Plastic offsets could be part of the solution to reduce plastic waste – but plastic neutral claims are risky.
Plastic credits have gained traction as one of the solutions to address plastic pollution. Modelled on carbon credits, they are broadly defined as measurable, transferable assets representing one tonne of plastic diverted or recovered from the environment. Two types of activities are currently credited, noted academics in a recent paper for the journal One Earth: collection and recycling.
These credits have the potential to drive investment into circular systems, according to WWF, but without the proper safeguards in place, plastic crediting ”has the potential to create extensive greenwashing and derail legitimate efforts”.
With such schemes likely to be a topic debated at the Global Plastics Treaty talks next month, Sophie Tuson from law firm RPC explains the role plastic credits could potentially play in reducing pollution, as well as some of the risks food companies must be on the look out for.
Plastic credit schemes do not have widespread traction in the UK. With rising costs, the introduction of extended producer responsibility (EPR) and the upcoming deposit return scheme (DRS) for single-use drinks containers, UK companies are prioritising mandatory compliance with environmental laws over voluntary ESG investments. Many remain cautious about the use of plastic credits while there is no harmonised global standard in place to ensure their integrity. Instead, many companies are focusing their efforts on redesigning packaging for recyclability and supporting waste collection projects overseas in countries with less developed waste management systems. Whilst some businesses might contribute to plastic reduction programmes, going beyond minimum UK legal requirements, they are hesitant about plastic credits due to perceived risks around greenwashing.
EPR could reduce the demand for plastic credits. In the UK, EPR now requires producers to pay new fees to cover the full cost of recycling their packaging waste. This funding is intended to drive broader infrastructure improvements in the UK recycling system. EPR therefore offers a more systemic approach than project-based plastic credits, whose prices typically depend on market forces of supply and demand rather than actual waste management costs. EPR fees are creating additional financial pressures for businesses meaning many have fewer resources to invest in other schemes like plastic credits. The upshot is we may see a reduction in plastic credit use in the UK.
Plastic credits could be part of the solution. However, plastic credits could still be used alongside compliance with EPR and other producer responsibility regimes to support plastic waste reduction – particularly overseas. This is important given the global nature of plastic supply chains and the fact the UK’s EPR regime only addresses UK packaging waste. Against this backdrop, plastic credits can be a powerful way to drive much needed finance to countries without well-established waste management systems and support informal waste pickers with stable income.
Avoiding greenwashing risks. If businesses purchase plastic credits, they must communicate these carefully to avoid the risk of inadvertently ‘greenwashing’. UK consumer regulators are increasingly scrutinising green claims, with the DMCC Act giving the Competition and Markets Authority (CMA) the power to impose fines of up to 10% of worldwide turnover for misleading green claims. Offset-type claims are particularly high risk – carbon offset claims have faced major backlash – and in due course, ‘plastic neutral’ claims could likely face similar scrutiny. If brands do make plastic neutral claims based on the use of plastic credits, they must tread carefully. UK consumer law requires brands to clearly explain what plastic neutral means, specify how much of their plastic footprint reduction comes from their own operations versus offsets, be transparent about any offsetting schemes used, and ensure claims can be robustly substantiated.
Do your due diligence. All green claims must be substantiated and robust due diligence is essential – you should verify how waste collection is measured and validated before making a claim about the use of plastic credits. Litigation risks around plastic waste are rising, with companies increasingly targeted for lacking robust plans to tackle plastic pollution in their supply chains. This is expected to grow as more countries introduce supply chain due diligence and sustainability reporting legislation requiring companies to report on, and mitigate, adverse environmental impacts across their supply chains – including plastic waste.
For companies, demonstrating serious action on plastic waste is critical. Plastic credits could be part of the solution but they should complement broader efforts like packaging redesign and supply chain management.
Sophie Tuson is senior associate and environment and climate change practice Lead at RPC.
