Sustainable Solutions: EPR Credits in the Plastic Recycling Industry

Waste generation is rapidly increasing worldwide, in particular plastic and packaging waste. Collecting, sorting, recycling, and disposing of waste is a costly endeavor. For many municipalities, the costs are higher than the revenues that can be made from selling recycled materials. Only 9% of plastic waste is recycled – the rest is incinerated, landfilled, dumped, burned in open pits, or ends up in land and water bodies where it breaks down into smaller pieces and microplastics, posing threats to animals and humans alike.

The concept of "plastic credits" is receiving a lot of attention and presents important opportunities for financing circular plastic systems. The introduction of EPR systems and waste prevention incentives, which are essential pillars for the sustainable use of plastics, as well as uncoordinated and unregulated plastic credit schemes, all pose risks.

A plastic credit is a transferable unit representing a specific quantity of plastic pollution removed from the environment and/or put into the circular economy (i.e., collected and/or recycled) in excess of what would have happened in the absence of the credit-generating activity (i.e., business as usual).

How do credits aid in legal compliance for businesses?

The EPR framework affects large, medium, and small manufacturers in different ways:

• Small manufacturers pay EPR fees to local businesses, who then recycle a portion of the waste they produce.
• Medium-sized manufacturers employ skilled firms or individuals to manage their waste and bargain for them in financial agreements.
• Large manufacturers send plastic and waste to recycling facilities when they apply for credit. Additionally, it makes it possible for the company to comply with rules without having to handle waste management.
• With the help of EPR credits, producers and manufacturers can combine environmental, economic, and social factors. Instead of having to handle waste management, the company can abide by the rules by offering credit.

Why Plastic Exchange?

As per government guidelines, there is now a Plastic Waste Rule (PWM 2022) that’s applicable to all Producers, Importers, and brand-owners (PIBOS) to retrieve & recycle their plastic packaging after selling products to market (Extended Producers Responsibility – EPR). The retrieval of plastic waste happens through informal channels, waste management agencies & recyclers. PIBOs would need to procure such Plastic Credits Unit (PCU) from those agencies that are not known to PIBOs but have to be compliant with the PWM 2022. This creates a huge gap in the industry between buyers and sellers of plastic credits and, thus, the need for Plastic Exchange – a platform for trading plastic credits that closes this gap and brings stakeholders together in a transparent and seamless interaction.

Plastic Credit Scheme

There is an urgent need to take steps to reduce the current plastic footprint and, in turn, stem the tide of plastic pollution and its leakage into the environment, especially since there is a large amount, different usages, and diversity in types of plastic materials used. It is also important to analyze all possibilities to eliminate, design out, and minimize unnecessary and avoidable plastic, plan products for reuse and recycling, use sustainable or recyclable material within products, and improve the end-of-life management of waste, including the adoption of alternatives such as EPR schemes and plastic credit projects to effectively deal with unavoidable plastic waste. There are systems that could be applied to stimulate the recycling of dry materials and provide more upstream solutions via recycling where EPR schemes are not yet in place. This is where recycling credits, especially plastic credit systems, can bridge the gap

The goal of the Plastic Credit Scheme

• Increasing the number of plastics being recovered through collection and recycling; collecting and aggregating specific types of packaging.
• Subsidizing informal and formal recycling of low-grade plastics or those that are economically unviable for recycling.
• Financing collection and recycling infrastructure.
• Subsidizing capture of conventional recyclables in low- and middle-income countries where landfill gate fees are too low to provide a financial incentive for recycling by payment of an additional fee per kg of plastic recovered through the program.
• Reducing leakages and losses of plastics (to water) by rewarding or financing other forms of management.
• “Pushing” non-recyclables towards controlled disposal, recycling, and energy recovery, and reducing open burning and open dumping.
• Mobilizing funds from high-income economies and global consumer goods and packaging companies, to create a targeted and dedicated supplemental income stream to co-finance solid waste management in low- and middle-income countries

