Mass Balance Accounting

Plastic recycling greenwashing through mass balance accounting

Imagine you’re filling up 100 bags of coffee. You’re using beans from a few different providers — 10 percent of the beans they sent you are decaffeinated and the rest are caffeinated. However, you mixed them all together, so each bag is an even blend of 10 percent decaf, 90 percent caffeinated coffee beans.

It’s a shame, though, because in this hypothetical, decaffeinated coffee is in high demand. People will pay a premium for bags of 100 percent decaf coffee. So instead of labeling each bag as a 10/90 blend of decaf/caffeinated coffee, you decide to label 90 bags as regular, fully caffeinated coffee beans, and the remaining 10 as “100 percent decaf.” You can now charge much more for those “decaf” bags.

It’s a misleading strategy, at best, and one that could cause rioting among coffee drinkers. But it’s not just a thought experiment. Plastic companies are using an even more convoluted version of this accounting technique in order to make it seem that their products have more recycled content than they really do.

Mondelez, the owner of snack food brands like Chips Ahoy, Clif, Oreo, and Ritz, announced last September it would use this system, known as “mass balance,” for its North American Triscuit packaging. According to a press release, up to 50 percent of the plastic in the cracker boxes’ inner bags would be “sourced from advanced recycling technology” and provided by two of the companies in Mondelez’s supply chain, the plastics maker Berry and the chemical company LyondellBasell. 

Mondelez hasn’t labeled its Triscuit packaging with these recycled content claims. But the company said the plan would contribute to its overall goal of achieving 5 percent recycled plastic content by the end of 2025, and that it would ease consumer guilt. “Triscuit fans can snack easier knowing that the brand is playing a role in helping reduce plastic waste,” Mondelez said.

Independent and government watchdogs, however, aren’t as keen on mass balance. Last year, two dozen environmental organizations sent a letter to the Federal Trade Commission arguing that it was “not based on scientific facts or operational engineering evidence.” They drew an analogy similar to the decaf coffee one outlined above. The California attorney general’s office recently called mass balance a “false and misleading marketing scheme,” and the accounting system was rejected last August by the Biden administration’s Environmental Protection Agency, which had considered whether to allow it to be used in products labeled with its “Safer Choice” logo. Now, mass balance has made Mondelez the target of a shareholder resolution demanding that the company substantiate its recycled content claims. 

“This is just a bogus scheme,” said Jan Dell, a chemical engineer and founder of the nonprofit The Last Beach Cleanup, who owns Mondelez stock and filed the resolution. “As a shareholder, I’m very upset that they’re spending corporate funds on this — just return that money to me as a dividend. Don’t waste it on a PR stunt that’s actually going to cause you legal liability.”