To minimize plastic waste, startups are making gradual use of blockchain technology, but the technology has yet to realize its full potential.
It is difficult for corporate leaders to determine whether a new technology is ready for use, and blockchain is no different. This is odd given that blockchain is sometimes described as a “trust technology.”
Blockchains may be viewed as networks of virtual ledgers capable of securely storing and distributing data without the need for a central authority. Unlike most digital technologies designed to ease connection and duplicate procedures, blockchain can tokenize, securely distribute, and transfer anything of value (such as a person’s vote or financial assets) to persons on the network.
The capacity to assign and transmit unique value to certain assets has proven particularly effective for facilitating the emergence of new markets (e.g., Bitcoin and Ether) and is currently being utilized to address the most important global issues.
Plastic packaging: transforming a liability into an asset
The escalating plastic waste epidemic is a major area where blockchain might play a significant role in effecting change. In 2019, analysts predict that plastic garbage would amount to around 6.3 billion metric tonnes (mt) with a value of $7.2 trillion. Around 90,5% of all plastic ever produced has never been recycled. By 2050, humans will have accumulated over 12 billion metric tons of plastic garbage, enough to exceed all the fish in the ocean, resulting in an economic loss of almost $14 trillion. Modern technologies, including social media and applications promoting recycling and encouraging change, have considerably increased public awareness of the problem. Litterati, for instance, has developed an app for sharing geolocalized, brand- and item-tagged photographs of rubbish. Students complained an abundance of plastic packaging near their school, prompting public institutions to convert from plastic to paper packaging.
Beyond public awareness, a solution to the plastic waste problem will involve a significant shift in public behavior to stop packaging from leaking into the environment as well as an increase in resources to improve and speed the innovation process. Presently, the majority of plastic waste innovation projects done by producers, merchants, research institutions, non-governmental organizations, and trash management are compartmentalized, limiting their effectiveness. They are rooted in old modes of thought rather than seeking a transformation in the system.
Such a transition will necessitate a shift in the real and perceived value of plastic packaging, so that it is viewed as an asset rather than a liability. Economic, social, and ecological values must be united, and market mechanisms must be developed to assign, transmit, and trade value. This may be represented by crypto-credits or blockchain tokens. To be genuinely successful, these credits must incorporate the aforementioned principles, such as carbon incentives.
Technical developments in the handling of plastic garbage
Existing technological advancements can aid in each phase of plastic waste management, from asset generation and appraisal through transfer and exchange. To optimize collection and recycling (and minimize global poverty), the Canadian business Plastic Bank has established collecting centres in Haiti, the Philippines, and Indonesia (more collection centres are forthcoming in Egypt and Colombia), which purchase garbage by kind and weight. Participants bring their plastic packaging waste to one of Plastic Bank’s collection facilities and gain credits on their blockchain-based app using mobile-accessible smart contracts.
Circularise, a Dutch start-up formed in 2016, is another project that focuses on asset value and transfer transparency. Circularise has developed a blockchain-based solution that gives an exact pricing system for all recycled materials and can reveal the number of times a product has been recycled. In the case of textiles and plastics, for instance, information on recycled content is transmitted to brand owners (e.g. Calvin Klein) via both the Circularise system and a third-party tracer.
Several other approaches are anticipated to develop in order to speed and promote plastic package recycling activities at the enterprise level. Empower, a Norwegian startup that utilizes blockchain tokens to promote donation-based recycling, is one example. For every euro provided by an organization, Empower pledges to remove the equivalent weight of plastic garbage. Thus, if Nestlé gives €1,000, Empower will collect 1,000 kilograms (€1/kg) of any plastic packaging trash from Nestlé.
But, the potential presented by blockchain extend far beyond. Being a technology that facilitates the creation and transfer of assets, it may link each piece of plastic packaging to the customer, allowing it to be viewed as an asset with monetary, social, and ecological value. This might be accomplished by implementing supply chain-tracking technology such as digital watermarks, RFID, NTFS, or IoT. Instead, a QR code might be written on the package. A simple code scan may instantly attach data to an app and earn a cryptocredit.
Blockchain also enables the creation of a “material passport” for each item, holding vital information on the packaging aspects, such as the material composition, the ratio of virgin to recycled plastics, and the number of times it has been recycled.
The secret is to add value to garbage
However, the near-zero residual value of plastic packaging makes any new business strategy very unfeasible. This must be reviewed immediately. A possible option would be to adopt the concept of the United Kingdom’s deposit-return plan. This adds a modest cost to the overall price of each product, which is refunded upon return of the empty container. In the event of plastic packaging, the consumer would receive a crypto-credit and be responsible for placing the packing in the proper container.
Similar to how microcredits have altered global development, the simple act of assigning value to packaging and linking it to customers through blockchain has the potential to radically alter consumer behavior and business endeavors over the next few decades.
Considering the pioneers of technologies, from social media (Facebook) to e-commerce (Amazon) to e-marketplaces (Airbnb), it is evident that there are tremendous opportunities and first-mover advantages to be gained by leveraging blockchain in emerging digital markets where asset valuation is not yet formalized. The problem of plastic packaging pollution must also be addressed. Someone from inside or outside the sector who understands the opportunity blockchain brings and has the foresight and resources to use it to bring about large-scale, sustainable change is required.