By Sanjiv Nadkarni
Most people have heard or read about the concept of carbon credits. As in carbon credits, new exchanges are evolving to trade in plastic credits. On one side there are big companies (like Pepsi, Bisleri etc) who package their products in plastic bottles.
Soap manufacturers use plastic wrapping. There are innumerable such examples of companies that bring plastic in market. This creates plastic footprint. On plastic exchanges, companies that use plastic for packaging are accountable to collect and recycle plastic.
It is not feasible for bigger companies to get directly involved in plastic waste collection. They do it indirectly through recyclers. Carry bags, wrappers are low value plastic while PET bottles, High Density Polyethylene (HDPE) milk pouches are high value ones when it comes to recycling.
There are lakhs of workers in the country who collect plastic in informal way and many times low value plastic does not even get collected and is found degrading around us.
Recyclers try to encourage workers to collect low value plastic which is used in making bricks and roads. It can also be used in high energy demand industry like cement which burns coal. What cannot be processed is incinerated. Still, nearly 80 per cent plastic goes in landfills, seas and oceans. To control damage to environment, a concept of Extended Producer’s Responsibility (EPR) has come up wherein plastic generating companies are accountable to collect and recycle plastic they have circulated.
As it is not practical for companies to directly get involved in collection of plastic waste, they sign agreement with recyclers to collect it on their behalf. The recyclers become second party of the Plastic Exchange. In early stages, the country was divided in five zones (East, West, North, South and Central).
A company was required to tie up with recyclers in one or more zones where it has factory. If the factories are in Gujarat and Goa, it could tie up with a recycler in Gujarat and meet his EPR. Yet Goa would have plastic strewn around. So in second phase, companies were required to tie up with recyclers located in the state where factory is located.
This led to another problem. If companies tied up with recyclers operating in North Goa, towns in south Goa would still be littered with plastic. In the third phase the recycling has been brought at municipality level. Some gram panchayats are also addressing this problem in right earnest.
ULBs certify how much plastic has been collected by recyclers. Recycler declares how much of total collection is on behalf of company A, B etc. For each kg collected, one plastic credit is assigned. Companies who failed to meet collection target, face penalty. Penalty is Rs 5000 per tonne at the first failure.
It goes up to Rs 10,000 and Rs 20,000 for second and third failure. After that, the Pollution Control Board can serve notice of closure of factory. The plastic generating company can avoid penalty by buying credits. Business process of meeting EPR through buying and selling of plastic credit is very interesting.
From GST invoices, the government knows how many crates of say bottles have been sold by a brand. From weight of each bottle of that product category, total quantity of plastic circulated is known. The company then buys required number of credits from recyclers who have earned them and thus meet its EPR. But someone needs to bring buyers and sellers together and that is the role played by Plastic Exchanges.
Importers of plastic, manufacturers and brands are potential players that will like to join such exchanges.
Recyclers take the collected plastic to re- processors. Credit certificates are issued by accredited re- processors. They issue recovery note (RN) that certifies and serves as evidence that plastic collected has been converted into new product. This completes the recycling cycle.
As credits buying and selling happens on digital exchanges, it becomes very easy to give brand-wise monthly statement to the government to measure effectiveness of meeting EPR obligation.
It is estimated that nearly 50 lakh tonnes of plastic is generated in India annually. Just three states Maharashtra, Tamil Nadu and Gujarat generate one third of country’s plastic. Estimated 12 per cent of total plastic is incinerated; nine per cent is recycled while 79 per cent goes in landfills and oceans.
Fish eat this plastic and we eat fish. Plastic that we generate ends up back in us. Even tap water is known to have granules of plastic. Plastic blocks storm water drains. It clogs drains leading to flooding.
It seems plastic has dubious connection with wealth. States that have high per capita income also use higher quantities of plastic. Goa’s per capita plastic contribution is 60 gms per day against national average of eight gms.
There are companies in Goa that bottle water, soft drinks, liquor, use plastic wrappers who should join plastic credit exchanges and lend their hand to carry out EPR effectively. Newly elected teams of councillors across Goa and particularly the one in Panaji, under Smart City Mission, should pay attention to this problem and set an example to the country by making a significantly less-plastic Goa if not a plastic less Goa.
Plastic is one product that human kind will regret for a long time for having made. As severity of the problem increases, plastic credits will be in demand. Recyclers will like to trade in plastic credits. One day there may even be auctions for these credits because companies will like to have surplus of them to meet demand at peak business times.
Like foreign exchange trade, there may be opportunities to sell credits to other countries as United Nations and WTO tighten the targets. Some start-ups have begun entering this space and one day may play a disruptive role in new age digital business.
People who are crazy enough to think they can change the world, are the ones who do. As is with salt in food, one can say about plastic; Don’t strive to make your presence noticed, let your absence be felt.
The writer works in areas of IT and renewable energy. He can be reached at [email protected]