The world needs $1 trillion USD in private sector investments annually to reduce mismanaged plastic waste by 90% from 2019 levels by 20401. The biggest need is in the Global South, which bears the brunt of the plastic crisis and currently only receives 6% of investment into plastic circularity2.

In its recent report, “Unlocking Financing To Combat The Plastics Crisis: Opportunities, Risks and Recommendations for Plastic Credits”, the World Bank highlights that plastic credits can play a significant role in solving this crisis, through a results-based mechanism that connects public and private sector finance with specific activities that address plastic pollution.
“By quantifying and certifying the results of plastic pollution reduction initiatives, plastic credits provide a means for organizations to financially support these projects and contribute to the transition to a circular economy,” the World Bank observes.
The report highlights the potential benefits of plastic crediting and also looks at the challenges faced by the nascent plastic credits sector. At PCX Solutions we strive to address those concerns proactively - both through the evolution of our Plastic Pollution Reduction Standard (PPRS), and our efforts to work with industry and government agencies to help shape this critical, emerging market.
The benefits of plastic credits
Plastic credits assign a value to plastic waste, including ‘low value’ plastics that are typically not collected. They are an important funding mechanism based on the ‘polluter pays principle’, which is particularly critical in emerging markets that lack collection and recycling infrastructure.
The World Bank reports that the majority of credits issued in East Asia & the Pacific - the region worst hit by the global plastic pollution crisis and has also seen the most rapid adoption of plastic credits - have been issued under PPRS.
The World Bank report highlights four key benefits of plastic credits:
Provide financing for plastic pollution reduction initiatives, and make circular solutions economically viable and scalable.
Place a price or value on plastic waste reduction or reduction of plastic consumption (including environmental externalities).
Provide a framework for traceable results-based accounting that can enhance monitoring and evaluation of plastic pollution initiatives and increase the accountability and transparency of impact reporting.
Marginalized groups, including the informal sector, can be recognized as an important stakeholder in waste management, opening the door to benefit sharing among actors.
We are seeing additional benefits of credits, such as incentivizing investment in capacity expansion for higher value processing and changing the unit economics of virgin plastic, which will ultimately encourage companies to use more recycled content and look for alternatives.
Through its network of partners, PCX Solutions provides a 3rd party audited, transparent, verifiable system of collecting, transporting, and processing plastic waste to prevent leakage into the environment, while providing all these benefits. PCX Solutions works with over 30 projects all over the world, which have a potential capacity of 250,000 metric tons of cleanup which can be deployed today. Projects registered under PPRS have already diverted over 100,000 metric tons of plastic waste from nature.

Addressing the challenges in an emerging industry
Plastic credits are in the early stages of adoption. The World Bank report highlighted several risks and challenges, which PCX Solutions strives to address:
1. Industry harmonization
The report notes that plastic crediting programs still vary in terms of quality and robustness, lack common definitions, and are not aligned on key principles. PCX Solutions actively contributes to industry-wide efforts to establish harmonized minimum requirements and standards.
We are part of the plastic credits working group under the PREVENT Waste Alliance, a multi-stakeholder partnership that brings together different actors from the private sector, academia, civil society and public institutions. Earlier this year, PREVENT published Guidelines on Minimum Requirements for Plastic Waste Recovery & Crediting Standards, developed by the plastic credit core-group, to help harmonize the market. These guidelines set minimum requirements for areas like governance, transparency, impact measurement, and additionality. We’re proud that PPRS is one of the few standards that meets or exceeds all minimum requirements laid out in the guidelines.
PCX Solutions is also engaged with other groups like the Plastic Footprint Network and the Innovation Alliance for a Global Plastics Treaty that are aligning on shared definitions and principles.
While plastic credits have major differences versus carbon credits, e.g. for the fact that plastic is a tangible material that can be easily measured, the plastic crediting industry is learning from the carbon market journey. The Integrity Council for the Voluntary Carbon Market (ICVCM) for example was established to standardize the quality of carbon credits sold on the voluntary market, and we at PCX Solutions would fully support a similar development for plastic credits.
2. Robustness of Plastic Credits
The report states that in the absence of alignment between programs and clear governance to ensure market integrity, the results of some plastic pollution activities may be double counted and not result in a net increase of plastic pollution management.
PCX has designed our model to maximize trust and transparency at every step of the process. PCX was one of the first to create a standard for plastic crediting in 2020 - and we work continuously to update and improve our standard to increase the level of credible and verified impact delivered by plastic pollution cleanup projects around the world.
All projects that issue credits under PPRS are audited twice - first, they undergo a conformity assessment by an independent third-party validation and verification body (VVB) to ensure the project meets the environmental and social impact standards laid out in PPRS. They also undergo another third party audit for impact verification when the credit is issued.
Every plastic credit transaction under PPRS is listed on a public registry including serial numbers and impact verification. This level of transparency and traceability is very robust compared to other plastic credit programs.
In June 2024, we launched Version 8 of PPRS after a thorough public consultation process, which provides better guidance on how projects can prove additionality through both qualitative and quantitative measures; increases the focus on social benefits while tightening safeguards; and elaborates on both the project registration and impact verification process for better transparency and accessibility.
3. Demand for Plastic Credits
One risk outlined in the report is that the current market demand for plastic credits is mostly voluntary and ad-hoc. And that a lack of sufficient, sustained, and predictable demand, and a risk of low prices for plastic credits could hinder project uptake.
Regulation and increased levels of trust are indeed key drivers of sustained demand for plastic credits.
In the Philippines where the Extended Producer Responsibility (EPR) law includes plastic credits as one mechanism to meet compliance we’re seeing a positive effect. In 2022 Manila passed an ambitious EPR Act requiring corporations with assets over US$1.7 million to recover and divert at least 20% of their plastic packaging footprint in 2023, 40% in 2024, a number that increases to 80% by 2028.
It is encouraging that projects were able to expand their capacity based on the growing demand. Credits are one tool in the toolkit under the country’s EPR law, providing built-in, regulated demand for plastic credits that is increasing over time. And the cost for the credits is an incentive for companies to reduce their footprint.
The approach taken by UN negotiators, who are working to adopt a Global Treaty on Plastic Pollution by 2025, can also play a critical role. We at PCX Solutions are advocating for the inclusion of plastic credits within the treaty as one financing mechanism, which would significantly increase trust and drive more sustained demand.

