The Brief: A complete guide to plastic crediting

In a rush? Click here to read a short summary of this story

The World Bank’s latest report, Unlocking Financing to Combat the Plastics Crisis, explores how plastic crediting – an emerging tool to fund plastic waste reduction – could help bridge the financing gap in tackling global plastic pollution. With plastic credit programmes still in their infancy, the report assesses their potential, risks, and next steps for ensuring credible, scalable impact.

• Plastic credits are a voluntary, results-based mechanism representing the collection, recycling, or avoidance of plastic waste, primarily focused on downstream activities and sold to fund further reduction efforts.
• Three categories of programmes exist, ranging from fully independent and transparent systems to more opaque, privately run initiatives. Together, they have issued over 23,000 credits, with uptake concentrated in Asia and Latin America.
• The market lacks standardization, with inconsistent definitions, claims, and verification protocols raising concerns about greenwashing, double-counting, and the credibility of “plastic neutrality” claims.
• Social safeguards are critical, with many programmes involving informal waste workers and aiming to ensure fair pay and working conditions – but technical and financial barriers still limit access for small-scale actors.
• Plastic credits should complement, not replace, regulatory and corporate action, and may support extended producer responsibility (EPR) schemes, offering a path for companies to finance verified waste reduction beyond legal requirements.
• Future success hinges on global standards, transparent pricing, upstream credit methodologies (e.g., reuse and refill), and robust governance to legitimize plastic credits as part of a broader circular economy strategy.

Plastic crediting could serve as a supplemental tool to channel funding into plastic pollution solutions, especially in underserved regions. Yet for the system to scale responsibly, it needs clearer rules, stronger oversight, and integration into wider policy frameworks.

In June, the World Bank published ‘Unlocking Financing to Combat the Plastics Crisis’ – a paper looking into the potential benefits and risks of plastic crediting with recommendations for the future. In this edition of The Brief, we take a closer look at this report to learn more about what plastic crediting is, how it works, where it is at present, and how it could develop to help fund the fight against plastic pollution.

What is plastic crediting?

Plastic crediting is described as a ‘results-based mechanism’ in which the public and private sectors finance plastic pollution reduction initiatives and support the transition into a circular economy. The more plastics a plastic crediting programme reduces, the more credits it generates, and the more successful it is.

In general, the World Bank describes plastic credits as “an environmental certificate that represents the result of collecting and managing plastic waste from the environment, recycling plastic waste, or avoiding plastic use.” Issued per metric ton or kilogram, they tend to be awarded for different achievements based on the programmes they appear in.

Sometimes they are linked to specific (usually downstream) activities, such as the collection, recycling, or avoidance of plastics. Alternatively, they might be categorized by the origin of the plastic waste, e.g. so-called ‘ocean-bound’ plastic credit.

Currently, plastic credit standards only apply to macro-plastic waste – i.e., waste larger than 5mm in size. Microplastics, or fragments of waste smaller than 5mm, are not yet accounted for.

Nor are credits distinguished by specific polymers. While most programmes monitor their results based on plastic types, no one polymer is considered more valuable than another. Still, the World Bank suggests that a conversion factor to calculate plastic waste reduction impact by polymer type is currently being considered.

In any case, the success of a project is theoretically incentivized by the possibility of selling credits to buyers, with the revenue used to support the reduction of plastic pollution. Prepayments can also be made in scenarios wherein upfront investment is used to finance the credited activities.

Third parties can purchase credits to fund reduction or avoidance efforts outside their direct control. They can opt to resell the plastic credit or ‘retire’ it from further use; in the latter case, they can make a claim on the environmental benefit financed via the credit.

The purchase of credits can relate to various sustainability claims:

• Plastic neutral – if the number of plastic credits purchased is equivalent to a product’s total plastic footprint in a year, the impact of plastic use is believed to be neutralized. This is inspired by the concept of carbon neutrality.
• OBP neutral – similar to plastic neutrality, except this qualification focuses specifically on ocean-bound plastics (OBPs).
• ‘Net Zero Plastic to Nature’ – plastic collection credits must equate to the portion of the annual footprint not yet collected and well-managed. ‘Net’ indicates that the impact is mitigated, not neutralized.
• ‘Net 100% Recycled at End of Life’ – plastic recycling credits must equate to the portion of the annual footprint not yet collected and recycled.

