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The Central Pollution Control Board (CPCB) is yet to announce the rules for ‘managing’ plastic waste, but that has not stopped a start-up from placing its bets on the market for ‘plastic credits’ where polluters pay recyclers.
EcoEx, a Delhi-based company founded in September last year, has facilitated the sale of plastic credit certificates for over 2,000 tonnes of waste, totalling ₹25 lakh, on its fledgling trading platform, founder Nimit Aggarwal told BusinessLine .
Solely funded by the founder, EcoEx is in conversation with international investors for a stake sale. The biggest challenge for the start-up, Aggarwal says, lies in “trying to make people understand that we are doing this not ahead of time, but very much on time.”
“We will be able to break even in the first year itself provided the regulations are finalised and all other stakeholders involved fulfil their extended producer responsibility obligations as mandated by the government,” Aggarwal says.
Credit certificates can allow plastic producers, importers and firms that use plastic in their packaging to fulfil their “extended producer responsibility” requirement under the Plastic Waste Management Rules, 2016. The principle of extended producer responsibility entails that producers of products that lead to waste must be held responsible for the proper disposal of this waste.
However, the 2016 rules rely on the Central Pollution Control Board (CPCB) to finalise a policy framework for plastic waste management. The board has been dragging its feet for long, violating multiple deadlines set by the National Green Tribunal.
In June last year, the CPCB announced a draft policy that would give producers the choice of buying credits from recyclers or co-processors as an alternative to contributing to a special fund for plastic waste management or setting up recycling units themselves.
More sellers than buyers
The platform currently has around 35 sellers but less than 10 buyers, Aggarwal says. Evoking interest among plastic producers to buy credits has been difficult amid delays in the policy enforcement. The potential, however, is huge. Under the draft policy, within five years of the notification of the rules, polluters would be required to show their spending on the management of almost the same quantity of plastic waste as their plastic production.
“The recycling market in India has many semi-organised or unorganised players. Getting them on board helps them monetise the extended producer responsibility,” Aggarwal says. EcoEx takes a 5 per cent cut from both buyers and sellers for each transaction on its platform. As with other similar exchanges, the price and quantity of credit certificates sold are determined through auctions on the platform.
Meanwhile, EcoEx is also partnering with municipal authorities on pilots across New Delhi, Mumbai, Pune and Lucknow. “We are formulating a model where the money outflow from producers is divided between all stakeholders,” he said.
The primary burden of waste management falls on municipal authorities in India. EcoEx will share its ledger of transactions with them, making sure that recyclers on the platform are registered with the authorities and are paying them for the municipal plastic waste that is technically owned by the government.
“We are also envisioning the flow of plastic credits directly from the urban local bodies to the producers in case of single use plastic,” he adds.
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