Recycling Supply Chain
The end-to-end flow of materials through the Carrot Network — from waste generation through collection, processing, and credit generation.
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Overview
The chain of custody runs top to bottom through the parties that hold the material: a Waste Generator that sorts at source, a Bin Custodian when a drop-off point is used, a Hauler that transports it, a Processor that weighs and sorts it, and a Recycler that performs certified recycling. Each transfer is labelled with the event that records it — drop-off and pick-up, with a long haul recorded as a drop-off covered by a single Transport Manifest — and the party receiving the material acts as Validator, confirming the content before the transfer is accepted. Beside the chain, the MassID records what each handoff produces: material and weight confirmed by the receiver, the party, time and place of every handoff, and the resulting Proof-of-Physical-Work that credits rest on. Two roles sit outside custody: the Waste Manager directs the destination without handling material, and the Network Integrator submits the events. One company can hold more than one role and is rewarded for each.
Material changes hands; the receiver validates each transfer and the MassID records it.
The recycling supply chain is the physical path that materials take from waste generation through collection, sorting, hauling, and processing at accredited recycling or biological treatment facilities. Understanding this flow is essential to understanding how the Carrot Network creates value — every step is digitized, verified, and rewarded.
The critical principle: high-performance recycling starts at the source. Sorting and cleaning mixed waste after contamination is too expensive and technically complex for most locations. The Carrot Network's incentive system is designed to reach the Waste Generator, because source sorting is the single most impactful action for recycling performance.
Participants
Seven role categories define who does what in the recycling supply chain. Five take physical custody of material; the Waste Manager coordinates destination without custody, and the Network Integrator provides the data bridge:
| Role | Responsibility | Reward eligibility |
|---|---|---|
| Waste Generator | Produces waste and performs source sorting | Yes — a fixed share per waste type for the sorted material, reduced for large businesses and for incomplete onboarding |
| Waste Manager | Coordinates destination without taking physical custody | Yes — 4% for organics when its relationship with the generator is confirmed |
| Bin Custodian | Manages collection bins and drop-off points | Yes — rewarded for bin infrastructure |
| Hauler | Transports waste between locations | Yes — rewarded for logistics work |
| Processor | Sorts, accumulates, and pre-processes materials | Yes — rewarded for processing work |
| Recycler | Performs certified recycling or biological treatment | Yes — rewarded for recycling; also rewarded as Processor when it records the sorting events |
| Network Integrator | Provides the logistics software that digitizes the supply chain | Yes — rewarded as the software provider |
Participants frequently fill multiple roles. A hauler with its own sorting facility is both a Hauler and a Processor. A waste generator who delivers waste directly to a processor is also a Hauler. A recycler that also receives and sorts the material is recorded under both roles — Processor and Recycler — and is rewarded for each. A Waste Manager that also transports material is both a Waste Manager and a Hauler and can be rewarded for each role it performs.
Beyond supply chain participants, the Carrot Network also distributes rewards to ecosystem participants who enable methodology execution and credit generation: the MvF Author, MvA Developer, and the network's own operations (covering digital MRV (dMRV) infrastructure, network oversight, and data processing). See the full Rewards Distribution for all participant categories.
Waste Manager
The Waste Manager is contracted by the Waste Generator to select and contract service providers, direct material to specific facilities, and report on regulatory compliance. It does not transport, sort, or treat material. Its contribution is the destination decision: it can direct the same material to disposal or to certified recycling.
Onboarding as a Waste Manager does not by itself create reward eligibility. The Waste Manager must declare the generators it serves, and each Waste Generator must confirm that relationship. Both sides must complete onboarding before the Waste Manager is recognized for that generator's assets. A one-sided declaration has no effect on rewards.
For organic waste, a confirmed Waste Manager is eligible for a 4% share. If none is confirmed, the allocation remains with the Hauler, Processor, and Recycler categories; if more than one is confirmed, they divide the category share. See the Rewards Distribution Policy for the exact allocation and discount rules.
Material flow
Materials move through the supply chain via two logistics models:
Materials move through the supply chain in two logistics models, shown one above the other. In local hauling, a Waste Generator hands material to a Hauler at a pick-up, and the Hauler hands it to a Processor at a drop-off; both the Hauler and the Processor act as Validator, confirming the material they receive. In long hauling, a Processor hands material to a Hauler at a pick-up, and the Hauler delivers it to another Processor or to a Recycler at a drop-off, but a single Transport Manifest covers both events, so only the receiving facility validates. A note inside the long-hauling model explains the manifest, and a note below both models states the rule they share: the party receiving the material confirms its content at every transfer, and the MassID records the handoff.
Local and long hauling. In local hauling, the receiver validates each transfer; in long hauling, a single Transport Manifest covers both events, so only the receiving facility validates.
Local hauling
Haulers execute multiple pick-up events along a door-to-door route, collecting waste from generators and delivering it to a local processor. The processor validates the contents at drop-off, creating or updating MassIDs for each material type and weight.
Long hauling
Material is shipped from one processor to another, or from a processor to a recycler. The transfer is recorded as a Pick-up and a Drop-off covered by a single Transport Manifest, with the waste validated only by the receiving facility. Long-haul shipments typically carry larger volumes of pre-sorted material.
At each transfer point, the receiver acts as a Validator, confirming material content and updating the MassID chain of custody. This validation at every handoff is what creates the Proof-of-Physical-Work — verifiable evidence that real-world recycling work was performed — that underpins credit generation.
Reaching the source
The Carrot Network's rewards distribution is specifically designed to reach the waste generator — the source of waste creation. This is critical because:
- Waste generators need incentives to sort — Without feedback on sorting quality and financial rewards for participation, there is no reason for individuals and businesses to sort diligently.
- Source data enables Pay-As-You-Throw — When waste is weighed and tracked from the point of generation, each generator pays precisely for the waste they produce, creating direct incentives for waste reduction.
- Sorting at source transforms recycling economics — Removing organic waste contamination from recyclable streams can improve recovery rates by 2-4x at downstream sorting facilities.
Certified recycling rewards, distributed via the MassID chain of custody, provide the economic incentive for generators to sort properly and stay engaged with the system.
The role of the Recycler
The Recycler occupies a special position in the supply chain. A Recycler is a processor that has been accredited by third-party auditors to perform certified recycling for a specific waste material type.
- A glass bottling plant using cullet in its furnaces is a certified glass Recycler — it cannot recycle plastic.
- A biological treatment facility transforming food waste into compost is a certified food waste Recycler — it cannot recycle electronics.
Only when MassIDs reach an accredited Recycler and pass the dMRV validation process do they become eligible for issuance as Tokenized Recycling Credits (TRC) and Tokenized Carbon Credits (TCC).
How the supply chain creates value
The recycling supply chain creates value by connecting waste generators who need disposal services with credit buyers who need environmental offsets — and rewarding every verified contributor in between:
- Waste Generators gain visibility into their waste footprint, earn rewards for sorting, and can demonstrate compliance with waste regulations.
- Waste Managers earn a share for directing organic waste to certified recycling when their relationship with the generator is confirmed.
- Bin Custodians open the door for private companies and public-private partnerships to sponsor bin networks, earning rewards from credit purchases.
- Haulers earn new revenue streams from dedicated routes for specific waste types, supplementing traditional hauling income.
- Processors and Recyclers receive additional proceeds from credit purchases on top of existing material sales, improving the economics of recycling as a professional service.
- Network Integrators earn a share of rewards for providing the logistics software that digitizes the supply chain.
This distributed reward system opens the recycling market to innovation and entrepreneurial activity, ensuring all stakeholders are rewarded for their verified environmental contribution.