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PCX Speaks at Sustainability Week Asia

How do we move towards a Circular Economy in Asia? What role do companies play in that? And what have organizations done to drive the sustainability agenda?

PCX founder and chairperson Nanette Medved Po joined a panel during The Economists’ 2nd Annual Sustainability Week Asia held in Singapore highlighting that the decisions corporate leaders make now will either contribute to or turn the tide on the plastic pollution crisis. And this is exactly where PCX comes in. We help corporations reach Net Zero Plastic Waste through the use of plastic credits powered by blockchain technology–with the primary goal of making sure no plastic waste ends up in nature.

Q: What’s driving the pressure for change and circularity?

I think that even with the recent push for Extended Producer Responsibility regulations, a lot of companies are really interested in doing the right thing. We hear the demonization of the private sector quite a bit and sometimes it is reasonable. But when we talk to the new generation of leaders in companies today - those that weren’t the people that created this problem because these decisions were made when information wasn’t complete - many of them are interested in being part of the solution. And we’re super excited about this because PCX has benefited from that enthusiasm.

Q: What are the barriers that you are facing in introducing a circular economy for plastics?

Developing countries don’t have the infrastructure, whether it’s collection or processing, to deal with their plastic waste. It helps that many countries, including Singapore, are looking at EPR which will provide the support that is needed in this space. Because even if brands make all the investments to ensure their packaging is recyclable, whether or not these actually get recycled is a completely different story. If it’s not met with the infrastructure that’s required to deliver the whole “circular economy” that we keep talking about, it’s all for naught. A lot of things need to happen.

While the governments are moving on policy, infrastructure needs to be built, and waste needs to start getting collected and sorted. This is a big challenge, especially in developing countries where the waste management is very fragmented. In the Philippines, as in other developing countries, we found that market-based systems work. We’re not necessarily relying on the government to deliver because they’ve got a whole bunch of competing priorities. But if you come in with a market-based system, money talks. It is amazing to see how communities will start to develop the systems needed - the value chains to start the flywheel of circularity.

Q: Where do plastic credits sit in terms of the circular economy? What role do plastic credits play in reducing that waste ending up in a landfill?

One very important thing to note is that a plastic credit is not issued until after the impact is delivered. And there is no question about the amount of impact actually being generated or whether or not it is additional - which is sometimes the criticism levied against carbon credits. Because unlike carbon, plastic is a tangible material. Anyone can go out and collect 10 kilograms of plastic waste, weigh it, document it with photos, drive it to a recycler or processor and check what they do with it. The entire process is transparent and verifiable. At PCX we only consider those project credits which clean up and divert plastic waste from nature and landfills.

Q: Why do we need to switch to a circular economy?

We simply have no choice. We are burdening both people and planet to an extent that we can’t sustain anymore. It’s really important we take seriously the move to circularity.

Q: What’s driving the pressure for change and circularity? Is it the consumer?

For plastics, it’s probably three or four factors: Extended Producer Responsibility laws and other regulatory tailwinds is one. There are about 60 countries around the world that are in some stage of EPR. The UN Plastic Treaty in 2025 is likely to accelerate this. Second, consumers are demanding more and more that companies reflect their values. The pressure is real, especially on social media. And third, we see that investors are increasingly looking at ESG in their investee companies. In some cases it unlocks some liquidity that wasn’t previously there.

Q: It’s not easy to retrieve plastic waste. How did you retrieve waste tires? What was the process after that? How do you smooth out that supply chain? Perhaps you can build on that, bringing these solutions to scale.

To be honest, our experience with tires was by accident. In the Philippines, where our story started, we set up a waste-to-cash program within villages to buy plastic from the community. We had originally bucketed used tires in “other plastics” because 23-24% can technically be considered plastic due to its synthetic material. What we found was that about 54% of our initial collections were old tires. This was because tires are heavy and so it was the fastest way for the villagers to make money. We then decided to collect data on where the used tires were historically winding up and found out that many were dumped in the ocean or being openly burned. So in the process of tracking this data and running this program we wound up with study that turned out to be quite beneficial to the logistics sector. We believe there is a meaningful opportunity here to address the used tire pollution problem.

Q: Who foots the bill for collection? We do have very successful examples of pilot schemes around the region doing brilliantly, but the scale is needed and that requires a huge amount of investment.

Plastic credits or offsets are basically a producers pay instrument. When we started, credits were purely voluntary and we managed to clean up over 32 million kilos of post consumer plastic waste in a very short period of time through the commitments of brands who are seriously looking at sustainability and wanted to do the right thing. Now that we have entered compliance in some markets, commitments are picking up at a much faster click. The brands who have been with us for the past years, some of whom have gone beyond gov’t requirements and have offset 100% of their footprints, are just sailing into compliance knowing it will not break the bank. We are starting to see scale for some projects becoming real. This is very encouraging.

Q: What actions are governments taking concerning landfills in terms of preventing waste from accumulating in the first place? Landfills can be mismanaged which leads to more mismanaged waste and marine pollution. Have you seen any positive steps being taken in the region to improve landfill management?

It really depends on the geography. In many developing countries landfilling is just open dumping at worst and mismanaged waste storage at best. We don't see a lot of progress on this front given all the competing priorities at both the national and local government levels. This is partly why we are not interested in working with projects that send waste to landfills. There are however bright spots like Singapore who take waste management very seriously and are always looking for ways to improve.

Q: You made a comparison between plastic credits and carbon credits earlier. I think it's fair to say that the problems facing plastic credits are least similar to carbon credits when it comes to incidences of fraud and legal disputes. So how do you build traceability and trust into the plastic credits system to ensure that the plastic credits marketplace doesn't go down the same road as carbon credits?

I came into the plastic credit space as a skeptic. I sit on the board of WWF Philippines and we're very concerned about what's happening in the carbon credit space. So when I had to think about solving our own plastic footprint at HOPE, I had to think about this question: “How do you guarantee that you’re not just making the same mistakes that carbon made, in plastics?”

As a result, we developed the very first standard in the world for plastic offsetting, addressing specifically the criticisms in carbon – traceability, transparency, additionality, and double counting. I took a view on this as an environmentalist. In a perfect world, what does the standard look like and how can we track it? At the same time, because we weren't confident in how things panned out in the carbon space, we also made sure that the credits were not tradeable. We like to say that credits are the only single-use product that we approve of. When a company buys a plastic credit to offset their footprint, it immediately gets retired. We built in a lot of safeguards that we didn't see in carbon, hoping that we could start to build some confidence around this particular, more traceable instrument.

One way we achieved this was by building our credits on the blockchain in partnership with the Microsoft Innovation Lab. I’m not a tech person but this is the application that blockchain was made for: traceability. We can document where the plastics come from, how much was collected, what kind of plastic, the weigh-in and the weigh-out of the truck at the processors, what they did with it, and how environmentally compliant are their operations. This is not the silver bullet for solving plastic pollution. But it is certainly an important part of the toolkit that we need to be thinking about. Because as much as we are talking about R&D and alternative materials, there is always going to be a part of plastic usage that is essential. So If we have to operate using plastic, how do we take care of it once we're done using it?

Q: Which countries in the Asia-Pacific region are leading in fostering an environment towards a circular economy, and which countries are falling behind or need the most help? What are the types of things that could be done to foster that environment further?

I believe Singapore is one of those countries approaching the issues correctly. I don’t think even they would say they have the perfect solution, but they are very pragmatic and are certainly in the mode of constant improvement.

Visit this article on PCX's LinkedIn page here.


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