Blockchain-based tokenization and its impact on plastic bottle supply chains

Abstract

Over the past few decades, industrial plastic production has been experiencing exceptional growth. The durability, lightness, stability, and low cost of conventional plastic materials are clear benefits that explain their popularity and application variety. However, these advantages are offset by complex after-use processes in which post-consumer plastic waste is either recycled, used for energy recovery, or dumped in landfills, where it breaks down into harmful microplastics. In practice, existing approaches to incentivize end-consumers for the proper collection of plastic bottle waste pose certain barriers and weaknesses. In this study, we propose blockchain-based tokenization as an alternative incentive system and investigate its impact on plastic bottle supply chains (SC). Together with industry partners, including Coca-Cola HBC, we first developed a process model of a circular plastic bottle SC based on blockchain tokenization and then implemented it in an empirical pilot study. Here, we tested different token-based incentives (i.e., donations, lottery tickets, and gamification) for their attractiveness among end-consumers to enhance collection efforts of plastic bottles. We then developed a system dynamics model where we used empirical data from the pilot study to analyze the impact of incentivization via blockchain-based tokenization on a circular plastic bottle SC. The insights from the pilot study demonstrate the practical and technical feasibility of such a novel incentivization approach when implemented in a real-world setting. It was also found that token-based incentives for social purposes are most suitable for stimulating end-consumers for proper plastic bottle recycling. Furthermore, the results show the positive effects of the proposed system in terms of reduced virgin material delivery and higher collection fractions of plastic bottles.