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Humanity has produced more than 9.5 billion tons of plastic. That’s more than one metric ton, or 2,200 pounds, for each of Earth’s 7.9 billion people. This plastic does not come off.
“All the plastic we’ve produced since the material’s inception is still there,” said David Katz, founder and president of Plastic Bank, a company trying to build plastic recycling systems in developing countries. “If you yourself remember a little toy you used to play with as a kid, it’s still there somewhere. Do you remember that coffee cup lid you picked up 10 years ago? He’s still here somewhere too.”
Globally, only approximately 9% plastic is recycled. But it’s usually not because recycling technology is lacking. This is usually because it is not economically feasible to collect, clean and sort plastic waste – at least not in the United States, where new plastic is cheaper.
Katz said he found a way to make the economy work in developing countries where Plastic Bank operates, including Brazil, Egypt, Indonesia and the Philippines. It goes like this:
Plastic Bank’s corporate partners help fund informal waste collection efforts in one or more of the countries where it operates. Local plastic collectors pick up plastic in their area. This plastic could otherwise end up in the ocean, as the organization operates in communities within 50 kilometers of a waterway.
These informal waste workers often clean and sort their materials before dropping them off at Plastic Bank collection centers, where they are weighed and sent to local processors. There it is further sorted and shredded into flakes. Local processors can process the flakes into pellets or ship them overseas to process into pellets. Some Plastic Bank partners then purchase the recycled material at a premium price to use in their new products.
Plastic collectors are paid for the market value of the material, plus a bonus provided by Plastic Bank, enabling some of the world’s poorest people to support themselves through plastic collection alone.
Asis Wijayanto and his wife Atmawati support themselves and their daughter by collecting plastic with Plastic Bank. They live in Bali, Indonesia.
Ruda Putra
“The money we earn from collecting plastic goes to support our family’s day-to-day needs and pay for our daughter’s school fees,” said Atmawati, a trash collector whom CNBC spoke to in Indonesia, who collects and sorts plastic with her husband.
And the profits of Plastic Bank too. Katz said the company estimates it will bring in $60 million in revenue this year.
Ultimately, this all works because it’s cheaper to pay informal, low-wage workers in developing countries to collect and recycle plastic than it is to pay for municipal recycling infrastructure in wealthier countries. Even though recycled plastic still typically costs more, Plastic Bank partners such as cleaning products maker SC Johnson and German consumer goods multinational Henkel are willing to pay a premium for green credentials.
plastic credits
But only around 20% of Plastic Bank partners actually buy recycled plastic for use in new products. The remaining 80% buy plastic credits, intended to offset their new plastic production by financing recycling efforts in the countries where Plastic Bank operates.
Both types of partnerships support waste collection and recycling, but Alix Grabowski, director of plastics and materials science at the World Wildlife Fund, said it’s far better to use recycled plastic than to pay compensation.
“We have to make sure that plastic credits don’t allow business as usual,” Grabowski said. “We really want to see companies really cleaning their own house first, right? Looking at their own portfolio, cutting back and working on things like reusing and thinking about moving to responsible sources for the plastic they need before I look at something like credits.”
The whole concept of plastic credits grew out of the voluntary market for carbon credits and offsets, which has long been plagued by questions of efficiency. Verra, a non-profit organization that operates one of the most widely used carbon credit programs, is currently working to develop standards for the plastic credit market. Yet a few months ago a Guardian investigation found that the vast majority of Verra Rainforest’s certified carbon offsets are worthless, findings that Verra described as “obviously unreliable”.
But the plastic credit and carbon credit markets have key differences, said Svanika Balasubramanian, co-founder and CEO of rePurpose Global, a for-profit company that sells plastic credits to businesses looking to measure and reduce their plastic footprint.
“We’re not thinking about avoidance, we’re thinking about actual recovery, are we? So we’re not calculating what’s been avoided from the oceans. In a sense, we’re actually calculating what we’ve recovered And so the calculation becomes much easier.”
Like Plastic Bank, RePurpose partners generate credit by funding plastic recovery and recycling projects primarily in developing countries. While Plastic Bank only works with informal waste workers, RePurpose works with various partners in the country to fill gaps in local waste management infrastructure.
Workers from RePurpose Global’s partner organization Green Worms collect plastic in Kerala, India.
Global reassignment
“And so, it can be non-profit organizations, private sector waste management organizations, trade unions and waste worker cooperatives,” Balasubramanian said.
RePurpose also helps brands identify how they can reduce their use of new plastic or use alternative packaging materials, but unlike Plastic Bank, it does not sell recycled plastic. RePurpose did not reveal its earnings, but said it was over $1 million and growing rapidly.
Companies that buy credits from Plastic Bank and RePurpose can be Plastic Neutral or Plastic Net-Zero certified, meaning they remove as much plastic from the environment as they produce. But the WWF opposes terms like these — jargon borrowed from the carbon credit market that Grabowski says is misleading.
“So if you buy a plastic product and it says it’s plastic neutral, what would you interpret that to mean? Do you think that means that product is zero impact? Because it’s not true […] 99% of plastic is made from fossil fuels,” Grabowski explained. “It has an impact on our climate. It impacts communities around the world. And the fact that someone cleaned up that room doesn’t negate all of those other lifecycle impacts.”
Looking forward
Grabowski said while credits can be part of a larger solution, addressing the full extent of the plastic waste crisis must involve regulatory change. “So rather than really focusing on voluntary initiatives like credits, which are all voluntary, we want to see companies advocating for mandatory measures, like extended producer responsibility.”
Extended producer responsibility laws aim to make producers responsible for the end-of-life impacts of their products, factoring the cost of disposal and treatment into the initial price. Some states, including Maine, Oregon, Colorado and Californiaalready have book REP laws for plastic packaging, just like countries across Europe.
Many hope that policies like this will be encouraged by the Global Treaty on Plastic Pollutionwhich is currently being negotiated after the UN voted last year to create a legally binding international agreement to end plastic pollution.
“It’s a good start,” Katz said. “More has to happen. More politics has to change. And we’re fighting big oil. So there’s a lot of work to do.”
After all, fossil fuels are the building blocks of plastic, and as the world transitions to renewable energy, plastic is set to become the primary driver of global oil demand. With that in mind, Katz said, we cannot afford to ignore possible avenues of progress, including the emerging market for plastic credits that Plastic Bank and RePurpose are helping to create.
“Good is the enemy of good enough, and what we need to do today is implement things and then figure them out as we go and make sure we’re bringing value to organizations that do the most authentic work,” he said. said. “Do not defame those who try. And give it space to emerge and evolve.”
Watch the video to learn more about how organizations are helping fund plastic recycling by selling plastic pollution credits.