Plastic neutrality is the most common claim to date – yet the World Bank suggests that the term may be misleading. Just as one can purchase ‘carbon offsets’, plastic credits are sometimes referred to as ‘plastic offsets’; yet plastic footprints cannot be neutralized the same way as greenhouse gases can, and a buyer cannot remove their own plastic pollution from the environment by purchasing an equivalent weight in plastic credits. NGOs, in particular, emphasize that the two concepts should not be conflated or confused.

The World Bank adds that the environmental claim and the physical plastic material it correlates to must be clearly distinguished to prevent the same impact from being double-counted. Revenue generated by credit sales is channelled back into projects, whether directly through the buyer or via a crediting standard setter, credit seller, or other intermediary.

Companies are not yet legally obligated to reduce their plastic pollution, so plastic credits are currently a voluntary purchase. Today’s credit buyers apparently aim to align with their Corporate Social Responsibility targets and consumer demand to help tackle plastic waste. The public and private sectors are also said to purchase credits ‘to address plastic pollution, without claiming compensation of a plastic footprint’.

Right now, prices are set by project owners, plastic credit sellers, and buyers. The cost of a plastic credit can vary by type, geographical location, and programme, apparently ranging between USD 140 per ton to USD 670 per ton.

The World Bank emphasizes that plastic crediting should not replace long-term commitments from the private sector or national governments, but be considered an ‘additional tool’ in financing efforts to combat plastic pollution.

What’s on offer?

The paper identifies 160 existing plastic crediting projects as of December 2023 – 53% of them based in South and East Asia, 25% in Latin America, and 11% in Africa. Projects tend to focus on developing countries in line with high rates of plastic pollution, and the desire to find alternative financing mechanisms to tackle it.

Also, crediting projects must demonstrate ‘additionality’ – i.e., proof that the programme’s activities would not take place without financing from plastic credits – and this is easier to prove where the relevant legislation is lacking or still developing.

Indonesia, India, and the Philippines are listed in the paper as ‘high-priority’ countries at high risk of plastic leakage, yet most projects with issued credits are based in East Asia and the Pacific; this ‘reflects the early development of plastic crediting programmes in the region’, the World Bank says.

Regardless, it is claimed that around 23,445 credits have been verified or issued since 2021; and, in the same time frame, approximately 11,584 credits have been retired on all public registries. These figures are expected rise as more projects complete registration and more credits are issued.

The paper splits crediting programmes into three categories:

The first – ‘fully independent and transparent programmes’ – come to exist through public and expert consultation between multiple stakeholders and align with best practices with by the International Social and Environmental Accreditation and Labeling Alliance (ISEAL). They publicize their standards and methodologies, require third-party verification, and list their project identification (ID) and name, quantity of credits issued, serial numbers per credit, quantity of credits retired, retirement date, and reference period on public registries.

These programmes and their affiliates are fully independent from project development, as well as the implementation, purchase, and sale of plastic credits. They are open to applications from any project that meets their eligibility criteria.

Verra Plastic Waste Reduction Standard (PWRS), GreenBlue Recycled Material Standard (RMS), and Zero Plastic Oceans Ocean-Bound Plastic Neutralization Certification (OBP) are named as current examples.

Between the 61 projects identified under this first category, the World Bank calculates the verification and issuing of 11,584 plastic credits, with each credit equated to one metric ton of plastic waste. Current pricing estimates also lead the paper to predict that the sale of existing plastic credits could generate around USD 10 million for plastic pollution interventions – and, within the next five years, could undergo USD 30 million’s worth of annual growth.

The second category constitutes ‘programmes with a public standard and multiple roles in the value chain’. Like Category 1 programmes, they apply a publicized crediting standard and methodology, require third-party verification, and follow ISEAL best practices. Any project owner may apply to them.

On the other hand, they may not list all their information on public registries. Standard-setters may not be fully independent, the paper elaborates, and they may be involved in the implementation of projects, purchase and sale of plastic credits, or provision of paid certificates for buyers.

The World Bank places PCX Solutions Plastic Pollution Reduction Standard (PPRS) and BVRio Circular Credits Mechanism (CCM) under this umbrella.

The third category consists of other programmes that finance plastic pollution reduction but do not fit under the aforementioned criteria. For instance, some take a different approach to crediting and/or refer to credits as offsets, certificates, contributions, or verified units. Their internal guidelines and methodologies are not generally made publicly available; they are managed through private registries, such as blockchain-enabled platforms that can only be viewed by the programme or its buyers, and their owners pick the projects they want to work with.

Furthermore, these programmes might play a part in project development and implementation, sales of credits, and certifications for buyers. Under this category, different programmes may uphold different requirements for third-party verification.

