Materials consumption is increasing globally, with the resulting waste from plastic set to double by 2040 at our current rate.

At the same time, public awareness of the problem of material use has never been higher, with 91% of consumers stating they are concerned about plastic waste. Many brands have made ambitious commitments to increase their usage of recycled materials. And 175 countries are now working towards establishing a legally binding agreement by the end of 2024 to end plastic pollution.

One major gap in the move towards a circular economy is the lack of transparency on where recycled material is coming from. The supply chain in the waste management sector has long been opaque: once material has been discarded, there is little visibility into where it ends up including how it makes its way back into the recycling supply chain, particularly in Global South countries. Brands are, however, demanding transparency in order to ensure they are sourcing genuinely recycled materials and that there are no human rights abuses in the system, such as plastic coming from child labor on an open dump.

What’s the solution?

Enter material traceability. Delterra is convening key players across the value chain to pioneer a method of digitally tracing materials throughout the recycling chain. Our solution creates a product passport for recycled materials, using 2D codes such as bar codes and QR codes powered by blockchain technology. Together with GS1, the global supply chain standard setter, and Empower, a leading blockchain-based material traceability tool provider, Delterra’s solution records data at each stage in the value chain to create a secure registry that adheres to the highest standards and can be scaled globally. In concert with other interventions, traceability could be transformative in ensuring transparent, verifiable recycled content claims, a vital step toward a genuine circular economy.

The potential benefits for ecosystem players are extensive, from increased transparency and quality control to financial opportunity and ethical assurance. For instance, traceability will allow FMCG brands to make concrete recycling market claims while significantly reducing their reputational risk, streamlining the administrative burden associated with Extended Producer Responsibility commitments. It will also enable recyclers to provide feedback on source separation to upstream players, analyze their own data to identify operational improvements, and ultimately identify new markets based on material flows. With the right complementary measures, material traceability can shine a light on irregularities in informal employment, motivating players to invest further in creating ethical supply chains and giving them transparency as to their investments.

What sets this solution apart?

Delterra’s comprehensive approach covers the entire value chain and employs a tool-agnostic methodology, avoiding the proliferation of incompatible proprietary approaches. At the moment, definitions of recycled material vary widely, raising the risk of inflated claims. The key to effective material traceability at scale is interoperability—a system that multiple tools can share and that works in a range of locations, incorporating a common baseline and continuous monitoring. Delterra’s solution does exactly that: our processes are tool-agnostic and therefore flexible and neutral, since we don’t have a financial interest in any one tool.

Our traceability offering is also differentiated by our expansive network across the Argentine waste system, paired with our international footprint. In Argentina, we have built a unique private-public alliance of partners which includes policymakers, brands and technical players. Our global footprint, spanning programs in Argentina, Brazil and Indonesia as well as ambitions to expand further afield, will be used to scale our traceability projects. Given the high levels of informal employment in the Argentine waste system, in the longer run this will give us an opportunity to combine our traceability tool with other measures in order to gauge whether ethical working conditions exist across the value chain.

Our momentum is building. In the past year, we have traced 500 tons of low-value post-consumer plastic waste in the city of Buenos Aires from point of sortation to recycling. By the end of the year we expect to be tracing 2000 tons per month of materials across 25 sorting centers in the city. We are also expanding to other materials (PET, HDPE, glass) as well as scaling our technology nationwide.

Scaling material traceability

“Delterra’s target is ambitious: trace over 50% of Argentina’s post-consumer recycled plastic waste by the end of 2024, with the potential to scale internationally in the long term.”

We have now reached a critical juncture in the development of material traceability tools. The digital solutions needed for traceability are ready for deployment, and pressure from investors and the public is mounting. In extreme cases, companies may even face the risk of litigation if they are unable to fulfill their commitments with verifiably recycled, ethically sourced materials. Long-term demand for recyclable materials relies on brands having confidence their use doesn’t expose them to reputational crises. Material traceability can hence unlock more demand for recyclable materials by providing transparency on the source of materials and the conditions in which they were collected and processed.

To enable traceability at scale, we will need better coordination on standards and methodologies for traceability, in order to build credibility as well as market scale. The journey toward an inclusive circular economy and an effective global plastics agreement requires collective effort to ensure transparency in the supply chain.