Is EPR too harsh on Producers Importers & Brand Owners

Examining a stakeholder opinion based on current economics and future growth of EPR.

Extended Producer Responsibility(EPR)under Plastic Waste Management Rules, 2016 mandates Producer Importers and Brand Owners (PIBOs) to collect, transport and scientifically dispose of all the plastic that they introduce in the market. The mandate is perceived as a harsh measure by many of the PIBOs. There are a couple of reasons why EPR is perceived as harsh on the PIBOs:

  • EPR result in an increase in expenses affecting the bottom line
  • The product will become uncompetitive
  • EPR increases the legal compliance

It is true that fulfilling EPR require money to be spent on creating logistics, sourcing, storage and disposal mechanisms. In case companies outsource the EPR compliance, the third-party agency must invest in creating these mechanisms.

 

But, how much does EPR really costs?

 

At present, the EPR compliance cost per kilograms is anywhere between INR 6 to INR 8 for non-recyclable plastic and INR 2 to INR 4 for recyclable plastic. When we translate this cost per packaging basis in the context of FMCG companies the cost ranges between INR 0.04 (4 paise) to INR 0.1 (10 paise), a very minuscule percentage of the final product cost. The industry has been mandated EPR because they are the ones who can effectively ensure plastic collection and disposal. The cost of managing EPR will ultimately be passed on to the consumer through increased cost of the product.

The apprehension of PIBOs that increase in cost resulting from EPR might make their business uncompetitive is also unfounded.  Once EPR compliance reaches more than 80%, CPCB and most of the SPCBs have already notified PIBOs, the increase in cost will be negated as every PIBO will be fulfilling EPR.

We have not been able to manage post-use Plastic properly and that has resulted in environmental damage. EPR ensures the proper management of plastic and hence reduces the environmental hazard.

Proper management requires creating necessary process, checks and balances to reward those who comply with the rules and act against those who don’t. The documentation and reporting mechanism proposed by CPCB is on these lines.

So instead of looking EPR compliance as an additional burden, we should look at it as a process to ensure everybody fulfilling EPR mandate and embrace it as a standard business practice.