Trading in plastic credits has emerged as an option to offset businesses’ plastic footprints, but experts say that companies should focus on reducing production of the material before using credit purchases to deal with the plastic pollution crisis.

One plastic credit represents one metric ton of waste collected, recycled or upcycled, and can be bought by companies to offset their plastic footprints. India’s plastic credit market is expected to grow 70 percent to $1.7 billion from 2024 to 2030, and Global Market Estimates predicts 48 percent global growth in the credits by 2029.

As with carbon credit markets, however, critics are skeptical of this tool’s efficacy to bring systemic, permanent reductions to plastic waste.

“I would never argue that plastic credits are the solution to the crisis on their own,” said Sebastian DiGrande, CEO of PCX Markets, which launched in 2021 and has become one of the world’s largest plastic credits marketplaces. “But we do think that credits are an important financing mechanism that will accelerate action downstream and incentivize action upstream.”

What is a plastic credit?

In 2022, the world generated 268 million metric tons of plastic waste. Eleven percent of that, or about 718,000 jumbo jets by weight, were discarded into the environment.

The financing gap to create a circular plastics economy by 2040 is between $426 billion and $1.2 trillion, according to the World Bank. Proponents of credits argue that they address plastic waste today while mobilizing financing for waste infrastructure.

Projects that collect plastic waste and meet quality standards can sell credits for each ton they collect. Companies, or individuals, can purchase those credits, funding waste management projects.

Online marketplaces like PCX Markets connect projects with buyers. To date, PCX says, it has facilitated the collection and processing of over 136,000 metric tons of plastic.

Projects are usually based in developing nations that have little or no municipal waste collection services and therefore generate more plastic waste pollution.

After plastic is collected, what happens to it varies. It might be disposed of in a managed landfill, recycled, upcycled or burned as an energy source.

Plastic credit prices are set by project organizers. At PCX, credits sell for an average price of around $200. Cheaper options are generally collection and disposal or burning, while more expensive projects involve upcycling or ocean clean-ups.

Other prominent names in the plastic credits market include Verra — a leader in standards-setting in the voluntary carbon market whose methods have attracted scrutiny — and BVRio.

“Plastic credits can align financial flows from a range of sources towards high quality plastic waste management projects, particularly in regions that are disproportionately impacted by plastic pollution,” said Komal Sinha, senior director of government and policy engagement at Verra.

No cure for plastics pollution

Critics dismiss the whole concept.

“Plastic credits treat the symptom, waste, rather than the disease, unsustainable production and consumption of single-use plastics,” said Alex Blum, CEO of Applied Bioplastics.

“I doubt whether the plastic credit mechanism can contribute meaningfully,” said Sangcheol Moon, plastics researcher at UC Berkeley. “It is not a stable funding mechanism and it can further fragment the governance landscape.”

Concerns also emerge at the individual project level.

A recent paper by Moon and Neil Tangri, science and policy director at the Global Alliance for Incinerator Alternatives, raises concerns about plastic credits, specifying additionality and permanence issues.

The paper argues that some credits “include ongoing waste collection activities that would have occurred regardless of plastic credit incentives,” failing to meet additionality standards.

Permanence is another challenge.

“Plastic credits are not permanently removing plastic from the environment,” said Tangri. “If plastics go to recycling, which we think is the best possible destination for plastic waste, it gets recycled and within a short time it becomes waste again.”

Standards setters like Verra and PCX try to reconcile these issues by requiring projects to meet additionality requirements, environmental standards and improved worker conditions.

“Unless we provide the highest possible level of transparency and trust in what we’re doing, this market will never scale,” said DiGrande.

Lack of standards 

A lack of universal definitions and guidelines, however, remains an obstacle for the industry.

“We don’t believe in the effectiveness of plastic credits without a credible, solid, and harmonized global standard,” says a statement on Nestlé’s website.

“We believe further research is needed to test the effectiveness of plastic credits,” said a Danone spokesperson. “We also believe that there is a need for standardized methodologies to measure the impact of voluntary initiatives.”

Danone’s subsidiary, Danone-AQUA Indonesia, withdrew from a plastic credit partnership last year after community members complained that its alternative fuel plant was releasing toxic smoke.

Proponents argue that plastic credits provide communities and workers with steady sources of income, but studies of forest management and soil carbon credit projects “show that worker benefits often don’t materialize,” said Moon.

How sustainability leaders approach them

“Reduction obviously sits as that first step for us, but we still produced 1.9 million pounds of plastic in 2024,” said Kaley Warner, sustainability manager of Grove Collaborative, a company that produces sustainable household products. “We’re trying to take responsibility for the plastic that doesn’t have a viable alternative yet.”

