WHY INDIA'S EPR SYSTEM FAILS TO TACKLE PLASTIC WASTE

Why In News?

The Centre for Science and Environment (CSE) analysis reveals a paradox where 17 million tonnes of plastic packaging waste have officially been recycled since 2022 under India's Extended Producer Responsibility (EPR) system, yet visible plastic pollution continues to clog urban drains, landfills, and rural watercourses. 

What Is Extended Producer Responsibility (EPR)?

Extended Producer Responsibility (EPR) is a regulatory policy principle notified, by the Ministry of Environment, Forest and Climate Change (MoEFCC), under the Plastic Waste Management Rules, 2016 (and subsequent 2022 and 2024 Amendments), promulgated under the Environment (Protection) Act, 1986.

Core Principle: EPR operationalizes the "Polluter Pays" principle, transferring physical and financial liability for post-consumer waste management from Urban Local Bodies (ULBs) to producers.

Categorization: Schedule II of the Plastic Waste Management Rules classifies plastic packaging into four distinct technical classes:

• Category I (Rigid Plastics): PET beverage bottles, HDPE containers, rigid jars, and crates.

• Category II (Flexible Packaging): Single or multilayer mono-plastic films, LDPE pouches, carry bags, sachets, and wrapping sheets.

• Category III (Multilayered Packaging - MLP): Multi-material laminates combining plastic with non-plastic materials like paper or aluminum foil.

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• Category IV (Compostable Plastics): Biodegradable sheets and carry bags certified under IS 17088 standards.

Regulated Entities: Producers, Importers, and Brand Owners (PIBOs): The framework mandates registration on the Centralized EPR Portal for four categories of entities:

• Producers: Manufacturers of plastic packaging, sheets, or carry bags.

• Importers: Entities importing plastic packaging, raw plastic resins, or products packed in plastic.

• Brand Owners: Commercial entities selling consumer goods under registered trademarks or brand names wrapped in plastic.

• Plastic Waste Processors (PWPs): Registered recyclers, co-processing cement facilities, waste-to-energy plants, waste-to-oil units, and industrial composting units.

Collection and Recycling Targets: The framework imposes a 100% collection target for packaging waste placed on the market, alongside escalating recycling obligations ranging between 50% and 80% by FY 2026–27, depending on packaging categories.

Digital Certificate Mechanism: PWPs process physical waste and issue digital EPR certificates on the centralized portal, where 1 metric tonne of processed plastic yields 1 EPR certificate. PIBOs purchase these digital credits to fulfill annual statutory returns.

Governance: The Central Pollution Control Board (CPCB) serves as the national apex technical regulator, managing the centralized online portal, processing registrations for multi-state entities, and coordinating with State Pollution Control Boards (SPCBs) and Pollution Control Committees (PCCs) for regional enforcement.

Dual-Layer Registration: PIBOs operating in more than two states/UTs must register with the CPCB, whereas entities operating in one or two states register with the respective SPCB / PCC.

Financial Penalty Structure: The Environmental Compensation (EC) mechanism enforces strict penalties where default fines (e.g., ₹5,000 per tonne) do not wipe out pending obligations; unmet targets carry forward to subsequent compliance cycles.

What Are The Major Findings On Plastic Waste Recycling In India?

Recycled: Data from the Central Pollution Control Board (CPCB) indicates that approximately 17 million tonnes of plastic packaging waste have been recycled since the implementation of mandatory EPR guidelines in 2022, generating a certificate trading market valued at approximately Rs 2,500 crore.

National Packaging Waste Baseline: India generates an estimated 3.8 million tonnes to 4.1 million tonnes of plastic waste annually. (Source: CPCB)

Registered Processor Infrastructure: Over 1,000 Plastic Waste Processors (PWPs) are officially registered on the national portal to issue tradeable recycling credits.

100% Collection Obligation: Regulated entities must collect 100% of post-consumer plastic packaging introduced into the domestic market.

Escalating Target Trajectory: Statutory recycling mandates for FY 2026-27 mandate 80% recycling for Category I, 70% for Category II, 50% for Category III, and 50% for Category IV.  

Challenges: EPR System Failing To Control Plastic Pollution

Fraudulent Credit Generation and Ghost Capacity Inflation

• Systemic lack of physical mass-balance verification allows registered PWPs to issue certificates exceeding their licensed technical processing capacity, flooding the market with unverified paper compliance.

• Example: Centre for Science and Environment (CSE) Audit Disclosures (2023-2024), third-party regulatory audits revealed over 700,000 fake EPR certificates generated across Delhi, Bihar, Andhra Pradesh, Madhya Pradesh, and Tamil Nadu.

Cost Disparities and Perverse Economic Market Incentives

• Official CPCB recycling benchmark costs of ₹4,000 per tonne and credit transaction baselines of ₹1,500 per tonne for flexible plastics sit far below real-world collection, sorting, and mechanical processing expenses of ₹4,000 to ₹6,000 per tonne.

