THE CRISIS

PCX Markets recognizes the decades-long global challenge of plastic pollution, which is the harmful accumulation of plastic waste in the environment. The world has produced about 9 billion metric tons of plastic since the 1950s. About 9% has been recycled, 19% incinerated, and 71% left in landfills or nature. Even if we were to scale back annual production of virgin plastic to 40% of current levels by 2050, the world would still produce another 11 billion tons that needs to be responsibly managed along with the legacy plastic waste. The Ellen MacArthur foundation warned that there will be more plastic than fish in the ocean by 2050, unless we commit to meaningful change.

Verified plastic credits can help fund collection, transportation and processing of the 9 billion tons of legacy plastic pollution that threatens the environment, as voluntary action complementing a holistic plastic action plan; they can also be one of different upstream and downstream measures in mandatory schemes, such as Extended Producer Responsibility (EPR), to channel funding in waste management infrastructure in countries where it does not exist yet. You can learn more about the crisis here.

Cutting out plastic completely is not as easy as people would like to think. The lightweight, durable material continues to make the modern world possible and many things we take for granted depend on it. Food, for instance, has been made safer and less cumbersome to transport, reducing spoilage and food cost—therefore alleviating hunger and climate change. Modern medicine has also greatly benefited from disposable plastic (look no further than the COVID pandemic to see proof of that). What has made plastic the problem it is today is that we never figured out what to do with it once we are done using it—or assigned that responsibility clearly. We need to work hard to reduce wherever we can the use of non-essential plastic, recycle that which is essential, and innovate to find better alternatives to plastic, not only because of the waste it produces but also because it increases the extraction of fossil fuels which heats our planet.

As with climate change, it is the poorest and most marginalized who are most severely affected by the plastic pollution crisis. The issue is critical in developing countries, where more than two billion people lack adequate waste management infrastructure, leading to food insecurity, increased illness, unnecessary deaths, greater harm to livelihoods, and further destruction to our environment.

Solving the plastic problem won’t automatically alleviate poverty, but we cannot solve either one without solutions that consider the welfare of the planet and every person. Thus, when we fight for climate justice, we must also demand social justice. We invite you to read the UN environment programme’s report, “NEGLECTED: Environmental Justice Impacts of Marine Litter and Plastic Pollution.”

Because plastics are produced mainly from fossil fuels, growing demand adds to the climate crisis both in the production and throughout the life cycle of plastic products. If no action is taken, greenhouse gas emissions from the production, recycling and incineration of plastics could account for 19 per cent of the total allowable emissions under the Paris Agreement, which seeks to limit warming by 2040 to 1.5 Celsius degrees. Reducing plastics thus has a critical climate co-benefit. What’s more, plastic pollution is impacting our ocean’s ability to absorb and sequester carbon. We can’t solve the climate crisis without solving the plastic pollution crisis.

Plastic credits allocate funding into projects that help solve the plastic pollution crisis. This includes investing in: operations that physically divert plastic waste away from nature; plastic waste collection infrastructure; recycling and upcycling infrastructure and capacity; information and education campaigns to drive behaviour change and encourage the adoption of a circular economy mindset; and crucially, additional recovery operations to help chip away at decades’ worth of plastic accumulation.

Plastic credits are a results-based financing mechanism that channels funds into specific projects and activities that address plastic pollution, while providing socio-economic benefits to communities on the ground. Results based financing ties the disbursement of funding to the achievement of independently verified results. In this case, projects issue credits only after their plastic pollution impact is quantified and verified by third-party auditors.

At PCX Markets, one plastic credit represents one metric ton of plastic that has been collected and either recycled, upcycled or co-processed, and cannot leak back into nature. Individuals or companies can buy credits to support cleanup and to take responsibility for plastic waste, both in voluntary and compliance markets.

All plastic credits sold on our marketplace have undergone reputable third-party verification. We only list projects that are in compliance with a select number of plastic crediting standards that we accept. Click here to learn more about these standards.

Projects that wish to issue credits as an additional finance stream first go through a registration process with one of the select standards we accept at PCX Markets. This includes a rigorous verification process conducted by a third party auditor to ensure the project meets the environmental and social safeguards set out by that particular standard. The impact they deliver is then audited by an independent verification and validation body (VVB), which reviews documents across the full chain of custody, including collection certification, weigh in/weigh out receipts from truck scales, certificate of processing/recycling, and environmental compliance certificates. Once the impact is verified the relevant standards body issues a plastic credit certificate with a unique serial number; the credit is sold to the purchaser and listed on PCX Markets’ public registry. This ensures transparency and avoids any double counting for work delivered against a particular credit. Each standards provider executes this work according to a rigorous process that is specific to that unique standard. Each can be seen in detail on their respective websites, which we encourage our partners to review in detail.

While plastic credits and carbon credits both offer companies a way to offset their footprint by funding projects that improve environmental outcomes, they differ in several ways. Plastic is a tangible substance that we can collect, weigh, track, process and verify at every step of the recovery and diversion process. So the work that’s backed by a credit represents impact that is delivered and verified today. Carbon credits, on the other hand, are modelled on future impact, which is less tangible and harder to measure.

Additionality refers to proof that the impact created by the project would not have taken place without the financing provided by credits. Credible standards, like PPRS, which is administered by PCX Solution, and PWRS, which is administered by Vera, have additionality as a requirement for all projects that they certify.

A project can demonstrate additionality by showing either net new or increased collection or recycling rates, as well as increased wages to workers, or the provision of social security benefits that are above what’s mandated by law.

