Avoiding the Pitfalls of EPR Fraud: Ensuring Transparency in Plastic EPR and Plastic Credit Markets

India, like many other nations, is grappling with a towering plastic waste challenge. With sustainability climbing higher on the national agenda, the government has rolled out strict Extended Producer Responsibility (EPR) rules under the Plastic Waste Management (PWM) Rules. It is a bold move, but as the system takes shape, concerns over fraudulent practices in plastic credit markets and EPR compliance have surfaced. Transparency and accountability are not just nice-to-haves—they are the backbone of real environmental progress, not just a glossy green facade.

As per the OECD Global Plastics Outlook 2022, global plastic production stands at 460 million tonnes annually. Out of this, a mere 9% is effectively recycled, whereas 19% undergoes incineration, frequently resulting in the emission of harmful pollutants into the atmosphere. Approximately 50% of plastic waste ends up in landfills while 22% of the world’s plastic waste escapes into the natural environment, contaminating oceans, rivers, and delicate ecosystems. Hence, there is a need for robust plastic waste management strategies, such as the implementation of EPR.

Unpacking EPR and Plastic Credit Markets

The introduction of EPR has put the responsibility on the shoulders of producers, importers and brand owners (PIBOs). Under this policy, businesses must ensure that post-consumer plastic waste gets collected, recycled, and disposed of properly. It is a shift that eases the burden on overwhelmed municipalities while nudging businesses toward greener habits, circular economies, and a lighter environmental footprint.

In India, the Ministry of Environment, Forest, and Climate Change (MoEFCC) calls the shots through the PWM Rules. PIBOs are handed yearly recycling targets, which they can meet by setting up their own systems or buying plastic credits from certified recyclers and waste processors. Plastic credits work a bit like carbon offsets—companies that can’t recycle directly can fund projects that do the heavy lifting, collecting and processing plastic waste on their behalf. When it’s done right, it helps boost waste management infrastructure in places like India, where every bit of help counts.

Dark Side of EPR Fraud in India

Despite its potential benefits, the plastic credit system in India has witnessed an alarming rise in fraudulent activities. The Central Pollution Control Board (CPCB) recently uncovered a jaw-dropping scam where four recycling firms in Gujarat, Maharashtra, and Karnataka churned out over 600,000 fake EPR certificates. These firms falsely claimed to have collected and processed plastic waste, selling fake credits to PIBOs attempting to meet regulatory requirements. Simply put, it is a betrayal of the

system’s promise where companies think they are in the clear, but the plastic keeps piling up, and the environment takes a hit.

Similarly, too many transactions lack solid paperwork, with some shell companies whipping up fake records of waste they have never touched. Without a tight tracking system, fraudsters can manipulate the system. Worse, fake credits flood the market, dragging down the value of the real ones and discouraging honest recyclers from participating. It is a domino effect that could stall India’s waste management dreams.

The CPCB has stepped up with tougher audits and penalties. However, enforcement remains a challenge, particularly in unorganized waste collection sectors where oversight is minimal. In such a scenario, the government should adopt more technology-driven solutions to enhance accountability and prevent further misuse of the system.

Tech as the Transparency Fix

Blockchain, for one, could track plastic credits on a tamper-proof digital ledger—every move recorded with no fakes slipping through. Paired with government oversight, authorities can create an end-to-end transparent framework for tracking plastic waste from collection to recycling. Technologies like AI and machine learning can be used to identify the fishy patterns.

To enhance traceability, waste collection and recycling activities should be linked to QR codes and geotagging. For instance, it can be started by assigning a unique code to every batch of plastic waste, and regulators can follow it live. This approach can eliminate false claims and ensure that only authentic recycling efforts are rewarded with plastic credits.

Similarly, a public dashboard could help share real-time EPR data—credit trades, collection stats, certified players—all out in the open for anyone to check.

Shoring Up India’s EPR Future

Independent, frequent, and thorough audits are key—for both PIBOs and PWPs. However, the auditors themselves need to watch to prevent any conflict of interest. Plastic credit trading should shift to regulated digital platforms with strict checks, cutting out the backroom deals. At the same time, the penalties need to sting—big fines, license losses, and even court cases for the worst offenders. A zero-tolerance stance could help keep everyone on the right side of law.

This is not just about rules—it is about India’s shot at a sustainable future. Fraud threatens to derail the country’s plastic waste fight, but with tech, tighter oversight, and real transparency, the EPR system could shine. A solid framework wouldn’t just clean up India’s act—it would put the nation on the map as a waste management leader. The clock's ticking, and the choice is clear: make it real or risk it all being just another green dream.

(The author is the founder of EcoEx.)