Unwanted plastic is clogging seas and rivers. A ‘green’ scheme involves burning it to make cement.

(Editor’s Note: This story was produced with support from Internews’ Earth Journalism Network for the “It’s a Wash” special report.

SourceMaterial, a nonprofit investigative journalism organization, was a partner in the story’s production.)

After a gruelling day paddling along the San Juan River though downtown Manila, Boyet Tingson draws up his fiberglass boat at a shipping container on the concrete bank where Lorme Villarba and her husband Tony weigh his day’s catch.

Tingson, a 49-year-old father of four, is fishing for plastic. The bottles, bags and other refuse he has collected will today earn him P156, less than $3—just enough to see his family through to their next meal. 

The container is supplied by PCX, or Plastic Credit Exchange, a Philippines-based plastic offsetting company. By collecting and disposing of plastic refuse, it generates credits that some of the world’s biggest companies, like Nestlé, Colgate-Palmolive and Pepsi Cola Products Philippines, can then claim to be “cancelling out” the waste they generate. 

“After they collect the plastics, we have no idea what they do with them,” says Tony Villarba, who with his wife receives a premium from PCX of half a peso for every kilogram of plastic they collect. 

A SourceMaterial investigation found that more than 80% of the plastic collected under PCX’s program, marketed as “meaningful, credible and sustainable,” is delivered to cement manufacturers who burn it for fuel, generating thousands of tons of greenhouse gases, as well as chemicals linked to cancer.

Each year the world produces about 400 million tons of plastic waste—roughly the combined weight of all the people on the planet—and just 9% is recycled. This week, Nov. 13-19, as the United Nations meets in Nairobi to draft a global treaty on plastic pollution, the conglomerates that account for much of the waste will be lobbying for “innovative” measures like the growing offsetting market to be part of the solution. 

But it’s fast becoming part of the problem, allowing polluters to buy their way out of trouble, says Neil Tangri, science and policy director at the campaign group Global Alliance for Incinerator Alternatives.

“The big challenge is we need to make less plastic, but the whole point of plastic credits is it gives plastic companies a ‘Get Out of Jail Free’ card,” Tangri said. “If those credits are actually going toward a bad thing, like burning, then it just adds insult to injury.”

Responding to a question from SourceMaterial, PCX said: “PCX’s mission is to accelerate the transition to a circular economy and build a future where no plastic waste ends up in nature. And while we are very proud of the work we are doing in support of this mission, we also recognize that we are only delivering on one part of a broad set of solutions that need to be brought to bear by a wide range of players across the ecosystem to address this global crisis.”

‘It’s like a shapeshifter’

Each ton of plastic that PCX sends for “processing”—which covers a number of methods, including recycling—generates a credit. A company that buys a number of credits equal to the number of tons it produces is certified by PCX as “plastic net zero.”

Colgate says it aims to “deliver zero plastic waste solutions.” Nestlé’s website says it is “focusing on achieving plastics neutrality.” PepsiCo Philippines announced in 2021 that all its food brands “are now officially Certified Plastic Neutral.”

Analysis by SourceMaterial shows that just 14% of PCX credits are generated from recycling. The remainder are from “co-processing,” which PCX calls a “go-to solution in the area of plastic waste treatment and reduction” and involves burning plastic with coal to fuel cement production.

At Barangay Bigte in Norzagaray, Bulacan, some 30 kilometers north of downtown Manila, Melogie Bermudez woke one morning in September to find dust clinging to the saddle of the family’s motorcycle parked outside.

The dust was everywhere: on cars, tin roofs and plant pots. It was sticky and hard to remove.

Soon a number of local people fell ill, complaining of cough, cold, and asthma, says Bermudez, whose two-year-old daughter was hospitalized with pneumonia. The leaves on the banana trees turned white. Chickens’ eyes became red and goats grazing on dust-strewn grass developed bloated stomachs.

Bermudez and her neighbors attribute the pollution to the nearby Republic Cement works. Like several cement makers in the region, Republic fuels its kilns with plastic supplied by PCX.

It’s unclear if plastic residue is a component of the dust. But cement accounts for some 8% of the world’s carbon dioxide emissions—more than aviation. A scheme that claims to be good for the environment and the climate shouldn’t be fuelling a highly polluting industry, said Yuyun Ismawati, an adviser to the International Pollutants Elimination Network.

“They have just created a new hazard that didn’t exist before,” Ismawati said. “Physically we can see plastic, but when we burn it, it becomes more dangerous because it is invisible. It’s like a shapeshifter.”

PCX said co-processing “reduces reliance on fossil fuels, and is conducted under controlled conditions to minimize emissions.”

Republic Cement did not respond to requests for comment.

