RMS News

Certificate Trading: The Next Growth Driver for Recycling

By: Kim Holmes & Laura Thompson

March 17, 2021

The plastics recycling industry has failed to grow at a pace that will meet society’s expectations and the stated commitments of many consumer goods companies. As we’ve studied the system, we have learned there are many levers that need to be simultaneously pulled and pushed to create a system that can expand and sustain growth. First and foremost, there need to be ongoing efforts to design plastic packaging that can be recycled. Once packages are widely recyclable, we cannot simply push collection to grow supply without having an equal force moving demand. We have collectively learned the hard way that markets cannot be overly reliant on export if we are to build robust domestic recycling capabilities. Navigating the forces of these many challenges has led the industry to the moment we are at today — working to make change under intense pressures. We need massive growth and transformation for the plastic recycling industry to reach aggressive recycled content goals.

There is unprecedented focus on improving recycling in the U.S., and abroad. Lawmakers, and both the public and private sectors are considering what investments need to be made to modernize collection and sortation infrastructure. We may see the first adoption of extended producer responsibility schemes (EPR) take place in some states in 2021. Anticipating an increase in materials captured for recycling, GreenBlue’s Recycled Material Standard (RMS) has been developed to help advance the use of recycled materials. 

In other words, EPR can help to create stable funding for some aspects of the system. But there are parts of the plastics recycling system that also need transformation beyond what EPR systems typically address – namely, the reclaimers.  

Let’s take plastic films, for example. An EPR system can help finance the collection, sorting, and even subsidize the sale of low-grade plastic films. But where are those bales to go? We’ve seen composite lumber companies do their part with commercial sources, to the point where some stakeholders think it’s the only market for film. Indeed, there are a handful of recyclers in the U.S. that have found a way to capitalize on the low-value feedstock, but the existing capacity for reprocessing  film is  a small fraction of the capacity needed. When collected, film largely meets a dead end at MRFs today. How do we further catalyze investments to overcome limitations at the reprocessor level? We need innovative solutions.

Certificate trading systems (also known as environmental commodities) have served to create radical transformation in other sustainability sectors, and are now being developed for the recycling industry. These systems are routinely used by policy makers to support transformation. The most commonly cited commodities are carbon offsets and renewable energy certificates (RECs). Certificate trading was also used in the 1990s to combat acid rain (SO2 emissions) and NOx emissions. These programs were so successful that they have been somewhat forgotten. But it is worth noting that in addition to the change that occurred, the cost to industry was much lower than expected. In addition to systems created by policy makers, voluntary systems have also proven to be highly successful. The Center for Resource Solution, a US-based non-profit, developed the Green-e program in 1997, as a means to supplement the patchwork of state and regional policy efforts. Almost half of the installed wind capacity in the US now participates in Green-e certified transactions. 

Building on the same concepts that underpin other environmental commodities, The RMS includes a certificate based trading mechanism we call Attributes of Recycled Content (ARCs). But we are not alone. In fact, due to the recent development of several similar schemes, the World Wildlife Fund (WWF)  developed a position paper that thoughtfully outlines the best practices and necessary safeguards for what they refer to as “plastic credits”. Because ARCs serve as a cornerstone of the Recycled Material Standard (RMS), we felt compelled to highlight how our approach aligns with key provisions of the WWF position paper.


WWF warns that credit claims may not be clear or explicit in what they represent. The RMS and ARC system is very clear. Each ARC represents the buyer’s financial support for the processing of one ton of recycled plastic. ARCs cannot be used to make explicit claims of “recycled content.” The purchase of ARCs represents an investment that financially supports the development of plastics recycling technology.  

Some programs suggest that credits or certificates can be used to “offset” a plastic footprint or to move toward “plastic neutrality”. But these terms are not yet fully defined or well understood. As these concepts evolve, we look forward to being part of the dialog.

Matching certificates to like materials

If a company chooses to buy certificates to support an on-product claim, they should first start by quantifying their plastic usage by material type. Tools such as the ReSource Footprint Tracker or Guidelines for Corporate Plastic Stewardship can be used to support this endeavor. 

The RMS only allows for labeling if certificates match the same material categories used in the package at at least 70% of the equivalent volume1. WWF points out this is a key consideration in a credit trading system, as the credits (which now represent investment) need to help directly connect the recycling and manufacturing of specific products. ARCs are originally generated by certified reprocessors, where detailed accounting and third party auditing occurs. By design, our labeling system relies on a brand owner matching certificates to the same materials used in a product or package. 

Double counting 

One of the real risks for a credit trading system is that a claim made on the same material could be made twice, or by multiple parties in the system. This would inflate the true impact of the certificate or investment. With all trading systems, there should be a means to ensure that certificates are unique, and come from a verified source. The RMS stipulates that ARC generators must be certified by a third party auditor. Each ARC that’s generated will be given a unique serial number and traded through a secure registry. In fact, the ARCs can only transact through the registry to assure no double counting.   


The basic concept of additionality is often described as a means to assure that an activity (in this case recycling) is moving a system beyond business as usual. As such, many standards have developed various tests to assure that a project is, in fact, additional. For the RMS, we modeled our additionality tests after the same criteria used in the UN’s Clean Development Mechanism (CDM). 

The RMS has clearly defined what type of facilities or equipment are eligible, and those criteria will be evaluated by auditors. Only the material processed on those qualifying assets, as defined by the additionality rules, can generate ARCs.  

Standard developed with credibility

WWF also warns that certificate trading systems should only occur within the boundaries of a credible standard developed and maintained in accordance with the ISEAL best practices. The RMS has been developed in partnership with NSF International using their consensus body approach, supported by a multi-stakeholder advisory group and fully vetted through a ten week public comment phase. Certified entities and companies making any claims relating to supporting investments through ARCs can feel confident about the integrity and transparency of the program.

1.Revised June, 01 2023 to reflect the RMS Label and Trademark Guidelines published November 2, 2021 (https://www.rmscertified.com/wp-content/uploads/2021/11/rms-LabelTrademarkGuidelines.pdf)