Plastic offsets: rubbish or remedy?

Credit: Mehaniq / Shutterstock

Two years have passed since campaigners blew a large hole in the concept of buying credits to offset their plastic use. “[It] is money down the drain – at least in the way it is being done now,” said Tiza Mafira, co-founder of the Indonesian campaign group the Plastic Bag Diet Movement recently. “This project is an example of that.” 

The ‘project’ was the (now infamous) one that included Danone and its bid to offset the company’s plastic footprint in Indonesia. Following complaints from the local community and investigations by campaign groups, the accreditation of the scheme by Verra – the world’s biggest issuer of carbon credits – was suspended. A processing facility in Bali had been built metres from homes and without proper consultation. Danone, which owns Indonesia’s largest bottled water brand Aqua, pulled the plug as concerns over pollution rose. 

“Danone neither intended to nor purchased any plastic credits, as we believe further research is needed to test the effectiveness of plastic credits,” a spokesperson explains to Just-Food.  

What’s the future for plastic offsetting? Has this scandal and the controversies associated with carbon credits tarnished the idea before it has really got going? 

Critics of plastic credits have been around for some time. Sian Sutherland is among them: the co-founder of A Plastic Planet has described the credits as “about as much use as a chocolate fireguard” but a “palatable panacea” for big polluters who are reluctant to “turning off the plastic tap”.

In theory, perhaps. But there is little evidence of this being the case in practice. For example, in 2022 the likes of Unilever, owner of Hellmann’s and Knorr, and Coca-Cola joined NGOs in casting doubt on what they called a “band-aid” pollution solution. Speaking that year at the Sea of Solutions (SoS) virtual event convened by the UN Environment Programme (UNEP), Russell Mahoney, vice president of public affairs for communication and sustainability at Coca-Cola, said: “The reality is that we want to be able to collect and recycle in every market we operate in, which is more than 200 markets. The idea that you might not do something in one market and make up for it in another is not attractive to us – certainly not to the people we might be leaving out as part of that process.” 

Catrin Norris, marine plastics programme officer at the NGO Fauna and Flora International (FFI), has had similar reservations. She tells Just Food she’s become “increasingly concerned about the lack of transparency of currently unregulated plastic credit schemes”. 

Norris adds: “While being touted by some as an ‘innovative finance mechanism’ at the global plastics treaty, they might be a false solution that detracts from more substantial upstream measures to tackle plastic pollution”. 

In November, ahead of a meeting to deliver a global plastics treaty, FFI published research unpicking the state of plastic credit schemes showing “that many projects have been up and running long before they are issued credits and the lack of a guaranteed purchase means credits may never be sold”. Indeed, out of the 993 credits issued by Verra in 2022 and 2023, only 187 (19%) had been sold by October 2024. 

These credits are acting as a “top up” but they’re not the reliable source of funding needed to improve waste management systems, largely in the global south, says Chris Sherrington, head of environmental policy and economics at the consultancy Eunomia and one of the report’s authors. “Waste management has to be funded as a system,” he continues, and all those involved “need that certainty of funding for it”. 

This is where some offsetting projects have fallen short. Norris points to a lack of transparency around “who is benefitting” – a criticism often levelled at their carbon credit cousins. “A minimum price baseline and guidance about how the payment is distributed could be a good step,” she says.

Eunomia found Verra had registered a total of 13 projects under its plastic waste reduction scheme (PWRS), which together have recycled 98,876 tonnes of plastic across countries including Ghana, Thailand, Australia and Iceland. Some 10,146 credits (one credit = one tonne) have been issued but only 228 (2.2%) have been sold. Credits sold under other standards are not shared publicly. 

Verra isn’t the only plastic credit standard provider. PCX Solutions, Zero Plastic Oceans, BVRio and the Prevent Waste Alliance are among the others and the details available are sketchy. Those developing projects that can attract credits include Repurpose Global, South Pole, Second Life, Plastics for Charge and Danone, of course. 

Buyers include NutriAsia, Century Pacific Food, Nestlé, Coca-Cola Beverages Philippines and Mondelēz International, according to Eunomia’s analysis, with credits attracting from $106 to $1,600, though data is, as Norris knows, limited. “I would be very concerned about cheap plastic credits as this would suggest lower wages and lower integrity schemes,” she adds. 

Though carbon and plastic credits have similarities, there are differences worth noting – not least that unlike carbon credits, there is no globally recognised measure or equivalent for a single plastic credit. Given the complex composition of plastics, this means that each tonne of collected plastic will have varying environmental impacts and cannot be considered equal. A tonne of easy to recycle PET bottles is for example a very different processing and profit proposition to the same weight of flexible plastic, often with multiple layers, and which will likely have to be burned or buried following collection. 

This issue was picked up in a recent paper by academics in Australia, Denmark, France, Germany, the Netherlands, the UK and the US. Writing for the journal One Cell last month, the experts explained that tonne-to-tonne equivalence was a “fallacy”. Global warming potential (GWP, CO2e) serves as a scientifically accepted metric to equate the climate impacts of physically distinct greenhouse gases, they wrote, adding: “The harmful effects of different plastics cannot be captured by a single global metric.” 

Whether credits should fund incineration is therefore moot. In February, Agence France-Presse and SourceMaterial, an investigative reporting platform, revealed that the plastic credits system “relies heavily on cement plants, where large quantities of waste are incinerated, making this industry more polluting than aviation”. The team described how cement kilns are “central to the burgeoning plastic credits sector” with collected plastic used as an “alternative fuel” in a process called co-processing. 

