Insight on Plastic Neutrality
To adhere to the evolving plastic compliance policies from CPCB also means to partner with the right organization that can dynamically adapt to the framework of EPR and help you fulfil your EPR targets. Excerpts from distinguished speakers from an event held at MMA recently.
Mathew Jose
CEO, Paperman Foundation of India
Enhanced Producer Responsibility or EPR is fundamentally a compliance rule that is put by the Ministry of Environment and enforced by the Central Pollution Control Board (CPCB) / State Pollution Control Board (SPCB). In India, there was an existing environmental law; however, anything to do with recycling started only in 1998, when an actual document was prepared on what recycling should be and what the modus and protocol in which it should be done.
Over the years, we had multiple additions to the recycling law. In 2016, we took a lot of inputs from the European Union and that is where EPR came into place, through the Plastic Waste Management Rules 2016. What EPR says is that, as a company, if you are in the production of any packaging material using plastic, you have to offset that by retrieving programs. That means you are responsible for the plastic that you send into the market. Many amendments have come over the last six years.
The CPCB and SPCBs across the country and various brands and some of the early movers, producer responsible organizations like ours, have all been working together in the last six years to frame the idea behind this, work out how this should be done and understand the nitty-gritties involved. On a top-level, we are talking about a responsibility mandate that is put on to brands or producers and importers. We refer to this as PIBO (Producers, Importers and Brand Owners). They are obliged to take back the plastic that they put into the markets. In Feb 2022, amendment rules came in, which are currently there in the market.
PIBO
PIBO is the way in which CPCB has defined Producers, Importers and Brand Owners. A producer is not somebody who makes plastic pellets. Plastic products are made from a virgin material manufactured by companies like Reliance. The virgin material is taken and made into packaging material. For instance, a producer can make a blow-moulding bottle or anything that goes into consumer packaging. A producer is someone who makes that particular container or packaging. He is in the packaging space.
An importer is someone who brings the whole product into the market, like buying a product from Thailand, bringing it into India and selling it over here. Or he brings a certain part of the packaging from outside our country to India, as a package and not as a pellet or in the virgin form. A brand owner is anyone who sells the brand or the product in the market. Many times, many companies may be producers, importers and brand owners. PWPF is Plastic Waste Processing Facility. A Plastic Waste Processor is anybody who recycles plastic wastes or engages in the use of plastic wastes for energy.
EPR compliance is about registering yourself with the CPCB or SPCB, based on your eligibility. If you are a producer, importer or brand owner with operations in more than one State, you have to register with CPCB which is in Delhi. If you operate only in one particular State, you have to register with SPCB.
Who has the Liability?
The next stage is offsetting plastic liability in a compliant manner. The third part is filing your annual returns. Every company is required to file an annual return, just like we file an IT return with the help of a CA. Who needs to do EPR? The below flow chart explains this.
Cycle 1: Virgin plastic supplier > Producer > Brand Owner > Market Owner.
In the above Cycle 1, a virgin plastic supplier does not have to do EPR. The ones that are highlighted – the producer and brand owner have to do EPR. A company like IOCL or Reliance sells virgin plastic into the market. Then you have a producer who takes that product and makes a packaging layer out of it. You have a brand owner to whom the producer sells this to.
Cycle 2: Importer > Brand Owner > Market
In the Cycle 2, there is an importer, brand owner and market. In this case, only the importer and brand owner are the ones who have to do EPR. Clearly, there is no duplicity that is needed. That means, if you are a brand and you’re buying the material from a producer, who is doing EPR offsetting, you don’t have to do EPR. That is, if a producer is already doing it on behalf of you, then you don’t have to do it. For example, the producer is doing 100 tons. He sells that to 5 brands. If your brand is registered, then you can offset against what your producer has done in EPR. That’s how it works.
Cycle 3: Importer > Market
In Cycle 3, only the importer has to do EPR.