Grove considers itself “plastic neutral” because it recovers an equal amount of plastic through credits as it produces. Meanwhile, upstream efforts led to a 23 percent reduction in Grove’s plastic production from 2023 to 2024.

In most countries, plastic waste management programs are voluntary for large companies. However, extended producer responsibility (EPR) regulations are emerging across the world, with governments in Canada, the E.U. and the U.K. mandating that companies take responsibility for their products after consumer use.

In the Philippines — the leading source of ocean plastic pollution in the world — plastic credits are permitted to satisfy EPR requirements. The pros and cons of this approach are being debated in global plastics treaty talks.

In the Philippines, new producer responsibility regulations have resulted in more capital being funneled to plastic recycling infrastructure, and the unit costs of using virgin plastic are increasing due to credit purchases, incentivizing investment in upstream solutions.

“We’re not perfect,” said DiGrande. “But we also don’t want perfect to be the enemy of good along the way.”

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The opinions expressed here by Trellis expert contributors are their own, not those of Trellis.​

It’s crunch time for federal clean energy policy — and the consequences for the American economy are enormous.

Last month, the U.S. House of Representatives passed a budget reconciliation bill that would all but eliminate the federal clean energy tax credits that were extended and expanded by Congress in 2022. That legislation — and the long-term certainty it provided the private sector — powered an investment boom to the tune of hundreds of billions of dollars, as businesses quickly got to work building factories to produce clean technologies in the U.S. and new energy infrastructure to affordably and quickly meet the nation’s rising electricity demand.

The goals of domestic manufacturing growth, affordable power and U.S. competitiveness are regularly touted by the Trump administration, yet the legislation passed by the House would undermine all three. By cutting off or overcomplicating most incentives, the bill would increase electricity rates by 10 percent or more, exacerbating inflation by making power more scarce at a time when we need more of it to support AI and other new technologies. It would kneecap U.S. growth and innovation in growing global industries such as electric vehicles, batteries and clean power infrastructure. And it would scrap major industrial projects at risk of hundreds of thousands of jobs.

As Michael Tubman, the federal policy director at the electric vehicle manufacturer Lucid, said at a recent media briefing: “Anyone who has visited our [Arizona] factory can see the evidence plainly in front of them of the jobs — the high quality, high paying jobs that these incentives are supporting.”

Dozens of companies head to Capitol Hill 

With the Senate working on its version of the legislation, companies still have time to make an impact. More than 30 companies are headed to Capitol Hill this week for a series of meetings with Senate Republicans, where they will emphasize the tax credits’ vast economic benefits. 

But companies don’t need to be in D.C. to take action. For sustainability professionals, the tax credits are crucial to meeting company goals, so now is the time for them to work with government affairs and executive teams to get in touch with the senators in states where they operate to make the case that gutting these incentives would be a self-inflicted wound to U.S. economic, energy and geopolitical interests. To prevent that outcome, businesses should press the Senate to fix four major flaws in the House bill:

Tie eligibility to project construction, not completion

The House bill changes the current rules so that projects must be fully completed and operational — rather than merely under construction — to qualify for the credits. But between permitting issues, supply chain disruptions, litigation and other unpredictable factors, the timing of a project is often well beyond a company’s control. The proposed change would therefore create uncertainty about whether even projects that are ready to break ground will qualify for tax credits, especially because the House legislation imposes a shorter timeline before the credits expire.

The likely result: stalled investment, meaning less new energy and higher electricity prices. The Senate should stick with the existing “commence construction” requirement and set a more realistic expiration timeline than the House. 

Make foreign sourcing rules realistic, strategic and precise

The House bill includes overly burdensome restrictions on the use of foreign components for projects claiming tax credits. A major goal of these tax credits is to support U.S. manufacturing and supply chains to reduce reliance on foreign adversaries for critical materials and infrastructure. But the proposed changes are so severe that they’re essentially unworkable. A $50 part, unknowingly sourced through a third-party supplier, could upend a billion-dollar project.

That is a huge amount of risk for any company to take on. To comply, companies would need to immediately hire teams to closely inspect every link on their supply chains instead of hiring American workers to build and install cost-saving technologies. More likely, investment would just freeze up amid all the regulatory uncertainty as they await the final regulations for fear of noncompliance. 

The Senate can take a more clear, practical and simplified approach that applies to the taxpayer entity, company, or project, so that businesses can confidently and quickly invest in high-value domestic manufacturing, supply chains and energy production without ambiguity and red tape. 

Allow tax credits to remain fully transferable

Clean energy tax credits are currently fully transferable — meaning developers that don’t have tax liability can sell them to businesses that do. It’s a win-win for buyers and sellers, creating an efficient and competitive market that ensures the incentives are put to work in the economy.