Most rigid plastic (74%) was sent for mechanical recycling; whereas more than half the flexibles (56%) went for co-processing under the PARM scheme, a producer responsibility organisation in the Philippines. It is a similar tale in the UK and Europe, where more advanced waste management infrastructure exists: after a period of collecting flexibles at their doors, some UK supermarkets closed their pilots because the mix of food packaging was too hard to sift through and the options for processing were limited to downcycling the plastic into black sacks or incinerating it; only tiny amounts have so far ended up back in food packaging.  

Work continues in this area but is far from speedy due in part to strict food safety rules; this leaves food companies that rely on flexible plastic scratching their heads for sustainable solutions. Fibre-based wrapping is an increasingly popular option but comes with its own environmental, technical and financial baggage. “There’s definitely opportunities for [paper-based packaging] but I’m also very aware of the trade-offs,” says Taylor Stanley, corporate impact strategy manager at Canada-based Riverside Natural Foods, which has just trialled paper-based packaging made by Amcor for its MadeGood trail mix bars. 

Sustainability leaders in 2025 spend their entire lives assessing trade-offs: and one of them for packaging is the balance between drilling holes for oil versus cutting down trees (even if they are responsibly sourced). There are no easy answers, nor silver bullets – which is why Stanley turned to plastic credits. Riverside Natural Foods has been working closely with Repurpose Global and its global plastic credit protocols. “They’re helping us along on our journey to get out of plastic,” Stanley explains. 

The owner of brands including MadeGood, Good to Go and Cookie Pal (treats for dogs) has a target for 100% of its single-serve bars to be in recyclable or compostable packaging by the end of the year – but is currently at 0%, according to its (refreshingly transparent) sustainability report. It has managed 33% for stand-up pouches. Some 733 tonnes of plastic credits have so far been purchased, with 2,135 tonnes of plastic offset since July 2021. The plan, once it has “innovated out of plastic”, is to go back to 2013, when the company was founded, and retroactively offset all the plastic used. 

But have no fear – this is money that has to make a difference, with Stanley at pains to explain just how rigorous the Repurpose Global process is. The detail they provide has been coupled with trips to India to see projects on the ground (as well as the vast tonnages of plastic ending up there, here and everywhere). The key is to remove plastic out of nature for treatment – and that plastic must be “low-value, flexible plastic”, which is exactly the type Riverside relies on. 

Are the offsets buying the business time to continue using plastic? No way, he says. “If anything, it’s given us a better business case to do the switch to paper sooner.” This is because the costs of the offsets and fees are “baked in” to the costs of the foods sold – and building those externalities into the cost of the plastic packaging brings it much closer to new paper-based options. And that has also eased the path towards regulations like extended producer responsibility for packaging. 

Riverside Natural Foods’ report echoes Stanley’s confidence in this particular “self-imposed tax” being ring-fenced to projects that have environmental and social benefits. “We have been fortunate to find a partner who can educate us and confidently report on the real downstream impacts from our investments, while at the same time providing us with third-party verification via their plastic neutral certification.”  

Much like carbon, credits are entangled with the knotty issue of plastic neutral claims. Riverside Natural Foods has added the term to its packaging – such is the team’s confidence in the scheme – and that will attract more scrutiny. Carbon neutral is set to be banned in some parts of the world, like the EU, where confidence in the voluntary carbon market has crashed and regulations around all types of green claims have been tightened. 

Sophie Tuson, environment and climate change practice lead at law firm RPC, says brands must “tread carefully” when making neutrality claims. Campaign groups are on high alert for potential greenwashing while laws in countries like the UK require clear explanations of what plastic neutral means, specifics on how much of the plastic footprint reduction comes from a company’s own operations versus offsets, transparency about any offsetting schemes used and robust substantiation. Litigation risks are also rising, Tuson adds. 

The reputational and regulatory risk explains why food and drink corporates have become reticent to deal in plastic credits, let alone make public claims about them. There are stories, both public and private, of cash for credits not arriving at the communities they were meant to, or waste being sent directly to incinerators with “zero emissions control”. 

There are good schemes and bad, notes Zoë Lenkiewicz, founder of Global Waste Lab, which helps teams across the global south to “democratise waste wisdom”. She cites CleanHub and Plastics 4 Change as two examples as those that are “community first” and develop long-term relationships, with a focus on workers’ rights and protections. Transparency is high and there is “no bullshit”, she adds. 

Just Food approached Nestlé, PepsiCo, Danone and Unilever, to ask what their current policies on these credits are. Nestlé says it does not use them and instead “engage[s] in direct collection, sortation and recycling or recovery partnerships”. The lack of third-party verification in such an approach concerns some of the experts Just Food consulted. 

Meanwhile, Danone has clearly been put off and is awaiting “standardised methodologies” to properly measure the impact of voluntary initiatives. “There is no one simple solution to tackle a complex waste problem,” a spokesperson explains. 

That much is obvious. Research just published in the journal Nature Communications Earth & Environment shows 436.66Mt of plastics were traded in 2022, with packaging accounting for 158.04Mt. The global recycling rate of all this stood stagnant at 9% (38Mt). The funding gap in plastic waste management that needs to be filled by 2040 is some $240bn per year.  

Time will tell on whether plastic credits can help to plug that. Sceptics have snowballed but the likes of Stanley warn not to throw the baby out with the bathwater. “While we are innovating our way to a more sustainable packaging structure in the long run, we are still contributing to the current plastic pollution crisis,” he says. Buying credits for projects that stack up means “we are turning the tap off and mopping the floor”.