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º¬Ðß²ÝÉçÇø Environment Protection Act 1986 (EPA) includes a robust waste management framework known as the extended producer responsibility (EPR) regime. This is operationalised through the rules issued under the EPA.

Within the EPR framework, producers, brand owners and importers handle and manage battery, plastic and electronic waste through recycling, reusing or proper disposal. In doing so, they must meet specific targets to ensure compliance. They can achieve these targets by purchasing EPR certificates. The regulations allowed the parties to negotiate the terms for buying and exchanging these certificates.

However, this changed in March 2024, when the government amended the three separate rules governing e-waste, plastic waste and battery waste in regard to the purchase and transfer of EPR certificates. The 2024 amendments establish the floor and ceiling prices for purchasing or exchanging the EPR certificates and link them to environmental compensation (EC), which is levied in the event of any default in complying with the EPR obligations.

Major electronics and appliance manufacturers, such as Daikin, Samsung, LG, Havells, Voltas etc., have challenged these amendments at Delhi High Court. They argue on a number of fronts. These include contentions that the new rules lack legislative competence and are unrelated to the goals of protection and improvement of the environment under the EPA.

Further, the amendments involve excessive delegation because the parent legislation, the EPA, does not permit the government or the Central Pollution Control Board to control the terms on which EPR certificates are exchanged. The provisions are constitutionally invalid, infringing on the fundamental right to equality and the right to engage in any trade or occupation. Linking EPR certificates with EC assumes that there has been a default, even when there may be none in meeting waste recycling targets. Last, they claim that the government¡¯s price-fixing mechanism is arbitrary and disregards market realities. It places an unfair burden on producers and ultimately benefits recyclers at the expense of producers.

The government has defended the 2024 amendments by asserting that the provisions of the EPA allow it to introduce rules or take necessary action in order to protect and improve the environment. Further, poor waste management has a negative impact on the environment.

The prices agreed between the parties do not account for the costs of proper waste management. Setting price limits, therefore, ensures fair payment is made for recycling waste. The EC is not a punishment; it is a way to cover the costs of handling the unmanaged waste. This differs from the penalties imposed for non-compliance with the EPA. Last, the minimum and maximum prices have been set based on a detailed market assessment. That followed a process that included feedback from stakeholders on the draft amendments.

The amendments place unnecessary restrictions on manufacturers, under the guise of strengthening environmental accountability. This gets in the way of their desire and ability to engage in sensible transactions with recyclers. The change risks stifling legitimate business opportunities and fails to address the challenges posed by the informal waste management sector to the established industry.

The government should focus on strengthening the existing formal recycling industry. However, such an outcome will not be achieved by imposing penal conditions on producers.

Although the government is given significant authority under the EPA, private entities must be given the power to agree on the business terms of EPR arrangements.

This approach will not only support º¬Ðß²ÝÉçÇø commitment to improving the ease of doing business but will also bring about a more effective collaboration in tackling waste management challenges. The new rules add another layer of regulation. This only increases the compliance and financial burden the industry has to carry.

The way Delhi High Court decides this matter will be vital in shaping the future of waste regulation. It will also play a crucial part in establishing harmony between environmental goals and business interests in the country.

Ameet Datta is managing counsel, Rishikaa is a senior associate and Sejal Lahoti is an associate at ADP Law Offices