Regardless of their category, existing credit programmes generally aim to reduce plastic pollution in nature, divert plastic waste from landfill, or recycle it. While the first goal is the most common, the World Bank observes that all three are downstream measures – and believes that plastic crediting systems for upstream activities still require significant testing and stakeholder alignment before they can be established and developed.

Pros and cons

In the global pursuit of a circular economy, there is an estimated investment gap ranging from USD 426–544 billion to USD 1.2 trillion by 2040. Plastic waste collection services are facing an approximate financing gap of USD 28-40 per ton of plastic waste; and a gap of USD 24-40 per ton is expected across recycling value chains in Indonesia, the Philippines, Thailand, Vietnam, and China.

A challenge of this scale necessitates access to various fiscal and financing instruments, the World Bank emphasizes, and plastic crediting programmes are expected to direct funds into the management of plastic pollution.

Awareness of plastic credit programmes is increasing, as are programme uptake and the number of plastic credits in existence. Despite increasing project supply, though, market demand for plastic credits remains unpredictable. Also, further participation in credit programmes is being stalled by a lack of common definitions, framework, and requirements, alongside the risk of low credit prices.

The World Bank hopes that the future introduction of standards and methodologies for impact reporting – including a framework for the transparent, results-based accounting, monitoring, and evaluation of plastic pollution initiatives – will increase accountability and incentivize interested parties to get involved.

Another positive is the importance of the informal sector and other marginalized groups as stakeholders in waste management. Existing programmes often include safeguards and requirements to protect waste workers, prevent forced or child labour, and offer further social benefits. Multiple crediting programmes already follow a simplified credit issuance to ensure that informal workers and small-scale projects can participate; some have also incorporated aspects of the Sustainable Development Goals and/or requirements and safeguards to improve social and environmental conditions.

Further progress could be made with a benefit-sharing mechanism for marginalized and informal workers, the paper claims. For instance, certain participants could receive a specified cut of the revenue to ensure that they directly benefit from plastic credit financing.

The World Bank suggests that standard-setting organizations could streamline processes or lower fees for smaller projects, while governments and investors provide upfront capital to implement projects and certify credits via forward transactions. In theory, this would secure future supply or structured deals over several years.

Even so, the current challenges and risks associated with plastic credit programmes include conflict of interest and transparency. While some operate independently of implementation and sales, hosting public registries and implementing specific crediting standards, some programme owners wear multiple hats as they set definitions, eligible project types, calculation methods, and processes.

The accessibility of the mechanism also comes into question. Implementing the plastic crediting process – specifically, such aspects as product validation and registration, credit verification, and issuance – is said to be technically complex, costly, and time-consuming. This is feared to dissuade small businesses and project developers, especially marginalized informal workers, from participating.

Unlike carbon credits, which are guided by the Science Based Targets Initiative (SBTi), plastic credits do not come with a target-setting framework or holistic reduction strategy. As stated before, NGOs and civil society have pushed back against the accuracy of ‘plastic neutrality’ and other sustainability claims related to plastic credits; and stakeholders are still discussing whether plastic credits count as compensation for an organization’s plastic footprint. Combined with the varying types of credits available, there is thought to be a general sense of confusion about plastic credit programmes that are affecting their growth.

How we move forward

Right now, no universal governance system or regulatory exists to develop programmes, standards, or credit use. Organizations like The Circulate Initiative and the 3R Initiative have developed their own best practices to serve as guidelines – yet both feature a call for harmonization, which existing programmes do not yet have.

To avoid the misuse of credits in corporate greenwashing, the World Bank recommends that uniform best practices are developed. These should contextualize plastic crediting in the grand scheme of efforts to reduce plastic pollution, build trust in plastic crediting schemes, and direct funds towards specific activities within a wider plastic action framework during a transition period.

A clear distinction should be made between plastic credits and other activities that directly reduce the use of plastics within a company’s value chain, and participants should be clear on suitable claims related to credit purchases.

Minimum requirements and common protocols for plastic crediting are essential, the World Bank says. These should standardize fundamental principles, definitions, and protocols for validation and verification. The role of crediting to finance plastic pollution interventions, accounting methods, associated claims for buyers, and ways of collecting and managing legacy plastics should all be considered.

Common core principles and protocols could, in future, be set by an independent governance entity and enforced across crediting programmes. These should prevent double counting, guarantee additionality, and require projects to responsibly and permanently manage plastic waste against a series of robust requirements.

