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The UN’s global plastic treaty negotiations are set to end in November, at which point new international legally binding rules on plastic pollution will be revealed. To learn more about how this might be implemented in practice, we caught up with Justin Wood, Vice President and Head of Europe, Middle East & Africa at the Alliance to End Plastic Waste.

 

What is the Alliance’s role in the implementation of the International Legally Binding Instrument (ILBI) on plastic pollution?

Once the ILBI is agreed the Alliance sees our role as one focused on implementation and working quickly to convert the agreement into on-the-ground progress that tackles plastic waste.

Helping to enhance countries’ waste management systems and increase their recycling rates is a crucial part of this, with recycling being an essential component of circularity alongside reduction and reuse and refill models.

Recycling enables a circular economy by keeping existing materials in use and circulation for longer, thereby reducing the need for virgin feedstock.

One often-overlooked aspect of making recycling economically viable is ensuring a reliable supply of clean feedstock streams, which is why it is vital for countries to have strong waste management systems that allow for the segregation of waste streams either pre- or post-collection.

We are an organisation that works with a wide range of project partners, including governments and other NGOs, to test, integrate, improve, and scale solutions for waste management and recycling.

As such, the Alliance is in a unique position to share the knowledge and expertise gleaned from our projects in both emerging and developed economies to support governments in developing and operationalising the national action plans needed to realise the ILBI’s targets.

How does the Alliance see itself supporting countries in implementing national action roadmaps to address plastic waste?

There is no one-size-fits-all solution to ending plastic waste in the environment, and countries’ diverse national and sub-national circumstances must be taken into account. This concept is further explored in the Alliance’s Plastic Waste Management Framework, which was developed with the support of Roland Berger.

From a global meta-analysis of 192 countries, the Framework identifies six categories of waste management and recycling maturities, Category I (‘Undeveloped Systems’) being the most nascent and Category VI (‘Developed Performing Systems’) having the most advanced.

By outlining key considerations and critical actions to implement that are specific to each maturity category, the Alliance aims to help inform governments about how to tailor their national action plans in order to advance or even leapfrog stages in the development of waste management systems.

These strategies are largely shaped by the Alliance’s on-the-ground experience, having been involved in around 80 projects trialling solutions in plastic waste management and recycling since we started over five years ago.

Through its Solution Model playbooks, the Alliance documents the key learnings gleaned from our projects in order to demonstrate what is possible and what is needed to drive the systems change necessary to end plastic waste leakage and drive a circular economy.

For example, our first playbook, ‘Engaging Households in Segregated Municipal Waste Collection’, maps out the lessons learned from Alliance projects implemented in Argentina, China, India and Indonesia to demonstrate how household waste segregation can be optimised to improve the volume and quality of material collected for recycling. Our intent is to collaborate with a wide network of partners, including governments and industry players, to further develop, strengthen, and scale these Solution Models.

Our ambition to drive waste management projects and initiatives that can be scaled is exemplified by our Bersih Indonesia project, where we are supporting the Malang Regent and the Regency’s Environment Department in trialling an end-to-end household waste management system.

One million residents are set to gain access to paid door-to-door, segregated household waste collection and processing services under Phase One of the initiative. Ultimately, the goal is to set up a financially sustainable waste management system that serves as a blueprint for further scaling and replication across Indonesia and other emerging markets.

The Alliance has raised US$375 million and catalysed capital amounting to $368 million from third parties. Where does this funding come from, and how much say do the funders have on the activities of the Alliance?

The majority of our funding comes from membership fees. To date, we have collected $375 million. Of this, 73% or US$271 million has been allocated to projects and other mission-related activities.

A unique element of the Alliance is that our membership convenes companies from across the plastics value chain including brands, waste managers, recyclers and enablers, and producers. In addition to funding, we rely on their technical input and guidance to enable the Alliance to develop holistic solutions to end plastic waste.

Beyond this, the Alliance is independent. Each project undergoes an internal and independent review process and final decision-making remains within the Alliance.

The $368 million in catalysed capital that you refer to is capital that we have mobilised from parties other than member companies, in the public and private sectors. These include impact investors. Our goal is to encourage these other parties either to co-fund our projects, or to fund other ideas connected to our work.

In 2023, the Alliance partnered with a female-led Indonesian social enterprise to overcome funding obstacles for their new food-grade rPET bottle-to-bottle recycling plant in Central Java. PT ALBA Tridi Plastics Recycling Limited, a new joint venture between Alba Asia Plastics Recycling Limited and Dhara Daya Sustainea, secured a blue loan from the Asian Development Bank (ADB).

