Reflections on EPR-based Systems Targeting Multi-Layered Plastics

Lubna Anantakrishnan

The impending roll-out of the Extended Producer Responsibility (EPR) Framework seems, at face value, to be a positive step towards tackling the global plastic crisis. However, failing to safeguard the interests of informal waste workers, may lead a well-intentioned policy to have a detrimental effect on millions of livelihoods. From SWaCH’s ongoing work on multi-layered plastic (MLP) collection in Pune, I hope to offer reflections on designing inclusive EPR systems.

There are several reasons that multi-layered plastics are (largely) not handled by the existing informal recycling sector. First and foremost, multi-layered plastics, as the name suggests, are composed of several different layers and grades of plastic, and sometimes with other materials like metal (the inner lining of chips packets, for example). This mixture of materials is technologically challenging to separate for commercial recycling, and even fairs poorly as fodder for environmentally undesirable end-of-life technologies like pyrolysis/plastic-to-fuel. Buyers for multi-layered plastics are few and far between and are typically unable to offer a good price for these materials. Cement plants and other end-of-life processors even charge a tipping fee to accept this material. This means that there is little to no market value for this material.

Even if the value is created for multi-layered plastics, through EPR-based interventions or the presence of a nearby processing plant, the material may still not find its way into the informal waste sector. In addition to having low (if any) market value, this material is extremely light and voluminous which makes it logistically un-viable to handle in the existing informal market. Waste pickers rarely have the luxury to store large volumes of recyclables to sell to scrap dealers, and in what little space they do have it is the denser, higher-value materials that make the cut. Since these plastics are primarily used in food packaging, they often invite rodents, making them even less desirable to recover and store. Scrap dealers face similar opportunity costs and choose to leave out multi-layered plastics from the menu of materials they deal in.

In Pune, the SWaCH-ITC Limited initiative is an example of an EPR-based system designed to ensure the inclusion of waste pickers and informal waste workers. This system buys MLP directly and daily from over 1,000 waste pickers through a fleet of mobile collection vehicles. The intervention was designed to minimize the need for storage and transport of MLP by waste pickers, and incentivized recovery through a fair per kilogram price of Rs. 4. Currently, this system is being reshaped to integrate informal scrap dealers. The presence of SWaCH and its integration into the city’s formal waste management system ensured that waste pickers were consulted and integrated in this system. Pune is not representative of the rest of India in terms of waste pickers’ organization.

In places without waste pickers’ organization, a crucial, albeit challenging the first step of EPR should be to earmark funds for mapping informal sector actors. Guidance on this can be shared by a national network like the Alliance of Indian Waste Pickers. Once these actors are mapped, EPR systems can be designed to complement the existing informal sector and bridge gaps through industry intervention where necessary.

Extended Producer Responsibility-based interventions can be designed to address these challenges in a way that strengthens the existing informal waste sector. EPR legislation for highly recyclable plastics like PET, HDPE, PP and LDPE, which are handled effectively by the informal sector, should be limited to strengthening this sector to maintain and report data on waste handled. Setting up centralized, private collection streams for these materials may be simpler for corporates, but will destroy the livelihoods of all the waste pickers and informal recycling sector actors who will be unable to survive without these viable materials.

With a focus on low value and non-recyclable materials like MLP, EPR interventions can be designed to strengthen the informal waste sector to viably handle these materials. The most straightforward way to do this is to increase the market value for MLP through corporate intervention. This value creation can take a few different forms. In Pune, this is done through an MoU between SWaCH (waste picker cooperative) and ITC Limited (corporate partner) with a mutually agreed minimum per kilogram rate of purchase for this material. Another approach is for corporations to set up or invest in technology that can recycle or generate higher value products from large volumes of MLP. The value creation could also be done artificially, by assuring recyclers an assured minimum selling price. This would create a natural economy for the material. The physical and chemical properties of MLP make it difficult to raise the value high enough to overcome the logistical challenges of sorting and storing it.

Corporates/producers can additionally intervene to bridge the remaining gaps in the informal sector, such as safe storage spaces for waste pickers to sort and store materials, support to scrap shops allowing frequent purchases of MLP, strengthening scrap dealers to maintain data for traceability, and fair compensation to waste pickers and scrap dealers for their environmental contribution. This can be done in partnership with waste pickers’ organizations (where they exist), or with Urban Local Bodies directly. Formalization of informal entities like scrap dealers, aggregators and wholesalers entail both set-up and ongoing costs which may severely impact the financial viability of these entities. Plastic producers can step in to subsidize these costs and invest in capacity building for these entities, in exchange for data on materials handled by these entities.

The availability of local recyclers who can buy continuous and large quantities of MLP is a key part of keeping the system viable. This lowers the need for aggregation, the less risk there is of loss in material quality (which may occur due to rodent infestation, rotting of small quantities of food remnants). Local recyclers also cut down the most inefficient part of the MLP chain – transportation. The onus of ensuring the availability of local sinks for MLP should rest with the plastic producers. Mechanisms should be in place for producers to continue buying MLP in case processing plants shut down or stop accepting MLP. The effective responsibility to ensure that MLP is bought by processors should not be shifted onto the informal waste sector or waste pickers’ organizations.

From an overall system perspective, inclusive EPR interventions should account for the limited ability of informal waste workers (or waste pickers’ organizations) to provide long lines of credit to formal recyclers and to the plastic producing industry. These sectors often function with large volumes of payment and long lines of credit that the informal sector actors, even after capacity building interventions, may be unable to provide. Even a formal waste pickers’ collective like SWaCH in Pune struggles to provide ITC Limited with the credit they require to process payments. Further, the appropriate level of funding by plastic producers should be determined based on a matrix of context-specific factors. Inclusiveness and level of informal sector integration, type of recycling/processing, availability of local recyclers/processors, type of material handled will affect the system cost. More inclusive, environmentally desirable systems can be encouraged through a plastic credit system with varying weightage based on system design. This will create incentives to design systems with better environmental, economic and social impacts and prevent system cost from being the primary factor that dictates corporate investment.

In tandem with this, legislation requiring phasing out non-recyclable materials like MLP, and mandating absorption of recycled plastic by plastic producers is essential. Processes like plastic-to-oil, pyrolysis, plastic-to-road and waste-to-energy should not stand in as permanent solutions to handling non-recyclable materials. Achievable short, medium and long-term targets for completely phasing out these materials should be laid out by the EPR framework, including strict penalties for non-compliance. Similarly, the use of virgin plastics should be phased out in favour of using 100% recycled plastic in the long run. This complementary legislation will support the continued recycling of highly recyclable plastics and reduce the introduction of new virgin plastic into our environment.

The existing informal waste sector is composed of millions of informal and decentralized actors working on very narrow margins in difficult conditions. While setting up such systems from scratch may be challenging, supporting these natural economies is the most socially and economically equitable way for producers to take responsibility for the life cycle costs of the materials they produce.

*Lubna Anantakrishnan is a Project Manager at SWaCH Plus in Pune where she handles waste, livelihoods and recycling-related projects. One of these projects is an EPR-based multi-layered plastic collection system being run in partnership with ITC Ltd since February 2019. The reflections in this paper draw primarily from her experience managing this system. She has a Masters in International Economics from the Johns Hopkins University School of Advanced International Studies (SAIS).