The Extended Producer Responsibility (EPR) system, introduced by the Central Pollution Control Board (CPCB), was designed to ensure producers, importers, and brand owners (PIBOs) manage the plastic waste generated by their products. In FY 22-23, the CPCB introduced a crucial feature at the time of Annual Returns—allowing entities to shift their EPR targets to registered counterparties. This helped alleviate the burden for many producers who faced inflated targets due to delays in registrations and unavailability of the EPR portal for some entities.
Why Was This Feature Crucial?
In the early stages of the EPR system, many applications for registration were pending with the CPCB or state PCBs, while some entities did not apply for EPR compliance altogether. As a result, many producers found themselves facing disproportionately large EPR targets upon registering, despite their actual consumption.
However, the CPCB’s feature to shift targets to newly registered entities allowed producers to correct this imbalance. By shifting part of their liability to the registered counterparties, producers were able to reduce their targets, making their compliance obligations more realistic and achievable.
Unfortunately, this feature was only available for FY 22-23, leaving producers facing similar challenges in the following years.
The Current Scenario: Unresolved Challenges
The issue of inflated targets persists even today. Many entities have only recently registered, while others remain unregistered. Numerous applications for EPR registration are still pending approval with PCBs. This delay results in registered producers being assigned massive EPR targets that should ideally be shifted to their unregistered or newly registered counterparts.
Small producers are particularly vulnerable in this situation. The inability to shift liability from large targets translates directly into financial strain, as the producers must either meet these inflated targets or purchase additional EPR credits, which can be costly.
Double Fulfilment and Its Implications
The absence of the target-shifting feature presents not just a problem for producers but for the entire EPR system. When unregistered entities are left out of the equation, registered producers bear the full burden of the target, potentially leading to double fulfilment of EPR obligations. This could create a ripple effect across the system:
- Shortage of EPR Credits: As more producers are forced to fulfil targets that do not accurately reflect their share of the responsibility, the demand for EPR credits could surge, leading to a potential shortage.
- Market Manipulation: With fewer EPR credits available, the market could become susceptible to manipulation, driving up the cost of compliance for producers. This would further burden small companies that are already struggling to meet inflated targets.
Currently in the Annual return section, there is a option to attach supporting document in that section. However, that feature is not currently working and is unusable. Secondly the template sheet asks for data only for FY 21-22.
A Call for Reintroducing the Target Shifting Feature
Given the ongoing challenges, it is imperative for the CPCB to reintroduce the target-shifting feature. Allowing producers to adjust their targets at the time of Annual Returns based on the registration status of their counterparties is essential to maintaining fairness in the EPR system.
This would not only ease the financial burden on small producers but also prevent inefficiencies and distortions in the EPR credit market. A well-balanced system is crucial to ensuring that the EPR mechanism achieves its core objective—reducing plastic waste and promoting sustainable production practices.
In conclusion, while the EPR system has made significant strides, the challenges faced by producers, particularly small ones, remain substantial. Reintroducing the target-shifting feature would provide much-needed relief and help maintain the integrity of the EPR system moving forward.