Plastic regime needs transparency

India has recycled 17 million tonnes of plastic packaging waste since 2022, when the “Extended Producer Responsibility” (“EPR”) regime came into force, shows the latest Central Pollution Control Board (CPCB) data. The estimated value of this plastic-recycling trade comes to a whopping ₹2,500 crore — enough to fund four Chandrayaan-3 missions. Considering that India annually produces 3.8 million tonnes of plastic waste, going by CPCB estimates, we have been successful in getting rid of at least four-five years of plastic waste generated. If this is the case, and it clearly is, based on official documents of June 2026, then why do we still see mountains of plastic waste in our cities, villages and riverways? 

Clearly, something is not quite right.EPR is an instrument used universally to manage waste. It puts the onus of collecting and recycling plastic on its manufacturers — producers, importers or brand owners (PIBOs). From 2023-24, in India, PIBOs are mandated to collect 100 per cent of the plastic waste they generate. As of last year, PIBOs had the target to recycle 40-60 per cent of this collected packaging material. For 2026-27, the target is up to 50-70 per cent, depending on the category of plastic. For instance, PIBOs of category 2 plastic, which includes everything from single to multilayered packaging, used for wrapping items ranging from chips to shampoo sachets, are mandated to collect 100 per cent of their plastic packaging and recycle 50 per cent of it, as of this year. 

For recycling, PIBOs contract with plastic waste processors (PWPs), units required to be registered with the CPCB. There are over 1,000 registered PWPs, according to the official data. These units are paid in accordance with CPCB-mandated rates — ₹870 per tonne for category 1 (pet bottles and the like); ₹1,500 per tonne for flexible plastic (packaged food and other household items); and ₹2,500 per tonne for compostable material. Each tonne of plastic recycled is equal to one EPR certificate. Taking an average rate of ₹1,500 per tonne, the value of 17 million tonnes of plastic waste recycled by India since 2022 comes to ₹2,500 crore. 

If PIBOs do not meet their targets for recycling, they are charged a hefty environmental compensation. This cost of non-compliance is 2.5 times the cost of compliance. The CPCB estimates that the cost of plastic waste recycling is ₹4,000 per tonne, which it then distributes equally between municipalities and producer companies, averaging ₹2,000 per tonne. If PIBOs fail, they are slapped with an environmental compensation of ₹5,000 per tonne for category 2 plastic, for instance.

This sounds great. In fact, it sounds so great that the government is said to be considering taking this system to the stock market to allow trading of EPR certificates. 

But then, I ask again, if this system is working so well, why do we see so much plastic everywhere? My colleagues audited plastic in the drains of Agra city and found that branded plastic packaging made up 70 per cent of the waste. Then how can companies claim 100 per cent collection? You will find the same if you look at any garbage dump in your vicinity. Let’s look at what can go wrong. 

First, does the PIBO target underestimate the waste generated? In 2024, my colleagues analysed the official EPR portal and found that 41,544 PIBOs had registered and were assigned recycling targets based on self-reported data. How this quantity was validated is not clear. 

Second, how does the CPCB verify the volume of waste processed and recycled? The CPCB says it does this through audits and ground-checks. On June 26, the CPCB directed different states to take action against non-compliant PWPs. The audit (not available publicly) seems to suggest that many PWPs were generating certificates more than their registered capacity and other violations. The problem is compounded because it is difficult to trust or verify in this business. The CPCB says PWPs must upload GST (goods and services tax) invoice as proof of sale of the finished recycled product. The product, in most cases, is plastic pellets, which are then used mostly by industries in the informal sector. Worse, the high rate of GST, at 18 per cent, makes “open” business unviable. 

The third issue is even more fundamental. If it costs PIBOs 2.5 times more to pay for non-compliance, they should want to pay for recycling at PWPs. But this cost also creates a perverse incentive to “arrange” for certificates and not for recycling. It is also because in many cases, recycling is not feasible at the agreed rate. Our research finds that the real cost of recycling the same category 2 plastic would be ₹4,000 to ₹6,000 per tonne — much higher than the set rate of ₹1,500 per tonne.

That said, we need more ways to improve the learning for scrutiny and compliance. But the opposite is happening. As on June 28, 2026, the EPR portal is available only to a closed group of users. It can be argued that this has been done because EPR is a lucrative business and private information must be kept confidential. But this lack of transparency will only make things worse. This is not governance for tomorrow, not even of yesterday.

 

The writer is at the Centre for Science and Environment; sunita@cseindia.org, X: @sunitanar