By Natasha White
(Bloomberg) — Some of the world’s largest consumer goods companies are boasting about a new environmental pledge: “net zero plastic” or “plastic neutrality,” meaning their companies don’t contribute to plastic pollution.
As with the more familiar “carbon neutrality,” it’s not as simple as it sounds, because of course companies haven’t eliminated plastic from their manufacturing process. Instead, like carbon emitters, some companies resort to offsetting, a credit that in this case is supposed to represent a tonne of plastic waste collected and processed by a third party elsewhere in the world.
Currently, the plastic offset market is small, dominated by Singapore-based PCX Markets’ Plastic Credit Exchange, which is only four years old, but it is set to grow as industry groups push for the inclusion of plastic credits in a new binding global treaty on plastic pollution being negotiated in Nairobi this week. Among those groups is emissions trading giant Verra, which has its own fledgling plastic credit program.
In recent years, PCX has sold millions of dollars worth of plastic offsets – mostly in the Philippines, where the company’s key partners are based and the government explicitly encourages the practice. According to PCX’s website, they have been issued to the Philippine subsidiaries of Nestlé SA and Colgate-Palmolive Co., as well as to Pepsi-Cola Products Philippines and numerous other companies. In some cases, they have formed the basis for “plastic neutral” declarations, and PCX also certifies “net zero plastic” brands.
Nestlé Philippines said in a statement that it enters into direct partnerships for plastic waste collection without generating, issuing or trading plastic credits. The company declined to comment on whether it has received credits from PCX.
In total, PCX says on its website, it has facilitated the removal of more than 32,000 tons of plastic waste, the equivalent of about 230 blue whales’ weight. But a new analysis by investigative nonprofit Source Material and reporters from the Philippine cooperative Cover Story shows that most of this material is sent to cement factories to be used as fuel – a process known as co-processing.
The environmental benefits of handling plastic waste in this way are unclear. PCX’s own analysis suggests that the emissions savings from the fuel switch are very small, most of which come from avoiding emissions from transporting imported coal. It depends on the cement factories’ pollution controls and the exact type of plastic burned, but the difference in CO2 emissions is “probably negligible,” says Ed Cook, a researcher at the University of Leeds who studies plastic waste.
“Basically, you’re just burning two different carbon sources,” Cook said.
Proponents of co-processing argue that it helps keep plastic waste out of landfills and the world’s waterways. Many countries, including in Europe, the U.S. and the U.K., allow and encourage this type of processing of household or plastic waste, and International Finance Corp.’s first green loan in Africa went to a French cement maker in Senegal that is replacing coal with tires as a fuel source.
A spokesperson for Nestlé Philippines cited a lack of infrastructure for collecting, sorting and recycling plastics in the country. The company views co-processing as an “interim solution” and a lower-emissions alternative to burning coal or disposing of plastic in landfills, the spokesperson said.
A Colgate-Palmolive spokesperson pointed to the limitations of the recycling infrastructure and said the company’s approach is to implement “environmentally sound and scalable options that have been approved by the government.” The company is working to use less plastic and more recycled plastic, the spokesperson said.
PepsiCo did not respond to requests for comment.
Yet this approach has met with little support from investors looking at the issue. “The risks are too high,” says Freek van Til, project manager at the Dutch Investors Association for Sustainable Development and coordinator of a $10 trillion coalition calling on companies to reduce their plastic use.
“The negative impacts far outweigh any benefits,” says Marian Frances Ledesma, a zero-waste activist with Greenpeace in the Philippines.
Regardless of what these credits are based on, critics fear that the increasing acceptance of offsets – be it for plastics or for greenhouse gases – will prevent companies from taking more substantive steps to reduce waste or cut emissions.
At a cost of about $115 per unit, offsets from plastics co-processing are up to six times cheaper than those from recycling, according to an analysis of PCX data by Source Material and Cover Story. They are still cheaper than reducing plastics production and use or finding less harmful alternatives.
“The carbon credits were a failure, an excuse to keep doing what we’re doing,” says Marian Frances Ledesma, a zero-waste activist with Greenpeace in the Philippines. “We don’t want to see that mistake repeated with plastic pollution.”
© 2023 Bloomberg L.P.
