The world produces around 400 million tonnes of plastic waste each year, a figure that outweighs the combined mass of the global human population. Yet, only 9% of this plastic is recycled, and experts warn that emissions from plastic production could triple by 2050 if urgent action is not taken.
Since 2022, the United Nations has been working to establish a legally binding treaty to tackle plastic pollution. However, negotiations have repeatedly collapsed, largely due to disputes over introducing a global cap on plastic production. Petrostates, whose economies depend heavily on oil the key raw material for plastics, have been accused by campaigners of blocking progress.
This week, UN delegates are meeting in Switzerland for another attempt at forging an agreement. Even if a deal is reached, experts caution that it could take years before tangible environmental benefits are seen.
In the meantime, institutions like the World Bank are turning to market-driven solutions, including plastic offsetting. Modeled after carbon credits, plastic credits allow major polluters to pay companies to collect and re-purpose plastic waste. For each tonne of plastic collected, the polluter earns one credit, potentially claiming a status of “plastic neutral” or “plastic net zero.”
However, the practice is controversial. Investigations by SourceMaterial revealed that in the world’s first plastic credit registry, the Plastic Credit Exchange (PCX) in the Philippines, only 14% of credits were linked to actual recycling. The majority of collected plastic was instead burned as fuel in cement factories through a process called co-processing, which emits significant amounts of CO₂ and toxic chemicals associated with cancer. While PCX maintains that co-processing reduces fossil fuel dependency and is conducted under controlled conditions, environmental experts fear it may simply shift the problem rather than solve it.
The World Bank has embraced plastic credits as part of its environmental financing strategy. In 2023, it launched a $100 million bond linked to projects backed by the Alliance to End Plastic Waste in Ghana and Indonesia both countries grappling with severe domestic and imported plastic pollution. Members of the alliance include global oil and petrochemical giants such as ExxonMobil, LyondellBasell, and Dow Chemical, all of which continue to produce plastics at massive scales.
Critics warn that without a legally binding global cap on production, plastic offsetting could become a greenwashing tool rather than a true environmental solution. As UN treaty talks continue, the world faces a stark choice: transform plastic production and waste management systems now or risk an irreversible environmental crisis.
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