Implementing plastic credit schemes

There are several aspects that need to be considered when planning, designing, and implementing plastic credit schemes, such as whether it is to be compulsory or voluntary – compulsory schemes, if designed right, can be potential substitutes for EPR schemes; voluntary schemes, without a clear framework, pose a high risk of greenwashing as a result. The process of issuing credits – validation, certification, issuing, and other measures leading to the issuing of credits – must be transparent, with an independent third party responsible for auditing them. The traceability, validity, and tracking of credits must be determined, as well as to whom and how/when they can be sold. And most importantly, plastic credits should be a transitional and preparatory solution for EPR systems to be implemented.

CPCB and Plastic Credit

In order to issue a credit system based on EPR, the CPCB launched a portal in 2019 that brought PIBOs and PWMs together. This portal is essential because it makes many of the conditions necessary for a credit system implementation successful. For PIBOs and PWM organizations, which serve as buyers and sellers of the credits, the portal offers a centralized platform. The platform can make it possible to regulate the trade in plastic credits, and it will also help determine the best way to optimize the system and secure funding for PWM that is more effective and efficient.

The amount of plastic they are producing, the types of plastic they are producing, and the subsequent recycling activity for each plastic type can all be measured and registered by PIBOs in India. This facilitates credit generation, guarantees an extensive quantification of plastic waste management activity, and contributes to more effective and realistic plastic credit incentives.

Plastic Credits and Waste Prevention

Waste prevention, either quantitative in terms of amounts of waste or qualitative with regard to the hazardousness of waste, is the top priority of the waste hierarchy as one of the guiding principles. Only if waste generation cannot be avoided, the remaining waste should be prepared for reuse, recycled, incinerated, or, as the least preferable option, landfilled.

Plastic credit systems should always be designed in a way that they do not undermine incentives for waste avoidance for any stakeholder alongside the value chain; plastic credits should never give an alibi to postpone the necessary “transformational change” for plastics.

Plastic Credit and Sustainable Waste Management Practices

The generation of waste is growing in quantity and complexity, but the absence of sustainable waste management collection and treatment is a reality in many parts of the world – it is estimated that over a third of the world’s population lacks basic waste management services. In this situation, people need to manage or dispose of their own waste, which includes open burning or dumping on land and in water bodies, as a direct result of the absence of municipal solid waste management services. Plastic credit strategies can play an important role as part of a comprehensive and sustainable waste management system by helping to provide much-needed financing for collection and/or recycling infrastructure that is not available through existing resources, such as for corporations to fund high-impact community clean-up projects, particularly focused on plastic wastes that are currently not being collected or are not part of the recycling system. In order to be functional, as it focuses only on a specific material, plastic credit systems need to be part of a holistic waste management system, with all infrastructures and services available and implemented, dealing with the different waste streams generated.

On the other hand, extended producer responsibility (EPR) is a permanent structure available in the different regions to create adequate governance to deal with post-consumption packaging waste. Thus, plastic credits should not be seen as a low-cost alternative to producers of plastic taking actual responsibility for their products and packaging. However, plastic credit schemes have the potential to jump-start and complement EPR schemes while they are being developed.

Challenges in EPR Credits from Plastic Recyclers

With ample evidence that EPR systems effectively contribute to reducing packaging waste in the environment and allow the setting up and financing of reliable and systematic waste management structures to ensure that waste is collected, sorted, and treated, it should be avoided that plastic credit schemes undermine or contradict existing or future EPR systems:

Offsetting Plastic Pollution

There is a risk that offsetting plastic pollution by buying credits can normalize patterns of production as well as consumption that are clearly unsustainable and will lead to massive impacts on the environment or human health – especially if companies are not effectively obligated to prove the additionality of this measure.

