PREVENT at Plastic Free World Conference | Innovative financing mechanism for waste management – Plastic Credits: Risks & Opportunities

Cologne, Germany • 10. November 2021 11. November 2021

PREVENT at Plastic Free World Conference | Innovative financing mechanism for waste management – Plastic Credits: Risks & Opportunities

In November 2021 at the Plastic Free World Conference in Cologne, Germany, the PREVENT Waste Alliance facilitated a panel debate discussing the risks and opportunities of plastic credits with the Yunus Environment Hub, Rodiek & Co Gmb/Nehlsen AG, BVRio and the Wuppertal Institute. Further opportunities to get insights into the work of PREVENT were offered at an exhibition booth, during a panel discussion on Extended Producer Responsibility (EPR) and at a members’ meeting.

Panel discussion on Plastic Credits organised by PREVENT

As reaction to the plastic pollution, plastic credits are emerging as a new means to finance plastic waste management in low- and middle-income countries through performance-based payments. The concept is taken from the climate change mitigation realm, where carbon credits are used to reduce carbon emissions in an economic manner. Notwithstanding some success of carbon markets, Ina Ballik with her 15 years of experience in these markets, questioned whether it was really “the right place for inspiration” as plastic pollution comes with its own, very specific local problems. Instead she proposed to frame plastic credits as voluntary responsibility scheme paving the way towards legally binding Extended Producer Responsibility (EPR) schemes.

Extended Producer Responsibility (EPR) is an environmental policy approach, based on the ‘polluter-pays’ principle, in which whoever introduces packaging to the market is responsible for the financial cost of their products after they become waste. EPR is a complex mechanism that can take years if not decades to be set up. Plastic credits, so the consensus by the PREVENT members, can act as “bridging mechanism”, Dr. Henning Wilts, Director for Circular Economy at the Wuppertal Institute, explained. To increase their acceptance as bridging mechanism, Claudia Bunkenborg, Head of International Business at Nehlsen, elaborated “actors behind plastic credit schemes should reach out to all stakeholders, pursue credible monitoring of their activities and proactively participate in the development of harmonised criteria”.

Henning Wilts coordinates the sub-working group on plastic credits and EPR in the PREVENT Waste Alliance. The state of the discussion has just been published in the discussion paper “Plastic credit schemes and EPR – risks and opportunities“.

In the PREVENT several project partners have further come together to pilot “Plastic credits for inclusive and transparent circularity” since the beginning of 2021 as reliable financial instruments to help countries finance systemic improvements of their waste collection and treatment services. As one component, ValuCred is developing a standardized processthat can be replicated internationally and will be supported by digital solutions, Claudia Bunkenborg explained. As a first milestone, ValuCred recently published the report “Plastic Credits – Friend or Foe? Retrospective of recent market dynamics” and its five key recommendations for the emerging market were presented prior to the panel debate by Ina Ballik. Iulia Pojum, project manager at BVRio is co-leading the sub-project aiming to “improve the Circular Action Hub as trading platform for credits, which are used to pay waste pickers for the service of waste collection and recycling”, she stated.

Beyond operational impacts, such as reduced pollution and funding towards infrastructure investments, plastic credits can also result in social benefits, Iulia pointed out further in the discussion. They create an additional revenue stream for the waste workers, which makes them more resilient to the price volatility of recyclables. Plastic credits can help waste pickers to expand their operations, creating more jobs for the local community. However, there is a lack of harmonised definitions, as well as reliable and transparent monitoring standards which bear a certain risk for green washing. Ina Ballik, therefore, calls for a governance framework that should be “ideally taken on by a UN body or one of its institutions” that will add some gravitas to this young market and provide an enhanced level of certainty that is needed by private sector investors.

All panellists agreed that given increasing amounts of waste, just improving the management and recycling of waste is not enough. Iulia Pojum emphasised that “plastic credits cannot be the sole solution”. Companies should also take other measures to reduce their plastic footprint. Henning Wilts called for “specific targets for waste prevention” to complete the picture towards a full circular economy.


Panel discussion on EPR

Another focus of PREVENT’s recent work on plastic was presented at a panel discussion organised and moderated by the Extended Producer Responsibility Alliance (Expra): Joachim Quoden (Expra), Xin Chen (WWF Germany) and Nicole Bendsen (PREVENT Waste Alliance) discussed about Extended Producer Responsibility (EPR) as a sustainable model to ensure proper treatment of plastic packaging.

In this regards, Nicole Bendsen highlighted the multi-stakeholder dialogue that is necessary for establishing EPR systems and is also supported by the PREVENT Waste Alliance. Additionally, both she and Xin Chen, pointed out the EPR Toolbox developed by PREVENT. The toolbox is used in WWF’s MOOC and in trainings worldwide in order to disseminate knowledge on EPR for packaging including universally applicable elements as well as country examples.


Networking with potential partners and among members

Throughout the whole conference, the exhibition booth of the PREVENT Waste Alliance served as a contact point for both members as well as exhibition visitors. Representatives from various organisations were able to get insights into the work of PREVENT and members used the exhibition booth as meeting point for networking with fellow members which also continued at a members’ meeting in the evening.


Article by Mira Nagy and the PREVENT Waste Alliance Secretariat

(c) Pictures: PREVENT Waste Alliance