Lessons from carbon credits to better arm brands in the war on plastic waste

Sustainability and brand managers are psyched about the US government’s new plan to issue guidelines for high-integrity carbon markets. The new guidelines aim to address distrust in the carbon credit market by introducing rigorous standards for carbon projects - and help companies avoid greenwashing pitfalls. Inherently, these guidelines also reinforce the US government’s strong position that properly governed and responsible carbon credits remain a critical tool in the broader toolkit to address the carbon crisis and ensure financing for high impact projects.

That’s an approach that can and should be applied to the plastic credits market. And one which we have taken from Day One here at PCX Markets. 

When we launched our marketplace to help fund plastic recovery and cleanup projects around the world, we spent a lot of time learning from the journey of the carbon credits market. We recognized there were critical differences that would make this mechanism even more reliable and impactful in providing scalable financing for plastic waste diversion. And as current and former public company executives and Board members ourselves, we made key design choices to ensure that our corporate partners would have confident answers and solutions to any and all of their stakeholders’ concerns.

Here’s five points about plastic credits that we feel will resonate with corporate leaders or sustainability managers who are familiar with carbon markets.

1. Tangible Impact That’s Delivered Today. Carbon credits are often seen as somewhat intangible and in some cases, difficult to measure. Carbon is an invisible molecule, and most of the  projects funded today through the purchase of credits, will only have an impact years from now based on a calculated carbon sequestration for the methods being employed.  When you buy a plastic credit from PCX Markets, you are funding tangible, clearly measurable and immediate impact, delivered and verified today.  Each credit pays for the direct cleanup and processing of 1 metric ton of actual plastic waste that can be physically weighed and measured. We ensure a full chain of custody on the work from collection through processing, and that entire process is independently audited before a plastic credit certificate is issued to the buyer and the impact is recorded on our public registry.  We also made an explicit decision not to follow the early choices made in the carbon credit markets to make this instrument a tradeable commodity from day one. The lack of consistent measurement, impact verification and aligned standards served to undermine the credibility and reliability of trades, and slowed progress. In our case, we will not enable these credits to be traded in secondary markets until we have proven tangible and significant impact from one-time purchased, fully retired credits.

2. Clear converging standards:  While the Biden administration's move to create carbon credit guidelines for the US is great news, it’s taken years to get there. The plastic credits sector has been able to move more quickly to create clear, robust standards. This year, an industry working group called the PREVENT Waste Alliance issued a minimum guidelines for plastic crediting, which states clearly which standards meet and raise that bar. As a result, PCX Markets will only represent projects that are fully accredited and verified on one of the only three standards that have been assessed to exceed these minimum standards. These include The Plastic Pollution Reduction Standard, issued by our non-profit sister organization PCX Solutions, the Verra PWRS standard, and Ocean Bound Plastics.‍

3. Rapid alignment of regulatory frameworks. The global community took many years to arrive at an agreement on climate change through the COP process; they’re moving much faster to address plastic pollution. The UN Global Plastics Treaty process, which kicked off in November 2022, will conclude by the end of this year, with intent to have a signed treaty in early 2025. Over 30 countries already have some form of Extended Producer Responsibility law, and the treaty will likely accelerate the adoption of these ‘polluter pay’ regulations.  We have been proud to be an active participant in this process, providing our perspective on the role of credits as a critical financing lever, particularly to address legacy plastic waste in developing markets. Our team of experts helps companies across different markets meet their obligations, engage with regulators and file submissions to meet regulatory and compliance requirements, which go well beyond just the purchase of plastic credits themselves.

4. Positive socio-economic impact. The plastic pollution crisis affects us all, but developing markets - which lack waste infrastructure - have been hardest hit. Plastic credits not only channel funding into recycling and processing infrastructure, incentivizing greater capacity and stable pricing, but they also deliver funding into local communities by assigning a value to plastic, creating a circular economy. We only accept credits from projects that have met stringent standards, and have been verified by auditors on both environmental and social impact.

5. Transparency = integrity. Trust and transparency are core values at PCX. So we have made everything public, from Day One.  Every project we support is presented with all of their details on our marketplace, with plastic type, collection, processing type, location and pricing available for anyone to see. In addition, each credit purchase, and the impact that has been delivered by that funding, is recorded on our public registry, along with all supporting documentation and verification documents.  Companies can speak with confidence about the cleanup they have funded - today - and the proof is there for all to see.

According to a recent report by Bloomberg NEF, the plastic credit market has the potential to drive billions of dollars into recycling and waste management infrastructure in emerging markets, where it’s needed the most, in the coming decade. 

That’s a story every major brand can be part of, and we believe that the approach we have taken at PCX Markets will enable this impact to scale exponentially and efficiently with the right support. 

If you’re thinking about your company’s plastic stewardship strategy, reach out to us to find out how plastic credits can complement your upstream reduction plans.