Category of Plastics
Plastics in the packaging process are divided into three categories (See Figure):
Category 1 is rigid plastics, like pet bottle – water bottle or shampoo bottle. These are rigid plastics made mostly out of HDPE or PET. Category 2 is flexible plastic which can be single layer or multiple layers of plastics alone, like the milk pouch and LDPE covers. Category 3 is multi-layered plastic packaging, like tetra packs. There is another item other than plastic that is involved, like an aluminium film layer or coating. There is a fourth category as well. But let’s restrict our discussions to these three mainstream ones.
What is the Liability?
What is the obligation in offsetting this? How’s that going to work out over a period of time? Offset means that whatever you put directly into the market, you have to take it back. You have to make sure that it is going into some sort of recycling or end-use, which means it can also go into a cement company as a core processing. It can be used in waste to energy. It can be used for oil generation. Currently the market is in the offset stage. In 2021- 22, companies have been asked to do 25% offset. In 2023-24, it should be 70% and in 2024-25, 100% offset. That means for 100% of the material that you’re putting into the market, you are responsible to offset it. That’s where the market is today. (See the table of obligations)
A lot of brands have gone into something beyond compliance and they have become plastic neutral where they are offsetting 100% percent. Dabur and ITC are typical case studies in achieving plastic neutrality.
From 2024-25, recycling is mandatory. You can’t just end use by sending it to a cement company or do conversion of waste to energy alone. A part of it needs to be recycled. From 24-25 onwards, 50% of the category 1 needs to be recycled. You must do 100% offset but 50% of that needs to be recycled. No more end-use where it is going for oil or end life solution is permitted. It has to be recycled into the same form of the same material. That is a technological challenge which is going to come in. 30% of flexible plastics (Category-2) and 30% in Category-3 have to be recycled.
From 2024-25 onwards, all the way till about 2028-29, you have to reach a point where you have to do 80, 60 and 60. That is, if you are in Category-1 (Rigid plastics), you have to do 100% offset, of which, you have to do 80% recycling. If you are in Category-2 (Flexible plastics), you have to do 60% recycling and similarly, if you’re doing Category 3 (multi-layered plastics), you have to do 60 percent recycling.
From 2025-26 onwards, if you put out any bottle that is 0.9 litres and above capacity, those bottles need to be reused. This is an industrial challenge. Think about all the commodities going into the market. The rule says that 10% of that from 2025-26 needs to be reused. It is very tricky how to do this. Companies have set their supply chain in a certain way. If you buy a shampoo bottle, will you go into the shop and ask them to refill the bottle? That is what fundamentally reuse of the packaging refers to. How many times can you do it? A lot of other things also have to come around it. This rule applies for Category-1.
Then there is another category where there must be recycled content in the packaging. One is, you have to create an end use for your plastic. You have to make sure that in the end use, your product is coming back into the same type of product through recycling. You can’t just change the form of the product. Then, there is a third category where you have to reuse. From 2025- 26, you have to ensure that in the main packaging product, you should have recycled content as well like recycled pellets. Or in combination with virgin, you have to use 30% recycled content in your rigid packaging. This will pose challenges for a lot of companies because their entire production and packaging was not built this way. These rules will change the industry dynamics and the industry itself. There are a lot of opportunities here, for people in different sectors, including the job seekers.
Best Practices
Once you meet your obligations, how do you get into best practice as a company? What are the best practices in managing your entire supply chain? You must maintain records of activities that happen in reverse logistics. Most companies are designed in a linear format. They make a product, find some distributors or online platforms and push the product into the market. The compliance rules are no more the ‘good-to-have’ kind. It is no more about leadership or doing good. It’s about compliance and it is a mandate that changes everything. Like if you don’t file your taxes, what happens? There are so many stakeholders around this ecosystem. We have the ULB- Urban Local Bodies. Industrial plastic recycling does not figure here.
