveled across the Southern part of India to Kerala, we visited Project Hara Bhoomi, an effort by rePurpose and Green Worms to capture ocean-bound MLP. The partnership with rePurpose has allowed Green Worms to expand its footprint, offer new services and ultimately to divert an additional 1.5 million kg of plastic waste from its former baseline operations. In the case of this project, a third of the diverted plastic ended up going into recycling streams (PET, polypropylene, etc.) while two-thirds was sent to cogeneration facilities nearby.

In terms of people, Green Worms was able to hire over 100 material sorters to work at its expanded facilities. Mostly women, many of which had never worked formally outside the home, they bring home a new income source to their family while working in an environment with regular breaks from monotonous sorting on the conveyor belt, a strong sense of community and (maybe most important) consistent hours that they can plan their lives around. When speaking with the women who work at the facility, I was struck by how much pride they take in the work that has long been looked down upon in Indian society. They know, and their families and friends know, how important this work is to improving the quality of life in Kerala and beyond.

Key takeaways

Are plastic credits schemes the way to ultimately get ourselves out of the plastic waste conundrum we are in? 100 percent no. Can they play an important role during the transition to innovations that don’t lead to plastic pollution? I believe so.

I’ll share a couple resources on plastic credits that I’ve read below, but let you make up your own mind about the utility of them. As with nearly everything in this circularity space, it is nuanced with shades of gray.

  • rePurpose Global’s "Plastic Credit Protocol"
  • Grist sponsored article, "A Plastic Neutral Plan That Buys the Planet Some Time and Innovation"
  • World Wildlife Fund Position, "Plastic Crediting and Plastic Neutrality"
  • Sustainable Brands, “What are Plastic Credits, A 4-Minute Explainer”
  • Waste360, “Who’s Tapping Into Plastics Credits and Why?”
  • GreenBiz article, “The Wild West of Plastic Credits and Offsets”