What the Hell Are “Plastic Offsets”?

Plastic is just about everywhere, piling up in streams, landfills and even our bloodstreams and placentas. The United Nations agrees that something must be done, given both the excess of waste and the considerable plant-heating emissions involved in producing it, almost entirely from coal, oil and gas.

Yet fossil fuel and chemicals companies see a great future in plastics. Both they and the companies that use these products are reluctant to find alternatives. So, as with greenhouse gas emissions, plastics polluters are now gravitating toward a scheme that would let them have it both ways: let them keep making and selling plastics while claiming to be part of the solution. That idea is plastic offset credits—which, according to supporters, offer the fantastical promise of “plastic neutral” plastic.

Plastic offset credits are modeled on carbon offsets: A company that uses or produces plastic can purchase credits that correspond to reductions in plastic waste elsewhere, just as drillers can buy up credits that correspond to patches of forest that will draw enough carbon down from the atmosphere to “offset” the carbon they produce. Purchasing credits is intended to create flexibility for companies that might need extra time to reduce their own emissions, whether to comply with government regulations—like in California’s cap and trade system—or voluntarily, as with airlines that promise carbon neutral flights. Third-parties, often non-profits, approve and monitor credit-generating projects to ensure they correspond to real-world emissions reductions.

That’s how it’s supposed to work, anyway. Carbon credit markets, however, now face intense scrutiny for fueling land grabs in the developing world, displacing indigenous communities, and furthering human rights abuses. Among the most damning research on carbon offsets shows that they simply aren’t very good at offsetting carbon, and simply grant polluters a lifeline to continue on with business as usual. An investigation published last fall by The Guardian and the nonprofit watchdog Corporate Accountability found that 78 percent of the top 50 carbon-offset projects are “likely junk.”

The third parties that approve credit-generating projects have also had their failures exposed. An extensive exposé by The Guardian, German newspaper Die Zeit, and SourceMaterial, a non-profit newsroom, revealed last year that at least 90 percent of credits generated in rainforests by the Verified Carbon Standard (VCS)—an industry leader, accounting for roughly two-thirds of credits on the voluntary carbon market—were “phantom credits” that didn’t respond to any real reductions in greenhouse gases. The NGO that administers the VCS is called Verra, and has vehemently refuted these and other allegations.

Verra—the world’s biggest issuer of carbon credits—is now one of the loudest voices pushing to expand plastic credits as means of dealing with plastic waste. Compared to decades’ old carbon markets, plastics crediting is a new and relatively small space, having only started up in earnest in 2021 via the 3R Initiative to use a “market-based approach that will scale up recovery & recycling activities and increase accountability for plastic waste reduction efforts.”

Verra is a “technical founding member,” providing expertise on accounting methodologies, auditing and registry management; “corporate founding members” include Danone and Nestle. Currently, just seven projects have received approval for inclusion in Verra’s registry, which the group’s website says is the result of “a rigorous development and assessment process.” Dozens of others are awaiting approval. Another exchange—the Singapore-based Plastics Credit Exchange—has already sold millions of dollars worth of credits, including (according to PCX’s website) to the Filipino subsidiaries of Nestle, Colgate-Palmolive Co. and Pepsi-Cola. Several smaller companies have popped up, too. Most projects involve funding either waste processing facilities or offering additional funds to waste collection efforts, like beach clean-ups or waste pickers in the informal economy. What this would actually do to reduce plastic waste, given that most plastic isn’t recyclable by any reasonable definition and seems to generate an abundance of worrisome microplastics when it is recycled, is unclear.

There are currently no industry standards for what these credit-generating projects should look like or how credits are issued. Evidence so far hasn’t been promising. A waste processing facility that was at one time registered by Verra and backed by Danone has been suspended from selling credits following allegations it’d been built too close to a Balinese community in Indonesia, Greenpeace investigative outlet Unearthed reported late last month. Verra suspended its accreditation of the project last May amid complaints from shareholders and residents, and is currently reviewing the project. It’s also reviewing another facility in Bali that had been registered with the group’s plastics program in December 2022; Danone has ended its support for both plants, but continues to back several processing facilities in Indonesia to further its pledge of recovering more plastic than it uses in the country by 2025.

Despite these troubles, the World Bank has granted its blessing to plastics offsetting, including for Verra-registered projects in Indonesia. Earlier this year, the pair announced a $100 million plastic credits bond to fund Verra-accredited plastic collection and recycling projects there and in Ghana. Verra, meanwhile, has been eager to ingratiate itself into ongoing UN negotiations over a legally binding treaty to end plastic waste, the fourth round of which wrapped up last week in Ottawa, Canada. “Investment in plastic waste collection and recycling infrastructure ensures that plastic waste downstream is recovered and recirculated, repurposed, or appropriately managed,” the group writes on its website. “Through the issuance of Plastic Credits to certified plastic waste collection and recycling projects, Verra’s Plastic Program drives finance toward activities that establish and scale this waste management infrastructure.” Neither Verra nor the World Bank responded to a request for comment on this article in time for publication.

Details of what a global plastics treaty might look like are still very much up for debate: Will each country have its own pledge to reduce plastic waste along a certain timeline, as in the Paris Agreement? Will the targets themselves be legally binding, or will countries only be mandated to set them? Which countries are going to pay for what? Advocates, though, are worried about the potential role that plastic offset credits might play, and possibility that rich nations will back them as a substitute for financing poorer countries’ efforts to end plastic pollution. Plastic offsets, critics argue, could also serve as an excuse for corporations and governments to continue on with business as usual.