Role of Companies like Paperman
Many organisations work with companies like Paperman or other organizations who are in this space. We are in the reverse logistics space. Technically, we are a Waste Management Company since 2010. Generally, production companies are in the business of putting things into the market. We are in the business of taking things from the market and creating value. Producing companies work with companies like us, tap into our capacity of collection of waste and create a traceable record for their plastic neutrality. They have to prove that so many tons of plastics have taken back. That is where the chain of documentation comes in. It is not that if you are a particular brand, you have to take back your own brand’s plastic. It is impossible to go and collect your own bottles back in a 1.5 Bn people market. So, Coke can collect Pepsi’s bottles and Pepsi can collect Coke’s bottles for a change. It is possible. Every transaction has to be acknowledged by the CPCB or SPCB, as the case may be. You have to get an endorsement from the recycler / plastic waste processor. There are multiple checks and balances over here. Also, auditing around this whole industry itself is coming up. Big companies have already put in their auditing practices. This is a great thing for the community as well.
To get started, the companies must register in the CPCB online portal. You can see the companies who have registered there. The entire monitoring process is controlled around the CPCB site. The portal is still in the development process. But as of today, all the PWPs (Plastic Waste Processors) have to be registered in that site. All the brands, producers and importers have to be registered. It’s mandated based on your eligibility. So, if you are operating in one particular state, you register with the SPCBs. If you’re doing in more than one state, you can register through CPCB. Every year, as a brand, you can file your returns through the portal as well.
At Paperman, we have worked with more than one lakh tons of plastic in the last four years through this channel. We work with 86+ ULBs across South India in the states of Kerala, Karnataka, Tamil Nadu, Andhra, Telangana and Andaman & Nicobar Islands.
Sanjeev Goyal
Manager (Centralised Procurement), ITC Ltd
The extended producer responsibility (EPR) came in because the plastic waste was getting accumulated and it was reaching our waterways, rivers and finally oceans. We are told that by 2050, there will be more plastic in the ocean than fish. These were all the challenges the government and the environment was facing. We are also aware of the climate change which is taking place. Covid-19, for example, tried to put fear into us that if we don’t care about the environment, there can be disasters like this. It was an awakening.
ITC’s WOW Moment
Well ahead of time, ITC in 2012, as part of CSR, started an initiative called WOW-Well-being Out of Waste, even when people did not hear about waste management. We knew that one day this problem was going to become immense. Just to give a perspective, 74 lakh tons of hazardous waste is generated in India annually. Single use plastic is a major bane. It was a boon when it came in but now it has become a pain, because people use plastic left, right and centre and it is reaching to the all parts of the environment and causing a lot of issues. Then there has been collection and segregation failure. The municipal solid waste which we generate does not get collected or treated properly. It reaches the landfills and emits a gas called methane, which is 28 times more potent than carbon dioxide as a greenhouse gas. The greenhouse gases do not escape into the outer space and remain in the atmosphere. This results in climate change or increase in the earth’s temperature. That’s how they temperatures all across the globe have been going up. It is the responsibility of all to limit this increase by 1.5 degree centigrade because if the earth’s temperature increases by more than 1.5 degree, many of the countries like Trinidad and Tobago, Maldives or even some portions of Kerala will get submerged. It is therefore imperative on us to minimize, reduce and eliminate the waste.
ITC’s Well-being out of Waste program promotes awareness of the importance of source segregation and recycling. If at our homes (at source) we segregate the dry waste and the wet waste, then we are solving 90% of the problem. Because if the dry waste is separate, it can go to some facility where it can get converted or recycled or used. But almost 90% of our population does not segregate the waste at source.
Awareness and Behavioural Change
First of all, awareness has to be created to segregate waste. Then the ability has to be there. You should be provided separate bins for keeping dry waste, wet waste and hazardous waste. There has to be participation by the people, failing which the bins will remain unused after two or three days.