• An 18% Goods and Services Tax (GST) levied on formal recycled plastic pellets disincentivizes physical material trading, prompting recyclers to sell digital credits online while diverting physical plastic into informal, unorganized markets.

• Example: Agra Municipal Drain Waste Audit (2026), field audits conducted in Agra revealed that branded single-use plastic packaging constituted 70% of retrieved drain waste, proving that PIBOs purchase cheap paper credits at ₹1,500 per tonne to clear digital compliance while leaving real-world packaging uncollected in urban waterways. 

Exclusion of Informal Waste Operators and Severe Municipal Financing Deficits

• Despite 1.5 million to 4 million informal waste pickers collecting and processing 70% to 80% of India's post-consumer plastic, the centralized EPR architecture excludes informal aggregators and Urban Local Bodies (ULBs) from direct financial transfer mechanisms.

• Example: CSE Municipal Plastic Management Cost Gap Report (2026), across diverse topographies like Dharamshala (hilly terrain) and Sri Vijaya Puram (remote island territory), municipal waste management costs range between ₹7,200 and ₹12,000 per tonne, whereas realized EPR credit compensation remains under ₹1,200 per tonne—resulting in a cost recovery rate below 10% for remote local bodies. 

 Regulatory Reclassifications and Digital Transparency Breakdown

• The March 2024 Amendment to the EPR Guidelines removed the term "metallized layer" from the definition of Category III Multilayered Packaging (MLP), reclassifying metallized flexible packaging used for chips, biscuits, and sachets into Category II flexible plastic.

• Example: Centralized Portal Access Closure (June 2026), following investigative exposures of fraudulent credits, the CPCB restricted public access to the national EPR portal, converting it into a closed platform accessible only to registered entities and regulators, eliminating academic and civil society scrutiny. 

What Are The Major Government Initiatives And Policy Interventions?

Plastic Waste Management Rules, 2016 (and Amendments): Foundational statutory framework establishing mandatory collection, recycling, packaging categorization, and producer liability.

Extended Producer Responsibility (EPR) Guidelines (2022/2024): Comprehensive operational guidelines establishing digital credit trading, mandatory recycled content thresholds, and category-wise target trajectories.

Nationwide Ban on Identified Single-Use Plastics (SUP): Statutory ban effective July 1, 2022, prohibiting 19 low-utility, high-littering single-use plastic items including cutlery, straws, and thin carry bags under 120 microns.

Swachh Bharat Mission – Urban 2.0 (SBM-U 2.0): National flagship mission managed by the Ministry of Housing and Urban Affairs (MoHUA) targeting 100% scientific solid waste processing, legacy landfill remediation, and establishment of Material Recovery Facilities (MRFs).

National Action Plan for Plastic Waste Management: Strategic roadmap formulated by MoEFCC and CPCB to promote eco-design, alternative sustainable packaging, and industrial circular economy hubs.

CPCB Digital Monitoring & Enforcement Mechanisms: Deployment of automated portal algorithms, third-party technical audits via IITs and CSIR institutes, and standardized Environmental Compensation formulas.

Way Forward

Implement Physical Mass-Balance Auditing: Replace paper-based credit trading with digital mass-balance tracking that links every EPR certificate directly to verified physical waste inputs, factory electricity consumption, and output pellet sales to eliminate ghost recycling capacity.

Restore CPCB Portal Transparency: Re-open public access to the Centralized CPCB EPR Portal to publish entity-level targets, verified recycler capacities, and third-party audit findings for civil society and academic oversight.

Re-align Financial Incentives & GST: Restructure Environmental Compensation (EC) default penalties under Section 15 of the Environment (Protection) Act, 1986 so fines exceed real recycling costs (₹4,000–6,000 per tonne). Waive or reduce the 18% GST on formal recycled plastic pellets to prevent diversion into unorganized markets.

Integrate Municipalities & Informal Waste Pickers: Amend EPR Rules to establish direct financial transfers from the EPR credit pool to Urban Local Bodies (ULBs) and informal waste-picker cooperatives who collect 70%–80% of India's plastic waste.

Reverse Multilayer Packaging Reclassification: Restore metallized flexible packaging (e.g., sachet wrappers) back to Category III (Multilayered Packaging - MLP) to force brand owners to redesign packaging and fund hard-to-recycle material streams.

Prioritize Local State-Level Offtake: Mandate multi-state PIBOs to prioritize procuring EPR certificates from local state-based Plastic Waste Processors (PWPs) before transferring credits across state borders.

Conclusion

India's Extended Producer Responsibility (EPR) framework offers a strong foundation for circular material flows, but achieving real environmental outcomes requires shifting from paper-based certificate trading to physical mass-balance verification, municipal integration, and absolute portal transparency.

Source: DOWNTOEARTH