New Delhi: India's plastic credit market could grow to $1.67 billion by 2030 from $982 million now, bolstered by the mandate under the extended producer responsibility (EPR) for plastic producers, importers and brand owners to use recycled content in their plastic packaging, say industry experts. They also flagged challenges in the procurement of plastic for recycling and issues with the price discovery mechanism in the credit market.
Organisations can buy and sell plastic credit, a tradable unit representing the collection and recycling of plastic waste. The mandate to use recycled content in plastic packaging came into effect on April 1 this year. "The trajectory of the plastic credit market will mirror the rapid growth in plastic recycling services," said Saunak Saha, partner, Climate Change and Sustainability Services at EY India. "As per the Plastic Credit Market Forecast of 2024, the Indian plastic recycling services market is projected to be valued at approximately $1.67 billion by 2030, growing at a CAGR of 14.5%," he said. As part of plastic waste management rules under the EPR, recycled content should comprise 5-30% of the total plastic packaging of a plastic producer, importer or brand owner in the first year, depending on the plastic category. This portion of recycled content they must use will increase to 10%-60% by FY29. "It's a big positive; the mandate has expanded the market for recyclers, incentivising industry to thrive," said Rashi Agrawal, chief business officer at Banyan Nation, a plastics recycling company.
However, the obligation to use recycled plastics may drive up packaging costs due to reverse logistics, or collecting plastic from households or other sources.
"Reverse logistics will be a challenge - we need to find a way to ensure that plastics are collected from consumers and reach recyclers, apart from managing the additional costs involved in collection," said Sandeep Kumar Mohanty, partner and leader, Climate and Sustainability Strategy, at PwC India.
"The biggest factor for recyclers is procuring the material at the right price point, quality and in required volumes. A recycler may have the capacity, but sourcing quality plastics at the right price is the main bottleneck," said Kashyap Devulapally, cofounder of Elima, a materials recycling company.
"The biggest challenge for recyclers is procurement. A recycler may have the capacity, but how does it get into the market and collect the plastic," said Kashyap Devulapally, cofounder of Elima, a waste management service provider.
Organisations can buy and sell plastic credit, a tradable unit representing the collection and recycling of plastic waste. The mandate to use recycled content in plastic packaging came into effect on April 1 this year. "The trajectory of the plastic credit market will mirror the rapid growth in plastic recycling services," said Saunak Saha, partner, Climate Change and Sustainability Services at EY India. "As per the Plastic Credit Market Forecast of 2024, the Indian plastic recycling services market is projected to be valued at approximately $1.67 billion by 2030, growing at a CAGR of 14.5%," he said. As part of plastic waste management rules under the EPR, recycled content should comprise 5-30% of the total plastic packaging of a plastic producer, importer or brand owner in the first year, depending on the plastic category. This portion of recycled content they must use will increase to 10%-60% by FY29. "It's a big positive; the mandate has expanded the market for recyclers, incentivising industry to thrive," said Rashi Agrawal, chief business officer at Banyan Nation, a plastics recycling company.
However, the obligation to use recycled plastics may drive up packaging costs due to reverse logistics, or collecting plastic from households or other sources.
"Reverse logistics will be a challenge - we need to find a way to ensure that plastics are collected from consumers and reach recyclers, apart from managing the additional costs involved in collection," said Sandeep Kumar Mohanty, partner and leader, Climate and Sustainability Strategy, at PwC India.
"The biggest factor for recyclers is procuring the material at the right price point, quality and in required volumes. A recycler may have the capacity, but sourcing quality plastics at the right price is the main bottleneck," said Kashyap Devulapally, cofounder of Elima, a materials recycling company.
"The biggest challenge for recyclers is procurement. A recycler may have the capacity, but how does it get into the market and collect the plastic," said Kashyap Devulapally, cofounder of Elima, a waste management service provider.
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