At ITC, we take the active participation of the urban local bodies (ULB), municipalities and panchayats. We work on the behavioural change of citizens towards source segregation. If it happens, the wet waste can get composted at home or in the community. The dry waste will get collected by the waste pickers. This will not just improve the environment but also reduce the cost of taking the waste to the dumping site and result in enhanced income for the various cleaning people who come around to collect the waste. We provide training to various households, driving the reason for and importance of source segregation at the house level. We distribute bags to the people to keep the dry waste and also the bin for keeping the wet waste. Then we train the waste collection workers who come to collect the waste. If the people give the waste in mixed condition, they should not take it. The dry waste collected will reach a dry waste collection centre where there will be entrepreneurs, who would be segregating the dry waste into various categories like plastic, paper, glass or metal and so on. The plastic waste, which is the real pain will not go to our rivers and oceans and will go to the cement industry or get recycled into some product. At the dry waste collection centres, mostly self-help group and women work. They are trained by ITC to segregate the waste into various categories like Category 1, 2 and 3, so that each category can go to a certain recycler. ITC has established such centres in various cities. Then from the various centres, the plastic gets to a place called a central hub which is nothing but an aggregating point. There the plastic bottles like that of Pepsi and Coca-Cola are baled and are ready for despatch to the recycler.
We have created the infrastructure to facilitate recycling. We have provided the conveyor belts on which people can segregate dry waste into various categories. We have provided baling presses to convert the load into economical load and to send it directly to the recycler. The various collected plastic categories are converted into granules, which people can reuse. The final products made out of these are non-food grade. As these are recycled plastics, they cannot go for direct food application.
Collaboration Opportunities
Partnership is the new leadership. Let’s collaborate:
- for implementation of WOW in your areas
- for digitisation of waste management
- for implementation of exchange programs in specific locations for promoting paper recycling
- for any start-up, for mentoring in this space
- as an operator or franchisee
Tusar Ranjan
Corp Head, EHS-Dabur Ltd
Reduce, Recycle and Reuse are the three methods to reduce the plastics. When we reduce plastics, the environmental pollution will be minimized. But remember, we cannot remove plastic from everywhere. From electronic items to every vehicle we use, there is plastic. To manage the problem, we have to follow the sustainable approach. At Dabur, for the year 2021-22, we declared our company as a Plastic Waste Neutral company.
India is a country with people of different cultures, celebrating different festivals and practising different kinds of rituals throughout the year. We celebrate and enjoy the festivals but what is left behind after the festivities are over are heaps of plastic bottles and plates. Left unchecked, these impact the environment, especially the water bodies and the underground. At Dabur, we make wealth from plastic bottles. We started this journey from 2016. We make T-shirts, carpets and many other things from waste plastics. Thanks to the EPR, in the next one to two years, there will be lots of changes and opportunities and employment. At Dabur, which is a 135 year old Ayurveda company, we team up with different waste management agencies. In 2018, we started the collection of the plastic waste material of 3800 metric ton. Last year, 2021-22, we completed 26,950 MT of plastic waste and were declared as the first FMCG plastic waste neutral company. We are not just working in one state. We cover the entire union territories and 34 states.
In the last four years more, we have collected more than 65,000 MT of plastics and sent to the recyclers and co-processors. We are also doing awareness programs in various cities. In Delhi region, we have started with one of our partners a campaign called, ‘My 10 kg Plastic.’ We have covered more than 250 societies. From the societies, we collect the waste using our partner agencies. The segregated waste go to a recycling centre.
If we implement this program across various states, the awareness and the source segregation issues can be greatly resolved. Some of our campaigns over the last 4 years include health campaigns, Swachh Bharat abhiyan and Marine Drive Plastic Cleaning in Mumbai City. This year, in Madhya Pradesh, we invited more than 250 to 300 children and tied up with an NGO for creating awareness amongst the household. At Dabur, the commitment of our top management is to go beyond the compliance requirements. In 2018, Dabur worked with three waste management agencies. Today we are working with ten. 36,000 rag pickers are associated with our waste management agencies. Our ecosystem comprises waste management agencies, rag pickers, ULBs, co-processors and recyclers. We have mechanisms to ensure transparency and traceability in transactions. We have appointed BDO – a world-class agency – to audit the entire system, including carrying out on-site verifications. They check if the rag pickers are provided with proper PPEs, whether they get proper remuneration and so on.
All these steps help us in reducing the carbon footprint in atmosphere. The future roadmap is about converting the challenges to opportunities, reduction of virgin plastics and focussing on recyclable plastics. A lot of opportunities will be created in the recycling sector and more investment will come to India.