Dhara Daya Sustainea, which is the local founder company and minority shareholder, faced equity requirements it could not meet. Due to its lack of credit history, commercial loans were inaccessible or offered at prohibitively high rates. The Alliance stepped in, providing a US$4 million concessional subordinated shareholder loan, enabling PT ALBA Tridi to meet their equity contributions to unlock a crucial loan of US$44.9 million from the ADB.

Because the Alliance is a charity, the types of funding we provide and our “return expectations” are often quite different to those of other finance providers. For example, the Alliance usually makes grants or concessional rate loans – with the expectation of an impact return rather than a financial one.

Private equity, by contrast, looks to make an attractive internal rate of return. This means that the Alliance’s capital can be blended with the capital of others in powerful and creative combinations.

In many ways, the capital directly under the control of the Alliance can work as a catalyst, unlocking capital from third parties that might otherwise be reluctant to invest. This is because the Alliance’s capital helps to de-risk projects so that commercial capital can then continue the process of scaling and replicating them.

We typically fund initial capital expenditure and selectively provide working capital to projects to help scale projects in the growth stage. This early-stage funding has an inherently higher risk as innovative approaches or technologies are assessed, but it enables de-risking both from a capital structure and technical perspective. 

Your 2023 report identifies digital watermarking as a crucial step towards making the industry more sustainable. Could you let us know more about your thoughts on this topic, and talk a bit about how this technology has developed over the past few years?

Digital watermarks - imperceptible codes that cover the surface of a packaging item and can be later identified by high-resolution cameras in the sorting process – have the potential to significantly improve sortation rates, which is essential to providing clean feedstock streams for recycling.

Recent semi-industrial trials for the digital watermarking initiative HolyGrail 2.0 show a 99% detection rate and a 93% to 95% purity of sorted materials.

Trials from earlier this year also show that digital watermarking technology has the potential to more effectively sort flexible plastic packaging, which is currently very difficult to process due to its lightweight material, high contamination levels and multi-polymer composition.

Conducted in a material recovery facility in Germany, trials demonstrated the technology’s sorting capability on food-grade PP flexibles and hygiene-grade PE flexibles at efficiency rates not possible with other technologies.

Additionally, in providing digital passports for packaging items, industry-led initiatives like HolyGrail 2.0 have the potential to provide accurate information on actual recycling rates at the level of specific products and brands, which would inform businesses and governments on the effectiveness of their systems, focus the efforts of Producer Responsibility Organisations (PROs), and enable the determination of eco-modulated EPR fees based on real recycling rate data.

Informal waste workers in developing countries often work in extremely precarious and dangerous circumstances. What is the Alliance doing to improve their outcomes, and what more needs to be done?

In many developing economies, the informal sector plays an outsize role in waste management, being responsible for as much as 80 percent of plastic collection in countries classified under Category I (‘Undeveloped Systems’) and Category II (‘Incipient Systems’) in our Plastic Waste Management Framework, accounting for over 60 percent of all 192 countries assessed in the report.

In trying to evolve their waste management systems, it is vital that governments deploy policies that support, fund and integrate waste pickers’ contributions, ensuring a just transition which leverages the full potential of the informal waste sector to drive plastic collection and recycling rates.

Within the Alliance’s current portfolio, we support 18 projects in 10 countries that involve the informal sector, many of which seek to improve the livelihoods and working conditions for informal waste workers. Almost 8,000 waste pickers have benefitted from better income, working conditions, and social benefits under these programmes, a significant percentage of which are women.

For example, in South Africa, we support the African Reclaimers Organisation (ARO), a nonprofit that unites 6,000 informal workers, where we have established facilities that provide a safe environment to sort, process, and sell recyclables. Prior to our involvement, waste plastic was being brought by waste pickers to a makeshift base of operations under a highway overpass.

Moving forwards, we believe that coordinated efforts should be made multilaterally to provide a holistic set of guidelines to support the informal sector’s just transition, including by improving and iterating upon existing national systems and policy structures.

At a micro level, it is vital that waste pickers’ roles are legitimised and formalised through providing workers with safe and secure working environments and protecting their labour rights. Creating organised services such as waste picker cooperatives, associations, or community-based organisations can help with this, improving waste pickers’ position when negotiating better prices and work conditions, ultimately improving their livelihoods.

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