120,000 tons of carbon dioxide

SourceMaterial used a methodology developed at Emory University in Atlanta, Georgia, in the United States to estimate carbon emissions from the plastic that PCX burns, working with scientists at the University of Leeds in England and the Global Alliance for Incinerator Alternatives to scrutinize the calculations.

The data show that PCX’s current credits would release approximately 120,000 tons of carbon dioxide—the same as would be generated by driving 26,704 cars for a year—if the plastic destined for cement plants was burned. 

Nestlé Philippines has spent $732,900 on credits, all for burning and none for recycling, releasing an estimated 16,544 tons of carbon dioxide. It has been certified by PCX as “plastic net zero,” according to the database.

PepsiCo Philippines’ credit purchases also all went toward projects where plastic was burned.

PCX claims that burning plastic leaves no residues and emits less greenhouse gas than coal. PCX has “driven 67,000 tons of carbon reduction from coal replacement,” Business World reported last month.

But the company’s own data show that plastics are only rated as cleaner because coal must be transported over longer distances, giving it a bigger “carbon footprint.” 

Burning waste including plastics as fuel can release 1.7 times more carbon dioxide than coal-fired power plants for the same amount of electricity generated, according to Jorge Emmanuel, a scientist at Silliman University in Dumaguete City and a former UN adviser.

An engineer at Holcim Philippines, the regional arm of the Swiss-based cement company, said burning plastic can also emit chlorine, a poisonous gas that escapes into the atmosphere if there is no special equipment to absorb it. Many cement plants do not have such special equipment.

“The only benefit of replacing coal with plastic is not throwing plastic away into the landscape,” said the engineer, who requested anonymity.

From a climate perspective, it may even be less damaging to bury plastics in landfill sites, said Tangri of the Global Alliance for Incinerator Alternatives.

The engineer said plastics also contain more moisture than coal and need to be burned at higher temperatures, releasing more nitrogen oxides, dangerous pollutants.

‘It doesn’t make sense’’

Emmanuel said the health risks should never make plastic a viable fuel. “Extremely toxic compounds have been found in the exhaust gases of cement kilns co-processing waste,” he said, pointing out that cement kilns in the Philippines are not required to test for any of these. 

“Despite not being able to monitor these toxic emissions, the government is actively promoting co-processing as a solution to plastic waste,” Emmanuel said.

The Philippines is already failing to meet its obligations to reduce emissions under the 2015 Paris Agreement on climate change, and its approach with plastics is making it worse, he said, adding: “It doesn’t make sense.”

Nestlé Philippines said: “Our plastic recovery efforts focus on collecting and co-processing plastic waste as alternative fuel in cement kilns.” It described burning plastics as “an interim solution that lowers overall greenhouse gas emissions.” 

A spokesperson for Holcim Philippines said that the company strictly follows environmental regulations and that the high temperatures of its kilns and the addition of limestone as a “scrubber” prevent harmful gases from escaping. The company reports emissions data to the government in real time, he said. 

A Colgate-Palmolive spokesperson said ​it is working toward making all of its packaging recyclable, reusable, or compostable by 2025.

“In the Philippines, where recycling infrastructure is limited, our approach is to implement environmentally responsible and scalable options that have received government legislative approval,” he said.

The government and PepsiCo Philippines did not respond to requests for comment.

Market opportunity

PCX is supposed to check emissions data from the cement companies that burn most of the plastic it collects, but “it’s almost impossible to verify if this information is true,” said a former employee who asked not to be named. 

In 2022 PCX split into a commercial arm that sells credits and a nonprofit entity that oversees its standard. The company has an incentive to sell as many credits as possible and little motivation to enforce standards, the ex-worker said. “All of a sudden it was about market opportunity and how much money we were starting to make.” 

Buyers of PCX’s credits, meanwhile, are incentivized to ‘offset’ their plastic production as cheaply as possible. That usually means buying cement-fuel credits, which cost less than recycling ones. 

More than half of PCX’s credit sales are for “co-processing” in Antipolo City just outside Manila, at $115 per credit. The second most popular project sells cement-fuel credits at the same price.

Recycling credits start at $130 each and have far fewer buyers. Some of the most expensive projects, such as “Community Collection and Recycling in Thailand” at $633 a credit, have no customers at all.

“Ultimately, the buyer holds most of the power,” the former employee said. “They’re trying to develop a market that isn’t there, to a private sector that is reluctant and only wants to do the bare minimum.”

For its part, PCX said: “PCX began as a nonprofit operation with a mission to accelerate the transition to a circular economy and build a future where no plastic waste ends up in nature. This mission holds true to this day, even with the introduction of a for-profit entity to complement the continued efforts of our nonprofit operation.”

