A plastic offsetting project backed by a food and drink multinational has been suspended on Verra’s plastic credit registry following complaints by the local community that the recycling facility was built illegally close to their land and without proper consultation, leading to withdrawal of involvement by the multinational.

Backed by French food corporation Danone and aiming to collect around 170,000 tonnes of plastic in Indonesia by 2030 through the operation of five waste processing facilities across the country, the project saw its accreditation by crediting standard Verra suspended in May last year in response to community complaints about the siting of one of the facilities in Bali.

Danone has since withdrawn its own involvement with the Bali facility, with the local operating company subsequently looking for a new investor, according to Unearthed, an investigative journalism operation run by Greenpeace.

The Bali facility was owned by PT Reciki Mantap Jaya, a subsidiary of the Indonesian waste management company Reciki Solusi Indonesia, though in March, the latter withdrew its support as a shareholder in Mantap Jaya, with the recycling facility reported to be reducing headcount and battling equipment problems.

Danone has been frequently identified as Indonesia’s biggest plastic polluter in waste audits by the Break Free From Plastic (BFFP) campaign, largely due to its subsidiary Aqua that is the country’s biggest bottled water brand.

The French multinational has pledged to recover more plastic than it uses in Indonesia by 2025, and the plastic offsetting project Reciki, project 2649 under Verra’s Plastic Waste Reduction Standard, marked one of the first and largest schemes to be registered.

Reciki built the waste processing facilities backed by Danone in public-private partnership deals with local governments, whereby local authorities provide the land for the facilities, and adequate community consultation was supposed to occur under the terms of the agreement.

The Bali facility – Samtaku Jimbaran – opened in 2021, with Verra registering Danone’s offsetting project in Dec. 2022. But a few months later, in May 2023, Verra opened a quality control review of the scheme in response to complaints from local stakeholders.

The review is still ongoing, with the status of the project marked as “on hold” on Verra’s register and the Bali facility continuing to operate, though with an unclear future now that Danone has withdrawn its support.

The multinational declined to tell Unearthed whether it would continue to seek accreditation from Verra or the wider scheme, saying that “while we have used project certification using the Verra scheme in the past, we have not purchased plastic credits from this project”.

The Danone spokesperson stressed that further research is required to test the effectiveness of plastic credits, and that it would be guided by the principles laid out in the UN Global Treaty on Plastics.

PLASTIC CREDIT MOMENTUM

Pressure is mounting to include plastic credits in the UN plastics treaty, for which the fourth round of negotiations is taking place Apr. 23-29 in Ottawa, Canada.

The Intergovernmental Negotiating Committee (INC) is tasked with developing an international legally binding instrument on plastic pollution, including in the marine environment, with the process first starting with a UN Environment Assembly resolution in Mar. 2022, and slated to conclude by the end of the year at the INC-5 session, scheduled to be held over Nov. 25-Dec. 1 in Busan, South Korea.

Japan, Canada, and the EU are urging binding requirements to reduce the use of virgin plastic polymers and restrict toxic plastics, while the plastic industry and major oil and petrochemical exporters, including Saudi Arabia, argue that the text should focus on waste management.

The final text is set to have large implications for how the world will deal with the plastic pollution crisis and its impact on nature and global biodiversity, as well as for the early plastic credit market.

Credit standard Verra is an accredited UN observer and active participant in the negotiation process. Along with Plastic Credit Exchange (PCX) and Plastic Bank, it is advocating for plastic credits to be included in the treaty as a key financing mechanism to help bridge the funding gap on waste collection and management, poised to reach an estimated $40 billion by 2040.

Ventures such as CleanHub, which operates networks of waste recovery projects in developing countries, are popping up funded by the sale of plastic credits.

COMMUNITY COMPLAINTS

The complaints received by Verra from communities local to Samtaku Jimbaran during the period Dec. 2022 to Apr. 2023 included allegations such as:

• The facility breached Indonesian regulations that prohibit the siting of a recycling plant within 500 metres of residential housing, with some housing reportedly as close as two metres away
• Health issues experienced by some residents due to the smell from the facility such as breathing problems and headaches
• A lack of full consultation with local people before the facility was built

Indeed, satellite imagery indicates that more than 100 homes were sited within 500 metres of the site before it was built, with some less than 100 metres away, according to Unearthed.

The Bali facility receives local municipal waste, sorting around 40% of the plastic in that waste to be sold on for recycling, with the remaining low-quality plastics then converted into pellets for waste-to-energy processing, according to Danone project documents.

Danone originally expected to issue plastic credits from its Indonesian offsetting project, yet later changed its plan to say that credits would not be issued and that the Verra scheme would instead be used as independent certification of the amount of plastic it is recovering in Indonesia.

The company sits on the advisory board for Verra’s plastic credit programme and was part of the 3R initiative, one of the initial efforts that developed the concept of plastic credits.

By Bryony Collins – bryony@carbon-pulse.com

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