4. Corporate Claims
A very common, valid concern is that plastic credits may be misused for greenwashing and misleading corporate claims, and/ or as a disincentive to reduce plastic pollution given the absence of clear rules around plastic credit usage and claims.
Plastic credits do more than just fund downstream cleanup. At scale, credits can change the unit economics of plastic, encouraging more companies to adopt upstream reduction measures.
One of the big barriers that prevent companies from using more recycled content is the cost of virgin plastic, which in most countries and for most plastic types is lower than recycled feedstock. But in markets with EPR laws that require companies to take responsibility for their plastic packaging footprint that equation starts to change. The cost of credits for clean up and recovery becomes part of the cost of doing business, effectively raising the overall unit cost of plastic inputs. As the volumes grow under escalating EPR requirements the price gap starts to close - and businesses start to look upstream for better solutions.
Including plastic credits within EPR schemes and the global plastics treaty would provide a clear legal framework and national guidelines that reduce the risk of misuse and greenwashing, with clear rules of footprint measurement and disclosures.
PCX Solutions has also moved away from certifying net-zero or neutrality claims under the PPRS, as there is no global consensus on the terminology and methodology yet. Instead, we advise credit buyers to talk about the tangible, measurable impact of downstream collection and recycling activities, such as how many kilograms they’ve helped divert from nature.
5. Ensuring Inclusiveness
There is a risk that technical complexity, transaction times, and costs associated with the plastic crediting process (e.g. project validation and registration) may deter project developers, particularly marginalized informal workers, and small businesses, from benefiting from the mechanism.
The team at PCX Solutions is striving to ensure plastic credits are accessible for marginalized stakeholders and projects in emerging markets, which have been hardest hit by the plastic crisis. The waste management industry is often characterized by small and medium size enterprises that lack financial resources as they are considered ‘non-bankable’. We are working with VVBs to make the conformity assessment more affordable for smaller projects, are providing technical assistance and are actively exploring grant funding opportunities to support the onboarding of smaller project developers, encouraging the inclusion of a diverse range of projects.
The use of the PPRS standard is nearly free for projects, and they only pay a very small levy when credits are actually sold; so they don’t need to pay upfront as under other standards.
6. Upstream Reduction
The last outlined challenge is that plastic crediting programs currently focus on downstream solutions which could overshadow upstream plastic reduction measures.
PCX Solutions has recently signed the Bridge to Busan declaration to underline our position that upstream reduction is absolutely needed.
But the world has produced about 9 billion metric tons of plastic since the 1950s, of which only 9% has been recycled, 19% incinerated, and 72% landfilled, dumped, openly burned or ended up in the environment, with detrimental effects on our ecosystems and human populations. Even if we were to reduce production from today’s levels by 40% by 2050, the world would still produce another 11 billion tons that needs to be responsibly managed.
We need to clean up this legacy footprint which is already threatening our planet AND reduce the use of plastic upstream.
Efforts are underway to develop methodologies for different types of upstream outcomes-based financing mechanisms and credits to incentivize the use of alternative materials, refilling, reuse and more. They need careful considerations and ecosystem alignment to prove impact and additionality.
Summary
Through our PPRS standard, PCX Solutions is directly addressing the key risks and challenges outlined in the World Bank report. By aligning with industry-wide efforts to establish minimum requirements and focusing on high quality plastic credits, providing transparency through its registry, supporting regulated demand, moving away from certifying corporate claims, and exploring ways to support smaller projects and upstream solutions, the team at PCX Solutions is doing our part to help build a high-quality plastic credits market that can effectively finance plastic pollution reduction initiatives.
But change is a team sport. The whole ecosystem needs to work together to fully leverage the power of plastic credits to help tackle the plastic crisis.
1 Nordic Council of Ministers, 2023, https://www.norden.org/en/publication/towards-ending-plastic-pollution
2 The Circulate Initiative, 2024, https://www.thecirculateinitiative.org/plastics-circularity-investment-tracker/ and https://www.thecirculateinitiative.org/press-release/the-circulate-initiative-issues-call-to-action-to-financial-community-as-investment-gap-widens-to-meet-targets-to-tackle-plastic-pollution/
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