SMX (Security Matters) PLC announced the planned launch of a plastic cycle token, scheduled for release in second quarter 2024. Amidst a global context where only an estimated 9% of plastic is recycled1 (OECD, 2022) in a market valued at over $40 billion2 (Statista, 2021), this initiative is being designed to present a reliable, ethical digital credit platform, aiming to capitalize on billions of dollars in recyclable plastics credits in a newly created market. The contemplated collaboration is expected to amalgamate a diverse array of partners and sponsors, each contributing distinct skills and expertise to create the Plastic Cycle Token.

Consortium members are being identified and would be selected to provide deep domain knowledge and technology to ensure best practices and technical proficiency. This tradeable plastic cycle token is being designed to enable companies to transition towards sustainable practices, encouraging entities within and outside the plastic ecosystem, including oil producers and waste management firms, to increase recycled content utilization. This initiative is also expected to position the SMX Plastic Cycle Token as a next-generation alternative to carbon credits, creating a new paradigm in the Impact ESG investment landscape.

Each token is being designed to represent a quantifiable amount of recycled plastic using SMX's technology to physically mark the plastics, potentially offering a tangible impact on environmental circularity. SMX believes that the goals of its Plastic Cycle Token project aligns with the European Union's ongoing efforts to address the limitations of the current carbon credit system3 (CarbonBrief 2023), including the adoption of a strict mass balance definition4 (CEFIC, 2023). The proposed EU Packaging and Packaging Waste Regulation5 (European Commission 2023) aims for at least 50% of all EU plastic waste to be recycled by 2025.

Mass balance, a chain of custody model under ISO standard 22095, is already utilized in sectors like biofuels and fair-trade commodities. However, SMX believes that this is still not sufficient. Some major corporations have formally advocated a strict mass balance measurement with chemical and physical traceability6 (Perstorp 2023).

SMX's technology enables physical traceability, supporting this Plastic Cycle Token model, and SMX believes will incentivize genuine plastic recycling. SMX's technology can precisely tangibly identify the origins and composition of raw materials in consumer products and packaging, promoting efficient recycling and reuse. It comprises a chemical marker, reader technology, and blockchain data storage, facilitating a global system for grading and certifying plastic recycled content.