Municipalities Funding Corporate Plastic Waste
India’s extended producer responsibility (EPR) policy is forcing urban local bodies and municipal taxpayers to foot the bill for corporate plastic packaging waste while producers, importers, and brand owners (PIBOs) discharge their obligations at rock-bottom prices. It is failing its central premise. According to a new study by the Centre for Science and Environment (CSE) titled Policy, Practice and Plastic: Cost of Managing Plastic Waste in Indian Cities, there is a mismatch between the actual cost of collecting, transporting, and processing plastic waste and the financial support recovered through market-linked EPR credits. The report reveals that while Central Pollution Control Board (CPCB) rules permit EPR certificates to trade between 30 and 100 percent of applicable environmental compensation, market dynamics have collapsed toward the lowest price floor. Case studies: The financial disconnect is severe in difficult terrains and remote geographies. In Dharamshala, Himachal Pradesh, managing Category III multi-layered plastic (MLP) packaging costs up to ₹9.15 per kg due to high logistical constraints. However, prevailing market-linked EPR credit rates sit at ₹1.00 to ₹1.25 per kg—yielding a cost recovery rate of just 13 to 14 percent. In Sri Vijaya Puram (Port Blair), managing Category III plastics demands between ₹9.87 and ₹11.83 per kg, exceeding the floor prices paid by PIBOs. Even in infrastructure-ready cities like Indore, handling Category III plastics requires ₹2.35 to ₹3.67 per kg. Recent regulatory actions underscore these structural flaws. CPCB recently sunset its standalone plastic waste platform and migrated all stakeholders to the unified Common EPR (CEPR) Portal. The shift mandates single sign-on verification across plastic, e-waste, and batteries to eliminate data mismatches, double-counting, and phantom recycling credits. CPCB has also initiated data verification windows to audit registered PIBOs and plastic waste processors (PWPs), while issuing multi-crore environmental compensation notices to defaulting brand owners. Official perspectives: Atin Biswas, Director, Municipal Solid Waste and Circular Economy, CSE, said, “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. 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.” Siddharth G Singh, Program Manager, Municipal Solid Waste and Circular Economy, CSE, said, “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 waste management possible receive almost nothing. Furthermore, the market has tended to gravitate towards the lower end of the trading price range, creating a persistent gap between certificate prices and the actual cost of managing plastic waste.” Dr. Tribhuwan Singh Bisht, Deputy Program Manager, CSE (Lead Researcher), said, “The actual cost of managing plastic waste varies significantly across cities and plastic categories. 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.” Sunita Narain, Director General, CSE, said, “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 path forward: To resolve this hidden municipal subsidy, CSE advocates for cost-based benchmarking and a weighted adjustment factor (WAF). This mechanism would mandate higher EPR credit prices in high-cost, remote, and ecologically fragile regions. CSE also recommends establishing localized EPR purchase obligations, requiring brand owners to purchase a defined share of certificates directly from the specific regions where their plastic products are sold and consumed.
