Impact through upcycling and recycling credits on PCX Markets, which helps fund plastic waste recovery, skyrocketed by 1,500% in 2023 as large corporations looked for new ways to meet sustainability goals and compliance requirements. The sale of those credits helped fund the upcycling or recycling of 9,000,000 kilograms of plastic waste last year alone.
The jump in demand for credits issued by recycling and upcycling projects, which channel much-needed funding into the waste management sector, illustrates how the Philippines’ new Extended Producer Responsibility Act is fueling the effective and economically viable development of a circular economy.
One of the projects on the PCX Markets platform is an upcycler based in Bulacan that uses plastics from beverage cartons and other low-value flexible items, like sachets, to create boards for use in construction and furniture. An overall rise in demand for credits in 2023 helped support this upcycler’s operating costs; as a result, they aim to triple their processing capacity by September of 2024.
Another project on the marketplace, based in Davao, recycles PET bottles into flakes that can be used in various products such as plastic containers, PET straps and fibers used in clothing. Rising demand for credits has helped reduce the volatility brought on by fluctuations in demand for flakes, giving this recycler the confidence to invest in more capacity for 2024 and beyond. The recycler estimates that the new infrastructure will allow them to process an additional 1 million kg of plastic waste into flakes every month, representing a 15% increase over last year.
In 2022 the Philippines passed an Extended Producer Responsibility Act requiring corporations with assets over PHP 100 million to recover and divert 20% of their accountable plastic packaging footprint by the end of 2023. The recovery and diversion target increases to 40% by end of 2024, and in increments of 10% every year until 80% by end of 2028 and beyond.
Under the law, companies have a range of strategies to choose from, including reducing their plastic packaging footprint through elimination of unnecessary plastics, use of reusable and recyclable packaging or inclusion of recycled content, and implementing recovery and diversion programs. This can include plastic credits, which fund the cleanup and responsible processing of the equivalent amount of plastic waste. All strategies and programs intended to be used for EPR compliance are to be verified by independent third party auditors.
The Philippines is at the epicenter of the world’s plastic waste crisis. The country consumes over 2,150,000 metric tons of plastic each year. Just 9% is recycled and according to a 2020 WWF report a whopping 35% makes its way into the environment. Like most emerging markets, part of the problem is the lack of waste management and recycling infrastructure, from collection through to transportation and responsible processing.
Companies that want to complement upstream reduction efforts by funding downstream plastic waste recovery can purchase credits issued by projects, including recyclers and upcyclers, that want to raise funds to expand capacity. One credit cleans up one metric ton of plastic pollution.
A growing number of companies, which are taking steps to reduce upstream plastic usage in addition to funding of downstream cleanup with credits, are now selecting verified recycling and upcycling credits from PCX to help meet this year’s 40% target. Several, in fact, have also taken proactive action to take responsibility for 100% of their plastic footprint, channeling even more funds into recycling infrastructure sooner.
PCX Markets expects demand to continue to increase throughout this year, helping fund the expansion of recycling and upcycling capacity in 2024 and beyond.
“The Philippines urgently needs a market-based mechanism to fund the cleanup of the plastic pollution that’s choking our country. We also need a financing mechanism to kickstart the growth of our recycling industry, which is really in its early days. PCX Markets hopes to do our part by supporting both,” said PCX Markets founder Nanette Medved-Po. “We’re incredibly excited to see a sharp rise in demand for recycling and upcycling credits. Companies now have to take responsibility for 40% of their plastic footprint by the end of this year, and they really want to make it count in ways that have lasting impact. We just sold the entire annual capacity of one upcycler to a single company. I can’t wait to see what the second half of the year brings.”