“We have 30 years of experience with the carbon market and 30 years of seeing problems there. Verra, the World Bank and others are getting up on stages and saying there are no problems, everything works great and now we’re going to apply that logic to plastic because it’s been proven in so many other places,” says Neil Tangri, Senior Science and Policy Director at the Global Alliance for Incinerator Alternatives (GAIA). “There’s an absolutely steadfast refusal to learn the lessons of the carbon markets,” now, despite myriad controversies, a well-established part of emissions reductions efforts.

The two problems—plastic and greenhouse gas pollution—aren’t unrelated. A study published last month by Lawrence Livermore National Laboratories finds that the production of plastics currently accounts for 5.3 percent of total global greenhouse emissions, more than double the emissions created by aviation. It’s also growing rapidly; production could triple by mid-century. If every other sector were to somehow decarbonize this year, plastics production would still push the world beyond the limit outlined in the Paris Agreement, which was to keep warming “well below” 1.5 degrees Celsius. Plastic production would blow through the emissions required to keep that goal in reach—known as a carbon budget—as early as 2060, and by 2083 at the latest. To “keep 1.5 alive,” as U.S. politicians like to say they are doing, primary plastics production would need to decrease by between 12 and 17 percent per year, starting this year, per an analysis of the Lawrence Livermore study by Tangri, who served as an expert reviewer on that report.

Not unlike UN climate talks, the UN’s plastics treaty negotiations have attracted a steadily growing crowd of corporate interest with a vested interest in making sure that doesn’t happen. The UN handed out 196 passes to fossil fuel and chemical industry lobbyists at the Canadian talks last month, up 37 percent from the meeting held in Nairobi last November, according to an analysis by the Center for International and Environmental Law. Industry interests had a larger overall presence in Ottawa than the 180 delegates from countries in the European Union; they outnumbered delegates representing Pacific Small Island Developing States two to one.

While the negotiators’ purported goal to “end plastic pollution” might seem to imply some overall reduction in the amount of plastic being produced, plastics producers and the countries in which they reside aren’t keen on that. The United States, joined by Gulf oil producers, Russia and China, have sought to avoid talk of concrete targets for reducing primary polymer production, preferring to focus on waste management. “The United States has systematically tried to derail the process,” says Dharmesh Shah, a senior campaigner at CIEL who attended the talks. “They’re doing things that are extremely problematic on the issue of production and reduction, especially.”

Fossil fuel-producing countries’ and corporations’ emphasis on waste management aligns well with the promise of plastics offset programs: essentially, to offer financing to waste management efforts in the Global South. Even rich countries with robust waste management infrastructure, though, have not managed to overcome the fact that very little plastic can actually be recycled. Less than 10 percent of plastic waste has ever been recycled, and so-called “advanced” or chemical recycling have struggled to stay afloat amid massive costs and technical issues. The New York Times reported last month that one such facility in Indiana—which aimed to recycle 100,000 tons of plastic a year by 2021—had only ever recycled 2,000 tons of plastic as of late 2023. Part of what makes plastics recycling so difficult is that the term plastics refers to a wide range of chemical polymers which cannot be processed together; for some of those materials, recycling is virtually impossible. Much of what waste managers in the United States can’t deal with here is shipped abroad, to many of the places where plastic credits are being generated.

“The reason that the Global South doesn’t have adequate waste management is because it’s being flooded with plastic. No waste management system in the world does a good job with plastic. We pour billions of dollars into waste management, have door-to-door collection and are still the top source of plastics in the ocean,” Tangri says of the United States. “The notion that you’re ever going to be able to catch up with plastic waste generation that’s growing by 4 percent every year is absurd. Thre’s not enough money in the world to catch up with that.”

Among the biggest concerns with plastic offsetting, Tangri adds, is the concept of additionality. Credits, that is, are premised on the idea that their sale is financing projects that wouldn’t happen otherwise. A recent report Tangri co-authored with colleagues in the Break Free From Plastics campaign shows that 83 percent of projects applying for approval by Verra have been in operation for over a year, and will receive retroactive credits for waste collection efforts that are already underway. Forty-two percent of projects in that queue have already been operating for 5 years or more.

“If you’re paying people to collect waste that they were already collecting, is there anything that they’re going to start collecting more of that they would otherwise leave behind? It’s very unlikely. If there’s no market for black plastic then they’re not going to pick it up,” says Tangri. “You’re giving a bit of money to someone who otherwise wouldn’t have it, but the problem on the other side is that you’re selling that plastic credit to some company in the Global North which is now claiming plastic neutrality.”

Focusing on what happens to plastics after they’re already made, moreover, doesn’t address the fact that roughly 75 percent of the of the greenhouse gas emissions generated by plastics production, researchers at Lawrence Livermore find, are created prior to polymerization, i.e. to actually making finished plastic products. Neither does it deal with the abundance of rare cancers, breathing difficulties and numerous other serious health conditions that people who live fenceline with petrochemical plants have been forced to deal with. “The environmental risks of plastics are manifold and they happen throughout the life cycle,” Shah told me. “This is just an approach that is designed to delay or distract from the real issue which is production and reduction. We cannot solve the plastics crisis without reducing our production of plastics.”