How carbon credits can enhance the earning potential of plastic recyclers

Plastic recycling threatens to stall

The Dutch plastic recycling sector is facing high costs and low revenues. Recycled plastic must compete with cheap new plastic, making it difficult for many innovative companies to survive. At the same time, recycling is crucial for meeting climate targets: it prevents CO₂ emissions and conserves resources. 

Carbon credits as a solution

Carbon credits – tradable certificates for avoided CO₂ emissions – can offer an additional revenue model. By certifying CO₂ reduction, companies can sell carbon credits on the voluntary carbon market. This can generate extra income and make investing more attractive.  

The case of Umincorp shows that these credits have the potential to make a difference, provided certification and market access are arranged in time. Without guarantees of sales, however, it remains uncertain, as the market for carbon credits is still small. The report therefore recommends starting certification early and having the government play a temporary role as buyer or prefinancier. This will create a mature market and make plastic recycling profitable. 

Multiple routes to a profitable sector

Invest-NL sees carbon credits as an opportunity to mobilise capital for circular innovations. This research builds on previous explorations into valorisation of climate performance and structural cost reduction in the plastic recycling sector. Together, these studies demonstrate that there are multiple routes to improve the business case for recyclers: cost reduction and new revenue models.  

We call on recyclers, policymakers and investors to collaborate on developing methodologies and growing the market. In this way, we strengthen the earning capacity of plastic recyclers and accelerate the transition to a climate-neutral economy.