The House bill would end that system, limiting transfers to a handful of large financial institutions that directly invest in the projects. This would weaken the financial viability of the projects, but it would also deprive companies across the economy of an opportunity to participate in project financing through tax credit transfers. The Senate should preserve transferability to keep the market functioning at its best.

Keep consumer credits to drive American industry

The House’s plan would also hurt consumers’ ability to afford modern and efficient technologies such as electric vehicles, rooftop solar panels and heat pumps by ending tax credits as soon as this year. While that would most immediately harm consumers and the companies selling those products, the consequences wouldn’t end there.

Reduced consumer demand would ripple across the economy, slowing investment in key 21st-century capabilities such as advanced manufacturing, battery production and critical mineral supplies, as well as more foundational sectors such as steel, glass and aluminum. The Senate can recognize that consumer demand is another form of policy certainty that drives investment across the economy and that keeping these credits in place will help maintain our global economic leadership.

The outcome in Congress will have major consequences for businesses across the economy — not just those making or buying clean technologies but all who depend on affordable power, strong domestic supply chains and U.S. global leadership. With those strengths at risk, their voices have never been more important on Capitol Hill.

[Connect with more than 3,500 professionals decarbonizing and future-proofing their organizations and supply chains through climate technologies at VERGE, Oct. 28-30, San Jose.]

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Chanel is looking beyond virgin materials to craft its signature tweed jackets and calfskin handbags. The 115-year-old luxury house shared plans on June 9 to create a new division to recirculate, recreate and repurpose used textiles. Chanel is calling the enterprise Nevold, a merger of the words “never” and “old.”

With purchased goods causing nearly two-thirds of indirect, Scope 3 carbon emissions for the privately owned brand, the launch advances efforts to reduce both its climate footprint and supply chain risks.

In addition, Nevold could help the fashion empire control and elevate the quality of recycled materials, a sticking point for elite brands. In this light, Chanel may be seizing an opportunity to corner a future market of high-end materials.

“We are not trying to replace what nature gives us,” Chanel President of Fashion Bruno Pavlovsky told Vogue Business. “But the ability to get the best quality with full transparency and traceability is becoming more difficult. Nevold is how we explore long-term alternatives — not for next season, but for the next generation.”

‘Strategic material infrastructure’

Sophie Brocart, the former CEO of LVMH’s Jean Patou brand who joined Chanel in January, will lead Nevold independently of the overall group’s fashion division. The effort has three partners so far: leather upcycler Authentic Material, yarn mill Filatures du Parc and materials sorter L’Atelier des Matières. The University of Cambridge and Politecnico de Milano will also be involved.

“The launch of Nevold is a positive signal that circularity is gaining traction in the luxury sector,” said Eva von Alvensleben, executive director of the Fashion Pact in Paris, a network of brands, including Chanel, to advance sustainability. “It reflects a growing recognition that material reuse and recycling must be scaled to meet the industry’s broader sustainability and net zero goals.”

“To me this sounds like the work of a sustainability visionary, less concerned about the luxury image and truly interested in creating impact,” said Cynthia Power, co-host of the Untangling Circularity podcast.

Nevold creates an “open” business-to-business system to manage — and potentially profit from — scrap or post-consumer materials that Chanel was unsure how to handle. (The brand does not incinerate unsold merchandise, according to Pavlovsky.)

“This signals a pivotal shift in how luxury approaches circularity,” said apparel sustainability consultant Liz Alessi. “Not just as a sustainability gesture, but as a strategic material infrastructure.”

Or, as reporter Jill Ettinger wrote in Ethos: “It’s a slow-motion land grab for control of the next generation of luxury inputs.”

How will it work?

Nevold has been several years in the making, according to Chanel Chief Sustainability Officer Kate Wylie. “There are two solutions already underway: a thread blended from end-of-life materials and virgin materials and a recycled leather to create reinforcements inside bags and shoes,” she posted on LinkedIn. Thirty percent of the brand’s handbags and 50 percent of its shoes already have recycled reinforcements, she added.

Indications of how Nevold will take shape may be found in its Paraffection division, a craftsmanship preservation effort that has snapped up at least a dozen artisanal workshops since 1985. These include button maker Desrues; embroiderers Montex, Lesage and Lanel; and glovemaker Causse. The late Karl Lagerfeld debuted the Métiers d’Art fashion show in 2002 to spotlight the work of the ateliers, who in 2019 got their own 84,000 square foot Paris headquarters, Le 19M.