Initial Investments

Plastic credits can easily be seen as the easy way out, as they simply require paying someone for a specific service. On the other hand, effective prevention solutions often require the involvement of various stakeholders and take more time and initial investments. Nevertheless, they are, in most cases, the optimal solution in the long run.

Implementation of Reuse Systems

The implementation of reuse systems might be affected by plastic credits when collectors would profit from handing over reusable packaging as waste. Whenever waste prevention requires specific infrastructures – like in the case of reusable packaging systems, there is the risk that credits will not contribute to investment in such infrastructures but rather exploit the situation to generate revenues. Consideration of reuse can be integrated into the design of plastic credit schemes, too often this is not the case.

Benefits of EPR Credits from Plastic Recyclers

EPR Credits from Plastic Recyclers have benefits that could be beneficial not only for business but also for human health

Encourages Environmental Responsibility

EPR credits encourage producers to actively engage in sustainable waste management practices, minimizing the negative environmental impacts of their products and encouraging a circular economy.

Encourages Recycling

Producers are encouraged to invest in recycling infrastructure and technologies in order to meet EPR credit targets, resulting in higher recycling rates and reduced waste landfilling or incineration. EPR credit models further encourage sustainable consumption and production patterns, paving the way for a more sustainable future through waste reduction and resource conservation.

Involvement of Stakeholders

EPR credit systems frequently involve collaboration with local communities, waste pickers, recyclers, and other stakeholders, resulting in partnerships that improve waste management processes' efficiency.

Financial Incentives

EPR credits can translate into financial incentives for consumers. By understanding how the credit system works, consumers can actively participate in recycling efforts, ensuring they receive financial rewards for their eco-friendly behavior.

Monetary benefits

Plastic credit schemes have proven to be very effective when it comes to gathering money for setting up new collection and recycling infrastructures and engaging local actors in the collection and sorting of waste.

Importance of Plastic Credit

Plastic credits are an emerging new financing approach without a common definition or standardized processes, making an all-encompassing assessment difficult. Nonetheless, they can represent a meaningful alternative solution in countries where EPR systems for packaging are still a long way off. They can demonstrate that producers are willing to take responsibility and provide funding for projects while no other funding mechanisms are in place.

They could further contribute to building up relevant infrastructures of collection and recycling as well as data and monitoring frameworks to facilitate the tracing of materials and verification of effective collection and recycling of plastic waste as well as payments made to different stakeholders in the plastic waste value chain. In exceptional cases, they can also represent a complementary or even integrated instrument to an obligatory national EPR mechanism (such as foreseen in India).

In order to be able to integrate plastic credit schemes effectively as one way to fulfill EPR obligations, the schemes need to report transparently to national EPR/ plastic waste registries or monitoring entities, be open to collective EPR schemes such as PROs, and subject themselves to monitoring systems of national authorities.

How can Corpbiz assist you?

Corpbiz promises to uphold transparency while providing you with full support for EPR credit from Waste Recycler. To receive EPR credit from Waste Recycler at your convenience, use Corpbiz's unmatched services. We assist people in obtaining EPR authorization by providing specialized services. Our team of experts deals with these problems, provides truthful guidance to our clients without embellishing the facts, and provides the certificate and license within a reasonable amount of time. Corpbiz provides -

• Affordable Price for EPR Credit

Corpbiz offers EPR Credits to producers at the most affordable prices through its wide network of recyclers. This credit covers the producers' annual EPR obligations. You have the freedom to select the recycler of your choice if you choose Corpbiz's services.

• Legal Backing for CPCB Notices

Our skilled legal team takes care of your legal issues. If you have received any legal notices or CPCB inquiries, you shouldn't be concerned because our staff will be with you every step of the way.

• Management of the Online EPR Portal and Annual Filing

You must provide information about your yearly sales, purchases, and recycling to the Central Pollution Control Board's online EPR Portal. Corpbiz oversees the management of your EPR Portal and makes sure that annual returns are filed on time as needed.