• 13. September 2021
ValuCred publishes the report “Plastic Credits – Friend or Foe? Retrospective of recent market dynamics” as one of the first milestones of the PREVENT pilot project team working on an inclusive and transparent circular economy model.
Plastic Credits are an innovative market mechanism to provide a sustainable source of income for low-income groups in developing countries that engage in waste collection of plastics and its recovery and recycling. As part of the PREVENT pilot project team working on Plastic Credits, ValuCred, a consortium led by Yunus Environment Hub, Nehlsen & Rodiek and BlackForest Solutions, has now published a discussion paper that analyses the current market dynamics and gives recommendations for the further work around the emerging Plastic Credit market.
According to ValuCred, systematic improvements of waste collection and treatment services are urgently needed to build a circular economic model that is inclusive, transparent and sustainable. Infrastructure and adequate remuneration for all workers along the waste value chain are significant building blocks for this. Plastic Credits can serve as new financial instrument to help disadvantaged countries fund these projects.
In its most recent report, based on extensive market research in 2021, ValuCred shares the results of an analysis of different voluntary standards, and ValuCred’s perspective on and innovative impulses for the emerging Plastic Credit market. Most importantly, the report calls for a paradigm shift: the integration of aspects of social justice and transparency in the accounting mechanisms of Plastic Credits. ValuCred states that if implemented sustainably, Plastic Credits have the potential to serve as a financial instrument to provide a lasting source of income for low-income groups such as informal waste workers in developing countries. The consortium calls for a more ambitious target to “ensure living wages for all”.
According to the ValuCred team, a new approach is needed to calculate and valorise Plastic Credits in a transparent way. For this reason, ValuCred is developing a standardised process model (SPM) that can be replicated internationally and will be supported by digital solutions.
ValuCred is part of the PREVENT pilot project team “Plastic Credits for inclusive and transparent circularity”. The project aims to establish Plastic Credits as a robust market mechanism, linking formal and informal waste recovery and recycling projects worldwide with companies and investors willing to support these project activities through performance-based payments and ensure their long-term financial sustainability.
The ValuCred report highlights voluntary standards in terms of their social aspects. In the upcoming months, the PREVENT subworking group on plastic credits will additionally publish a paper on Plastic Credits that explores their potential in the context of Extended Producer Responsibility (EPR).