The INC process: five sessions to a binding treaty
The United Nations Intergovernmental Negotiating Committee (INC) on plastic pollution was established by UNEA resolution 5/14 in March 2022, mandating the negotiation of a legally binding global instrument on plastic pollution covering the full lifecycle of plastics. The process was designed to conclude within two years, with five negotiating sessions planned before a final adoption conference.
INC-1 convened in Punta del Este, Uruguay in November 2022, establishing working groups and identifying the structural elements of a potential treaty. INC-2 (Paris, May–June 2023) produced the first draft negotiating text. INC-3 (Nairobi, November 2023) narrowed but did not resolve the core ideological divide. INC-4 (Ottawa, April 2024) produced a consolidated text with hundreds of bracketed provisions indicating contested language. INC-5 (Busan, South Korea, 25 November to 1 December 2024) was the final scheduled session before planned treaty adoption — and the one that failed to deliver.
What happened in Busan
INC-5 was widely anticipated as the session at which delegates would finalise treaty text. Negotiations were intensive, with six working groups operating simultaneously across treaty elements ranging from plastic product design to financing mechanisms to chemicals of concern. But the session ended without a concluded text after the final plenary on 1 December 2024 exposed a fundamental impasse that no procedural mechanism could bridge.
The core dispute is structural: whether the treaty should include legally binding caps on virgin plastic production, as championed by the High Ambition Coalition to End Plastic Pollution (HAAC) — a 44-nation alliance including the EU, UK, Norway, Canada, Chile, and Rwanda — or whether it should confine itself to downstream waste management, the position advanced by Saudi Arabia, Russia, Iran, and several Gulf Cooperation Council states. The petrochemical-aligned bloc rejected the chair's compromise text, which contained bracketed production cap language, as predetermining an outcome requiring explicit consensus. After 36 hours of extended plenary sessions, the chair declared an impasse and proposed a resumed negotiating session, designated INC-5.2, to be convened in the second quarter of 2025.
The contested articles and what they mean for credits
The draft treaty text contains several articles with direct relevance to plastic credit markets:
- Article 7 (Plastic production): The most contested article. The HAAC text includes global targets to reduce primary polymer production by 40 percent by 2040 from 2020 baseline levels. The counter-text omits any production-side obligation. The outcome of this battle determines the long-run volume of plastic entering the waste stream — and by extension, the scale of the collection and recovery challenge that credits are designed to address.
- Article 11 (Collection and recycling): Both blocs accept some form of national collection and recycling targets, though the ambition level differs sharply. For the credit market, this is the decisive article. National collection targets that countries cannot meet domestically through public infrastructure create demand for supplementary market mechanisms — including plastic credits from certified projects. The precise language on supplementarity and market-based compliance tools will determine whether credits can be formally recognised as a treaty compliance mechanism.
- Article 12 (Financing and capacity building): Addresses the financial architecture for supporting LMIC implementation. Language on supplementary compliance mechanisms — including market-based instruments analogous to the Paris Agreement's Article 6 mechanisms — is partially agreed but not finalised. A treaty-mandated fund channelling credit revenue to LMIC projects would substantially expand the project finance available to the market.
- Article 13 (Chemicals of concern): Addresses hazardous additives in plastic formulations. Restrictions on chemical additives affect the recyclability of collected plastic and therefore the economics of recycling credit projects, particularly those involving multi-layer packaging or PVC-containing waste streams.
The High Ambition Coalition's demands
The HAAC entered Busan with a detailed policy platform and significant diplomatic momentum. Its headline demand — a binding production cap — reflects a coalition-held view that recycling and collection infrastructure will always be outpaced by production growth if the production engine is unrestrained. The coalition cited OECD data showing global plastic production reaching 460 million tonnes in 2019, projected to triple by 2060 under business-as-usual trajectories — a dynamic that makes waste management alone mathematically insufficient.
HAAC members also supported mandatory EPR schemes in all signatory nations, prohibition of certain single-use plastic formats, mandatory minimum recycled content targets, and a financing mechanism analogous to the Green Climate Fund to channel treaty compliance finance to low-income countries. France was among the most vocal in calling for treaty language explicitly recognising plastic credits and offset mechanisms as legitimate supplementary compliance tools under Article 11 — a position that, if adopted, would transform the market's regulatory status.
The petrochemical bloc's position
Saudi Arabia and its allies have consistently framed production caps as economically discriminatory and scientifically unwarranted, arguing that the appropriate response to plastic pollution is better waste management infrastructure, not restrictions on a legitimate industrial product that serves essential functions in food safety, medicine, and construction. The bloc has supported treaty provisions focused on waste collection investment, technical assistance for LMICs, and voluntary industry-led sustainability commitments — a framework closer to the structure of existing voluntary plastics agreements than to a binding regulatory instrument.
The American Chemistry Council and PlasticsEurope, both active INC observers, published position papers during INC-5 arguing that the treaty should be framed as a waste management and circular economy framework rather than a production regulation instrument, and warning that production caps would reduce the availability of materials essential to the energy transition — including plastic components in solar panels, wind turbines, and electric vehicles.
Market implications of treaty scenarios
For credit market participants, three treaty scenarios carry distinct market implications. The positive scenario — INC-5.2 produces a treaty with binding Article 11 collection and recycling targets and explicit recognition of market-based compliance mechanisms — transforms credits from a voluntary instrument to a compliance tool with treaty-level backing. National governments in the Philippines, Indonesia, Kenya, and other major project host countries would face legal obligations to hit collection targets, creating institutional demand for credit infrastructure beyond the current voluntary market. Systemiq's central scenario projects a $4.8 billion market by 2030 under this outcome.
The neutral scenario — a treaty with weak or voluntary Article 11 language and no explicit market mechanism recognition — extends the status quo. The voluntary market continues to grow on the basis of corporate ESG commitments, but without the step-change in demand that treaty-mandated compliance would generate. Systemiq estimates this scenario produces a market 30 to 40 percent smaller than the central scenario by 2030.
The negative scenario — treaty negotiations collapse entirely — creates prolonged uncertainty but does not eliminate demand. The EU PPWR, India's PWM Rules, and a growing body of national EPR legislation create compliance demand independent of any treaty, sustaining the market at a lower but still significant scale.
What corporate buyers should do now
Companies with existing plastic neutrality commitments — including targets made under the Ellen MacArthur Foundation's New Plastics Economy Global Commitment, which covers packaging commitments from over 1,000 organisations — should maintain procurement plans calibrated to those commitments regardless of INC-5.2 outcomes. Waiting for treaty clarity before acting is not a viable strategy for organisations with 2025–2030 plastic targets. The commercial case for quality credits from certified projects is unchanged by treaty timelines: environmental impact, social co-benefits, and regulatory goodwill are all secured by purchase, independent of what happens in Busan or its successor conference.
Corporate sustainability teams should however monitor Article 12 financing provisions at INC-5.2 closely. If a treaty-mandated fund channelling credit revenue to LMIC projects is established, it could create new project finance mechanisms, lower the cost of credit development in high-additionality geographies, and increase available supply of verified credits — with positive implications for both price and quality across the market. The final treaty text on supplementarity will determine whether the credit market's growth is driven by regulation or by corporate goodwill alone.
About the author
Dr. Marloes van den Berg
Policy Research Director
Marloes leads policy research on plastic regulation, EPR schemes, and the intersection of plastic credits with emerging compliance frameworks. Former advisor to the Dutch Ministry of Infrastructure and Water Management.