Recyclers face many challenges, including the fact that virgin plastic costs far less than the recycled plastic flakes they sell, due to the additional labour and infrastructure it takes to collect, clean and process plastic. That price gap impacts demand. What’s more, the market is volatile. Companies that agree to purchase recycled content to meet corporate goals can change direction based on market cycles or even a change of leadership. We’ve seen instances where recyclers who’ve built new facilities based on a surge in demand have had to shutter operations when sentiments change. Credits help diversify their source of funds and reduce volatility. That, in turn, incentivizes these project partners to invest in infrastructure, scale their output, and pay more to waste collectors for different types of plastic. The same holds true for the upcyclers who turn plastic waste into products like outdoor furniture or building materials.

Plastic credit prices at PCX Markets are set by the project partners. Please visit our marketplace to view prices.

To get an estimate on how many credits your company might want or need to buy, reach out to us at [email protected].

Credits should not be an excuse to pollute. PCX believes the war on plastic waste requires comprehensive solution sets. Any plastic that can be safely removed from the supply chain should be removed. Any plastic that can be reused or recycled should be labelled and directed to those use cases. Companies can also buy credits to fund the cleanup of the equivalent amount of plastic they can’t immediately eliminate. Plastic credits are just one tool in the toolkit for companies that are charting a plastic stewardship plan.

That said, plastic credits do help encourage companies to use less virgin plastic by changing the unit economics of plastic. One of the big barriers that prevent companies from using more recycled content is the cost of virgin plastic, which is lower than recycled feedstock. But in EPR markets that allow companies to use plastic credits as one measure to reduce or offset their footprint, that equation starts to change. The cost of credits becomes part of the cost of doing business, effectively raising the overall unit cost of plastic inputs. As the volumes grow under EPR requirements, the price gap starts to close - and businesses start to look upstream for better solutions.

Emerging markets, which have been hardest hit by plastic pollution, are hobbled by a lack of waste management and recycling infrastructure. Precious tax dollars are already stretched over many urgent, competing priorities, such as education and health care, leaving little to manage a large and highly fragmented waste problem.

Half of the top 10 countries contributing to plastic leakage to rivers and seas are located in ASEAN, according to the World Bank. A recent report by the Asian Development Bank, meanwhile, shows that most countries in this region are falling short of the desired tax yield of 15% of gross domestic product (GDP) - a level widely regarded as the minimum required for sustainable development - due to the large size of the informal sector, a characteristic common to most emerging markets.

Plastic credits provide a market-driven mechanism to drive cleanup and help fund badly needed collection and recycling infrastructure, taking the strain off heavily burdened governments. A market-based solution is also welcome in developed markets, where there is little appetite for higher taxation - particularly to deal with an issue that can be solved by the private sector.

Not all plastic can be recycled, not all recyclable plastic content can be recycled indefinitely. Plastic that is sitting in landfills, oceans or elsewhere in nature, meanwhile, often has a high contamination rate and is difficult to recycle. Co-processing, a form of waste-to-energy recovery that is approved and regulated in many jurisdictions all over the world, is often the only viable option for end of life plastics and materials that can’t be recycled. The United Nations Environment Programme (UNEP) lists co-processing plastic waste for energy recovery in cement kilns - with the proper safeguards and monitoring - as an environmentally sound resource recovery option preferable to landfilling and incineration, and as a better secondary fuel source than fossil fuels such as coal.

Plastic credits should facilitate the collection of low value plastics, which would otherwise be passed over by waste pickers or recyclers. That’s a particular concern in developing countries where plastic pollution has reached catastrophic levels. A WWF study in the Philippines showed that 74% of plastics that leak into the ocean were initially collected but escaped from landfills located near waterways. It's urgent that all types of plastic waste are responsibly processed.

Transparency is foremost among our guiding principles. We only work with projects that issue credits verified by select standards bodies who prioritise transparency and accountability. All the credits purchased on our marketplace are recorded in a public registry that anyone can view. We are committed to faithful stewardship and continuous improvement, and continually review various standards in the market to ensure we are accepting only the highest quality plastic credits.

In March 2024 PCX Markets announced the transition from “Net Zero Plastic Waste” labels to a new “Plastic Cleanup Partner” program. While the methodology we used to certify the Net Zero claims is robust and sound, there is not yet a global consensus on the terminology or methodology for Net Zero. PCX Markets now runs the Plastic Cleanup Partner program for qualified credit purchasers.

This new label is awarded to companies and brands that deliver significant, measurable impact in cleaning up plastic waste. We help Plastic Cleanup Partners to clearly communicate the impact they are delivering in the fight against plastic pollution through impact-based claims - such how many kilograms the company helps clean up and divert from nature each year by purchasing verified cleanup credits, or how many kilograms of plastic waste their own consumers are helping clean up with every product purchase. Customers who see the PCX Plastic Cleanup Partner label can be assured that the brand they are purchasing products from is truly committed to building a future where no plastic waste ends in nature.

Our vision is to ensure a future where no plastic waste ends up in nature. In a perfect world, our work would not exist! In the meantime, we hope the PCX Plastic Cleanup Partner program will become a call to action where consumers and brands come together to take a stand for plastic clean-up and reduction for as long as the problem exists.

We come from different backgrounds, including environmental research, management, and policy, united by a common vision of a plastic waste-free world. Read our founding story and get to know the team here!

Let’s talk! Shoot us an email at [email protected].