Eligibility requirements – including new or capacity expansion projects and time-bound restrictions (registration within a certain time frame, limited renewals, etc.) – should be set. This would theoretically prevent long-term reliance on a crediting system. A knowledge-sharing platform could also help raise awareness of plastic crediting, educate others about the process, and acknowledge any possible risks.

The paper promotes the introduction of a public disclosure platform to monitor buyers’ use of plastic itself and plastic credits, as well as mitigation activities within their own supply chains. Again, the World Bank discourages the use of plastic credits to replace the public and private sector’s commitments and plastic reduction efforts.

Technical assistance is recommended for early-stage projects and those hiring informal marginalized workers. Among other focuses, the World Bank believes that this assistance should seek to simplify data collection and benefit-sharing mechanisms.

Such assistance could be provided via a fund or pre-purchase facility. This could serve multiple purposes, the paper argues: addressing market uncertainties, achieving financial security for prospective projects, and reassuring participants when it comes to prospective demand and pricing.

Funds could relate to a specific activity, use case (plastic credits in EPR, for example), or methodology development. The World Bank adds that outcome bonds could serve as upfront financing, with future plastic credit issuance and sales providing the return on investment.

The paper continues to say that plastic credits should be reasonably priced in relation to the cost of reducing plastic consumption and waste. Pricing guidelines should be established around and influenced by activity type, location, material type, and co-benefits; they should also respond to players in the civil society private sectors, like waste management operators, recyclers, and buyers.

Categories should be implemented into the guidelines, such as factors for price determination; and they could potentially set a floor price for the early market to keep prices above sustainable thresholds.

Some emerging extended producer responsibility (EPR) schemes feature plastic crediting as a means of accountability. According to the World Bank, a voluntary crediting scheme can prepare obligated parties throughout the transition into EPR – and, once the EPR scheme is enforced, a plastic crediting mechanism could simultaneously exist as a regulatory tool.

The World Bank elaborates that government agencies can utilize plastic credits from external crediting programmes or set their own basic criteria – but adds that, if a programme is incorporated into an EPR scheme, key stakeholders should be involved from early in the design process.

The paper posits that, throughout the integration process, existing crediting programmes and projects should act as import points of reference, and that government organizations should coordinate with them to ensure high-quality systems and align pricing expectations. Annual plastic footprint reporting, reduction targets, and mandated financing for reducing pollution relative to an organization’s plastic footprint are suggested as EPR requirements.

Guidelines could also set rules around the use of plastic credits from existing crediting programmes in order to achieve national compliance.

In certain countries, a crediting mechanism within an EPR scheme could help organizations access and finance existing plastic reduction projects. Plastic credits could cover also areas that EPR doesn’t, such as different types of plastics, and help companies go beyond legal requirements; alternatively, entities not held to EPR requirements could buy credits and support plastic reduction efforts.

To address the risk of organizations reverting to business as usual once they have paid their plastic taxes, which are designed to avoid waste in the first place, plastic crediting could provide a transparent accounting framework to direct finance towards certain activities. Since it offers a verified unit of impact, it could provide proof of results and lift the burden on government agencies to implement EPR.

Since most existing programmes cover downstream activities, the World Bank backs a drive to expand into upstream solutions and close the loop on plastic crediting. Such upstream activities as reuse and refill are considered ‘essential’ to lowering the generation of plastic waste – but methodologies for upstream crediting are still required. Eligible activities, project types, and accounting methods are among the necessary considerations.

Once the current plastic crediting market is comfortably established, further piloting is recommended. Once again, implementing parties from the private sector should be involved from the beginning. Plastic crediting should also expand to cover microplastic pollution, the World Bank adds.

In summary, the World Bank states that ‘addressing the current uncertainties around plastic crediting and strengthening the governance system are critical to ensure the responsible use and adoption of this emerging mechanism in conjunction with other efforts to reduce pollution at source’. Systems should secure a stable income and safe working conditions for employees in the informal sector, while also providing SMEs with technical assistance and derisked financing.

It still has some progress to make before we can expect to see it implemented at scale, but if interested buyers take action, plastic credits are expected to help fill the financing gap. Still, demand is uncertain in a very new market, which is currently a web of separate programmes rather than a harmonized system. Even on a local level, though, this is a solution worth keeping an eye on – and evaluating the effectiveness of as efforts continue to retrieve plastic pollutants.

If you liked this story, you might also enjoy:

The ultimate guide to the Packaging and Packaging Waste Regulation in 2024

How are the top brands progressing on packaging sustainability?

Sustainable Innovation Report 2024: Current trends and future priorities

Everything you need to know about global plastic sustainability regulation