Unwanted plastic is clogging seas and rivers. Instead of cutting production, polluters are backing a ‘green’ scheme that burns it to make cement

After a gruelling day paddling along the San Juan River through downtown Manila, Boyet Tingson draws up his fibreglass 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 156 Philippines pesos, less than $3—just enough to see his family through 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, who with his wife receives a premium from PCX of half a peso for every kilogramme of plastic they collect. 

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

Each year the world produces about 400 million tonnes of plastic waste—roughly the combined weight of all the people on the planet—and just 9 per cent is recycled. This week 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. 

Instead, 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 Global Alliance for Incinerator Alternatives, a campaign group.

“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,” he said. “If those credits are actually going towards a bad thing, like burning, then it just adds insult to injury.”

Responding to questions 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 tonne 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 tonnes 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”, and PepsiCo Philippines announced in 2021 that all of its food brands “are now officially Certified Plastic Neutral”.

Analysis by SourceMaterial shows that just 14 per cent 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 Bigte, some 30 kilometres north of downtown Manila, Melogie Bermudez woke one morning in September to find a fine 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 coughs, colds and asthma, says Bermudez, whose two-year-old daughter was hospitalised with pneumonia. Leaves on the banana trees turned white. Chickens’ eyes became red and goats grazing on dust-strewn grass developed bloated stomachs.

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

It’s unclear if plastic residue is a component of the dust. But cement accounts for some 8 per cent 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,” she 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 that co-processing “reduces reliance on fossil fuels, and is conducted under controlled conditions to minimise emissions”.

Republic Cement did not respond to requests for comment.

‘It doesn’t make sense’

SourceMaterial used a methodology developed at Emory University in Atlanta to estimate carbon emissions from the plastic PCX sends for burning, working with scientists at Leeds University and the Global Alliance for Incinerator Alternatives to scrutinise the calculations.

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

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

PepsiCo Philippines’ credit purchases also all went towards 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 shows 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 the Philippines and a former UN adviser.

An engineer at Holcim Philippines, the regional arm of the Swiss-based cement company, who asked to remain anonymous, said that burning plastic can also emit chlorine, a poisonous gas that escapes into the atmosphere without special equipment to absorb it—which many cement plants do not have.

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

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.

Plastics also contain more moisture than coal and need to be burned at higher temperatures, releasing more nitrogen oxides, dangerous pollutants, the engineer said. The health risks should never make plastic a viable fuel, said Emannuel.

“Extremely toxic compounds have been found in the exhaust gases of cement kilns co-processing waste,” he said, adding that cement kilns in the Philippines are not required to test for any of these, including dioxins linked with cancer. “Despite not being able to monitor these toxic emissions, the government is actively promoting co-processing as a solution to plastic waste.”

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: 

“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,” describing 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 kiln 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 spokesman said ​​that 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.

‘Bare minimum’

PCX is supposed to check emissions data from the cement companies which 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 to remain anonymous. 

In 2022 PCX split into a commercial arm that sells credits and a non-profit 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 incentivised 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,’ 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.”

PCX said: “PCX began as a non-profit 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 non-profit operation.”

Self-reporting

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

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 tonnes 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” ‘brand certification status’, including for Nestlé Philippines, did not include a footprint. And while PCX’s rules require companies to submit their reporting to a third-party auditor, 61 per cent 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”, while 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 tinned goods manufacturer owned by the Po family, one of the Philippines’ richest dynasties. Century declared a footprint of 10,378 tonnes and bought 15,461 credits, the data shows. ​​Century said it had spent about $1.1 million.

Century’s chief executive, Christopher Po, is the husband of PCX’s 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 that the duplication resulted from several Century brands sharing credits with the same 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.

Around a third of Verra’s 41 listed projects will involve burning plastic. So far just one has issued credits, priced at an average $500 a tonne. The registry could 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 in place of production cuts, documents submitted to this week’s UN summit show. 

Responding to questions from SourceMaterial, a Verra spokesman 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.

The cement industry, meanwhile, 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 who provide the raw material for plastics have also been urging 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 Programme said:

“UNEP does not support burning plastics,” adding that burning plastics in cement kilns is “a potential option that could be used only as a last resort”.

Despite this, 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 UNEP 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 per cent 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 Environmental Investigation Agency, a non-profit group. 

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

This story was produced in collaboration with Philippines journalism cooperative Cover Story with support from Internews’s Earth Journalism Network.

Headline picture: Edwin Bacasmas/CoverStory.PH