Self-reporting

As well as raising questions about emissions, SourceMaterial’s investigation uncovered potential conflicts of interest in PCX’s offsetting program.

Analysis of PCX’s database shows that verification for its “Plastic Pollution Reduction Standard” is mostly missing or relies on self-reporting by companies. 

PCX’s clients are expected to provide a “declared plastic footprint”—a figure for how much plastic they produce. Myro USA, a vegan deodorant manufacturer, “self-attested” a plastic footprint of 13.5 tons in 2020-2021 and received a “net zero” designation after buying 14 credits. 

SourceMaterial found that more than half of records for credit purchases that led to a “net zero” certification, including for Nestlé Philippines, did not include a footprint. And while PCX rules require companies to submit their reporting to a third-party auditor, 61% of net-zero-certified records showed no evidence of this.

PCX told SourceMaterial that some clients had been incorrectly labelled “net zero” because of a “technical error,” and that missing data on third-party auditors was the result of “a data migration error, and will be corrected very shortly.”

The biggest buyer of credits on the PCX registry is Century Pacific Food, a canned-goods manufacturer owned by the Po family, one of the Philippines’ wealthiest. Century declared a footprint of 10,378 tons and bought 15,461 credits, the data show.​​Century said it had spent about $1.1 million.

Century’s chair, Christopher Po, is the husband of PCX founder Nanette Medved-Po, who also chairs the Po “family council.” 

The database reveals apparent inconsistencies in Century’s portfolio, with a group of five unique credit serial numbers recurring 11 times. In separate responses, PCX and Century said the duplication resulted from several Century brands sharing credits with the same serial numbers. 

“The data is accurate and the footprint calculations and purchases are all verified to ensure that Century did achieve net zero plastic waste across all of the brands,” Century said, adding that PCX and Century conduct business at arm’s length and all transactions between them are reported to Century’s board. 

Other discrepancies were attributable to “recent issues with data entry within PCX’s online registry,” Century said. 

Century’s third-party auditor for the majority of its records, PwC Philippines, lists the company’s net zero certification as “pending”—though Century claims to have been “plastic neutral since 2019.”

PwC Philippines is committed to a “strict” verification process, a company spokesperson said. 

‘False solution’

Despite these concerns, the market for plastics offsetting is growing. Verra, the largest verifier of carbon offsets, launched a plastic credits registry in 2021.

So far, just one of Verra’s 41 listed projects has issued credits, priced at an average of $500 a ton. Around a third of them will involve burning plastic. The registry may soon be issuing nearly a million credits a year, according to an analysis provided to SourceMaterial by the Break Free From Plastic campaign.

Verra and PCX have joined a lobbying campaign to make offsetting part of a global treaty on plastics, while industry bodies representing major producers of plastic waste are advocating “innovative solutions” like offsetting rather than production cuts, according to documents submitted to this week’s UN summit. 

Responding to questions from SourceMaterial, a Verra spokesperson said that while burning plastic is a “vexing” issue, many regions do not have proper landfills or recycling facilities. 

“We know waste can’t stay in the environment, and, in terms of equity, kilns may be the best and most accessible option for properly managing waste in certain regions,” he said.

Meanwhile, the cement industry is pushing to ensure a continuing supply of plastic fuel. 

“Co-processing is an established and highly regulated waste management option” with a “high level of protection of human health,” the Global Cement and Concrete Association, which represents companies including Holcim, said in its submission. 

Petroleum-producing countries, such as Saudi Arabia, that provide the raw material for plastics have also been calling for solutions to pollution that stop short of cuts in production, the documents show. 

Opponents of offsetting include the Indigenous Peoples Major Group for Sustainable Development, whose submission to the UN calls offsets from cement fuel a “dangerous false solution.”

A spokesperson for the UN Environment Program said that it “does not support burning plastics,” and that burning plastics in cement kilns is “a potential option that could be used only as a last resort.”

Nevertheless, there are signs that industry lobbying is making gains. Burning plastic in cement kilns has the “key advantage of dealing with plastic waste at an industrial scale,” the United Nations Environment Program said in May in a report that endorses co-processing guidelines drawn up by Holcim and the German development agency GIZ. 

In January, a joint investigation by SourceMaterial, Die Zeit and The Guardian revealed that as many as 94% of carbon emissions offsets marketed by Verra could be ineffective. 

The world now risks replicating a discredited system with plastics, says Jacob Kean-Hammerson, an oceans campaigner at the nonprofit Environmental Investigation Agency. 

“If we think that using the same model is going to deal with plastic pollution, then we’re deluded,” he said.

See: Plastic producers should help Philippine towns, cities pay high cost of waste management