Plastic Credits

iasparliament Logo
November 20, 2023

Why in news?

To cut down on plastic pollution, plastic credits are one of the tools being considered in UN-led talks in Nairobi.

What are plastic credits?

  • Plastic credits - It is a market based mechanism that allows companies or individuals to pay for plastic waste collection and recycling in exchange for a credit that offsets their own plastic production or use.
  • It is similar to carbon credits that many fossil fuel companies have purchased to try to offset their greenhouse gas emissions.
  • Facilitation- The exchange is facilitated by accreditors like Verra, marketplaces like the Plastic Credit Exchange (PCX), or private companies that trade in credits or organize credit-generating activities.
  • When companies buy enough plastic credits to offset their plastic footprint over a set period of time, they may claim net-zero plastic.



What are the advantages of plastic credits?

  • Combat plastic pollution- It can reduce the amount of plastic that enters our oceans, rivers, and landfills.
  • Financial incentive- It finances waste management infrastructure which helps in plastic waste collection and recycling and fosters sustainable solutions.
  • Circular economy- The plastic materials are reused and recycled instead of being discarded or leaked into environment.
  • Eco friendly- They reduce the environmental impacts of plastic pollution, such as greenhouse gas emission, water consumption, land use and biodiversity loss.
  • Income support- Money raised from waste collection and recycling credits can generate income for the informal waste sector people who pick through waste.
  • Awareness generation- It will help in engagement among consumers, businesses and government on the issue of plastic pollution and the need for more sustainable solutions.
  • Proper accreditation- These credits are measurable, traceable, and verifiable, ensuring that they represent actual reductions in plastic waste.
  • Corporate social responsibility (CSR) - By purchasing plastic credits, companies can demonstrate their commitment to sustainable practices and social responsibility.

What are the disadvantages of plastic credits?

  • Inefficient- They are not a substitute for reducing plastic use and waste at the source, which is the most effective way to prevent plastic pollution and its environmental consequences.
  • Lack of clarity- They are not standardized or regulated, which can confuse and mislead consumers and corporates.
  • Limited scope- They may not address the social and economic aspects of plastic waste management, such as the rights and livelihoods of informal waste collectors.
  • Poor quality- They may not account for the quality and durability of the recycled plastic, which may affect its environmental performance and value.
  • Unsustainability- They promote a linear model of plastic production and disposal which would not foster circular economy and result in wasteful production.
  • Oversight- Plastic credits may not address the root cause of plastic pollution, which is the overproduction and consumption of single-use plastics.
  • They may create a false sense of sustainability and divert attention from the need to reduce and redesign plastic products.
  • Inaccurate data - They may rely on self-reported data or inaccurate measurements, which could lead to fraud and double counting.
  • Fundamental flaw- Certain environmental groups have criticised plastic credits as a greenwashing tool, stating that it encourages burning plastics and creates more emissions and health problems.

What lies ahead?

  • Plastic credits should align with the existing frameworks and indicators such as Global Reporting Initiative and use a common methodology to measure and report their impact.
  • They should have independent auditors and certifiers to validate claims and processes and avoid conflict of interest.
  • They should support livelihoods and well-being of waste collectors and recyclers and create value for low-value plastic.
    • An example of a socially inclusive scheme is Plastic Bank.



  1. The Hindu- Plastic credits on table
  2. WEF- Plastic credits and offsets
Login or Register to Post Comments
There are no reviews yet. Be the first one to review.



Free UPSC Interview Guidance Programme