A new study by the Centre for Science and Environment (CSE) has highlighted a significant gap between the actual cost of managing plastic packaging waste in India and the financial support available under the Extended Producer Responsibility (EPR) framework.
The study, Policy, Practice and Plastic: Cost of Managing Plastic Waste in Indian Cities, points out that the prevailing market-linked EPR credit rates are often insufficient to recover the costs involved in collection, transportation, segregation, processing and disposal of plastic packaging waste. The shortfall is particularly pronounced in the case of flexible and multi-layered plastics and in cities with higher logistical and infrastructure costs.
India generates around 158,619 tonnes of municipal solid waste every day, with plastic estimated to account for 10-12 per cent of the total, translating to nearly 19,000 tonnes of plastic waste daily. A substantial portion comprises plastic packaging, which has a short use cycle and quickly enters the waste stream, placing additional pressure on municipal waste management systems.
According to CSE, the inadequate recovery of waste management costs under EPR can leave urban local bodies to bear a financial burden that the framework was intended to shift towards producers, importers and brand owners (PIBOs) under the polluter-pays principle.
“the study finds that inadequate cost recovery can leave municipalities to shoulder a financial burden that EPR was intended to place on producers, importers and brand owners (PIBO) under the polluter-pays principle,” says Atin Biswas, director, municipal solid waste and circular economy programme, CSE.
The study also identifies a mismatch between India’s recycling targets and the available capacity to manage difficult-to-recycle plastic packaging. Under the Plastic Waste Management Rules, PIBOs are required to meet recycling targets of 50-70 per cent by 2026-27. However, capacity constraints remain, particularly for flexible and multi-layered plastics. Nearly 66 per cent of registered plastic packaging falls under the flexible plastic category, which is among the most difficult to collect, segregate and recycle.
“The current EPR framework in India disproportionately directs financial value towards plastic waste processors and end-of-life facilities, while the collection and segregation systems that make plastic recovery possible remain inadequately financed. Waste collectors, informal waste workers, urban local bodies and material recovery facilities continue to perform critical functions without adequate access to EPR financing,” says Siddharth G Singh, programme manager, municipal solid waste and circular economy programme, CSE.
Regional cost variations:
The CSE study notes that the current EPR certificate pricing mechanism does not adequately reflect the wide variation in the cost of plastic waste management across different locations.
The methodology adopted by the Central Pollution Control Board provides a price range for EPR certificates linked to environmental compensation, allowing certificates to be traded between 30 and 100 per cent of the applicable environmental compensation. However, according to CSE, market prices have generally remained towards the lower end of this range.
“The market has tended to gravitate towards the lower end of this range, creating a persistent gap between certificate prices and the actual cost of managing plastic waste”.
The study found that the disparity becomes more pronounced in cities where terrain, transportation distances, infrastructure limitations and waste management systems increase operational costs.
“The actual cost of managing plastic waste varies significantly across cities and plastic categories.”
For instance, the cost of managing Category III plastics, comprising multi-layered plastic packaging, ranges from Rs 2.35-3.67 per kg in Indore, Madhya Pradesh, to Rs 9.87-11.83 per kg in Sri Vijaya Puram, Andaman and Nicobar Islands.
In Dharamshala, Himachal Pradesh, the cost of managing Category III plastics is estimated to reach Rs 9.15 per kg, while prevailing market-linked EPR credit rates are around Rs 1-1.25 per kg. This translates into cost recovery of only 13-14 per cent.
“This variation reflects differences in geography, infrastructure, logistics and local waste management systems. Even in cities with more developed waste management systems, current market rates do not necessarily cover the full cost of managing flexible and multi-layered plastics.”
CSE said the findings expose a central contradiction in the existing EPR system, where the financial responsibility is intended to rest with producers, while municipalities continue to bear a significant share of the actual management costs.
“There exists a central contradiction in the current EPR system: the financial responsibility for plastic waste is intended to rest with the producer under the polluter-pays principle, but the actual cost of managing the waste can continue to fall on municipalities. This is what we need to correct.”
CSE proposes geographically differentiated EPR rates:
To address the gap, CSE has proposed a Weighted Adjustment Factor (WAF) to adjust base EPR credit rates according to geographic and operational conditions. Under the proposed mechanism, regions facing higher costs because of terrain, infrastructure deficits or logistical challenges would receive appropriately adjusted EPR rates.
The study has also proposed a localised EPR obligation, under which PIBOs would be required to purchase a defined share of EPR certificates from regions where their products are consumed. CSE said this would help channel EPR funding to areas where plastic waste is actually generated and where waste management costs may be higher.
The organisation has further called for stronger economic incentives for producers to adopt recyclable and more sustainable packaging designs. According to the study, unless the higher cost of managing difficult-to-recycle plastics is adequately reflected in EPR fees, producers would have limited financial incentives to redesign packaging.
At the release of the study, CSE director general Sunita Narain highlighted the role of informal workers in India’s plastic waste management system.
“India’s plastic waste management system relies heavily on the labour of poor and informal workers who collect, segregate and aggregate valuable recyclable materials. Unless these workers are incorporated into the EPR framework and receive financial support from it, the system will continue to leave a critical part of the value chain outside the financing architecture”.
The study concludes that the success of EPR should not be measured merely by the purchase of certificates or achievement of numerical compliance targets. Instead, its effectiveness should be assessed by whether plastic waste is actually collected, segregated, processed and recycled, whether workers across the value chain receive fair compensation, and whether the financial responsibility ultimately remains with those who place plastic products on the market.
(Inputs from CSE)