“Whilst most brands are struggling to get a handle of their supply chain, Chanel own their subsidiaries through Chanel Métiers d’Art,” Lydia Brearley, founder of the Sustainable Fashion School in Malmo, Sweden, posted on LinkedIn. “Now, with the introduction of Nevold, they’re positioning themselves as the Maison de la Circularité in luxury fashion.”

Many questions remain, however, including whether Nevold will operate from a centralized location. Chanel describes a distributed “hub” approach that is likely to enjoin its internal R&D and waste materials with outside recyclers and processors.

“Chanel can vet the ecosystem of partners with a trusted company,” said Lauren Fay, founder and principal consultant at BFG Lab in New York City. “That efficiency saves money, builds trust with clientele and puts them at the forefront of the circularity conversation, which is great for their brand equity.”

Exclusivity + sustainability

Nevold’s open approach does not suggest exclusivity, which is one of Chanel’s five key “performance drivers.” But sustainability is another central driver alongside design, engagement, and people and culture.

Although famously buttoned-up about its raw materials suppliers, Chanel claims to source following the Responsible Wool Standard and Good Cashmere Standard. Most of its manufacturing likely centers in Europe, especially France and Italy.

Chanel was one of the last luxury brands to develop a public sustainability strategy, debuting its Mission 1.5° strategy in 2020 to align with the Paris Agreement. The Science-Based Targets initiative validated its net zero targets for 2040 last year. These include cutting all direct and indirect climate emissions by 90 percent by 2040 over a 2021 baseline, and slashing forest, land and agriculture-related emissions within Scope 3 by 72 percent. For the near term, the targets include halving emissions for Scopes 1 and 2 by 2030 and cutting them by 42 percent for Scope 3, with a 30 percent cut for forest and agriculture emissions.

From quiet luxury to loud circularity

Most luxury purveyors, Chanel included, have declined to pursue branded resale, letting third parties capitalize on the value-retention of $5,000 dresses and $10,000 handbags. But the sector is slowly starting to flash circular intentions. LVMH, parent of 75 brands including Christian Dior, Celine and Givenchy, gives second lives to waste materials and unsold goods within its LVMH Circularity strategy. And Kering, which runs more than 13 brands including Bottega Veneta, Gucci and Yves Saint Laurent, features a circularity strategy that features “upcycling, recycling and regeneration.”

And many in the group are investing in next-gen materials, including Hermes, which markets fungus-based handbags.

Still, the launch of Nevold is timed well for Chanel to meet new European Union requirements for apparel brands to take responsibility for their products after use.

“As regulations tighten and resources become scarcer, the brands that can turn yesterday’s inventory into tomorrow’s fabric will set the pace for the next growth cycle in luxury,” Nick Vinckier, VP of corporate innovation at the Dubai-based luxury retailer Chalhoub Group, posted on LinkedIn.

[Join more than 5,000 professionals at Trellis Impact 25 — the center of gravity for doers and leaders focused on action and results, Oct. 28-30, San Jose.]

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Devin Giles, a seven-year veteran of the sustainability team at International Paper, has stepped in as head of sustainability and ESG at home furnishings retailer Wayfair. 

Giles replaces Anna Vinogradova, who left her Wayfair position after four years for a role at another company, as yet undisclosed. Giles started in May and worked alongside her predecessor during a brief transition period. 

The switch was revealed in LinkedIn posts by Vinogradova and Giles, and confirmed by a Wayfair spokesperson. 

“This role brings together the work I love the most: driving sustainability through collaboration and innovation to make it part of how business gets done,” Giles said.

Wayfair, which had revenue of $11.9 billion in 2024, committed in 2021 to a 63 percent reduction in Scope 1 and 2 emissions by 2035 (based on a 2020 baseline). In Wayfair’s 2023 corporate responsibility update published in June 2024, the retailer reported a slight increase in that footprint. It does not have a publicly stated goal for cutting Scope 3 emissions from suppliers, which accounted for close to 99 percent of its footprint in 2023.

“This will require continued collaboration with our suppliers, logistics partners and stakeholders to deliver strategies that reduce emissions beyond our own operations,” Vinogradova said in a 2023 interview.

Other high-profile Wayfair sustainability initiatives include its target of zero waste by 2030 (the figure was 42 percent as of 2023) and the Shop Sustainably program, which the retailer uses to identify more than 33,000 certified sustainable products.

At International Paper, Giles recently managed the company’s renewables strategy — centered on using renewable or recycled sources for product development, and on developing circular manufacturing processes. She joined the company as a graduate intern in May 2017.

[Join more than 5,000 professionals at Trellis Impact 25 — the center of gravity for doers and leaders focused on action and results, Oct. 28-30, San Jose.]

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