Can increased payouts to recyclers prevent irresponsible disposal of e-waste in the country? Yes, the Narendra Modi government has informed the Delhi High Court.
But electronics companies that need to pay recyclers to meet their recycling target are asking what’s the need to fix pricing if the government is already ensuring “environmentally sound” e-waste management.
These arguments are at the centre of a legal debate between the Union Ministry of Environment Forests and Climate Change, and electronic companies, revealed three affidavits filed by both sides and exclusively reviewed by Newslaundry. The affidavits were filed by the ministry, its technical expert body, the Central Pollution Control Board, and first petitioner Havells.
What has triggered the battle is a rule introduced by the environment ministry in 2024 that sets minimum and maximum prices for a key tool in India’s recycling system: the Extended Producer Responsibility certificate. These certificates act as receipts. When an electronics company pays a certified recycler to dispose of e-waste, it gets an EPR certificate as proof. It’s how companies show they’re meeting their legal recycling targets, similar to how carbon credits work in climate policy.
Before the new rule, companies and recyclers could negotiate prices freely. And now they are pushing back after the price caps.
Newlaundry had earlier reported in detail on the cost of recycling and EPR certificates and what it meant for India’s e-wonderland dream.
What the affidavits say
Havells moved the high court in November last year, challenging the government’s new pricing rule. Daikin, Voltas and Blue Star also filed similar petitions. LG and Samsung are the latest to mount a legal challenge.
The environment ministry, in its counter affidavit dated December 20, 2024, said the pricing cap was introduced to prevent pollution and promote “environmentally sound” management of e-waste.
“In order to ensure that environmentally sound management of waste is undertaken so that pollution of environment does not happen due to unmanaged waste, a reasonable restriction was imposed by fixing the lowest and highest price of the EPR certificate, between which both producers and waste processors can determine the price of EPR certificates based upon agreed modalities,” the affidavit said.
In its reply to the ministry on January 15, Havells wondered if the EPR certificate, verified by the CPCB, itself is not enough to prove that recycling was “environmentally sound”.
“On the one hand, the respondents [the ministry and CPCB] have themselves admitted...that each EPR certificate confirms that the equivalent quantity of waste has been processed in an environmentally sound manner, and on the other hand, the Respondent is seeking to fix prices of the EPR certificate on a presumption that there may be a risk that the price of the EPR Certificate may not cover the cost of environmentally sound management of waste,” Havells’s affidavit said.
Havells warned that the increased payout to recyclers could trigger “sharp and unrealistic escalation in prices” and “would impact affordability and access to products in a free market”.
The electronics companies have termed the 2024 amended rules and subsequent guidelines for battery and e-waste management in the country “ultra vires” and “arbitrary”. These rules and guidelines, made between March and September 2024, have mandated a minimum-maximum payout to recyclers. Exchange of EPR certificates is done through a CPCB portal by registered recyclers and producers.
The ministry said that new pricing was arrived at after factoring in the market realities, including the cost of collection, transportation, and recycling. Another reason, it said, was to ensure recyclers don’t undervalue EPR certificates at the cost of the environment. “Thus, starting a race to the bottom in price of EPR certificate on the low side without ensuring that the objective of environmentally sound management is achieved, in effect resulting in environmental pollution due to sub-optimal waste processing,” read the ministry affidavit.
CPCB, in its affidavit dated March 5, 2024, said the rule can transform the recycling sector and ensure “environmentally sound” processing.
But Havells’s argument essentially was that the government was fixing what was not broken. It said the price threshold was based on “presumptions” and “conjectures”.
“The Respondents… has failed to show that there is any lapse in the sound management of waste, which has necessitated the fixation of prices of the EPR certificates,” the Havells affidavit read.
Before the new rules, producers could purchase EPR certificates from recyclers at a mutually agreed-upon rate. The central government can issue guidelines and rules for the protection of the environment under landmark “umbrella” legislation – the Environment Protection Act, 1986.
In addition, Havells challenged the environment ministry’s powers to fix prices under the Environment Protection Act, which instead mandates environmental protection. The government justified the rules change under the act, saying protection of the environment can’t be delinked from the price cap.
Recyclers’ association too jumps in
With two more electronics giants, LG and Samsung, challenging the 2024 rules and guidelines, the central government sought time to file a “composite affidavit” during a hearing on Tuesday.
The Material Recycling Association of India (MRAI), a group of processors, sought an impleadment in the case – to become part of the proceedings, despite the petitioners not making them a party in the case – since it has “an interest in the correct solution of the questions” involving the case. A bench led by Chief Justice DK Upadhyay and Justice Tushar Rao Gedela allowed MRAI’s petition but said that it could make only “oral observations” and not file written submissions.
MRAI’s petition, filed by one Gaurav Sharma, justified CPCB’s price slab: “The price slab for EPR has been fixed to ensure environment friendly responsible recycling of waste as well as to aid the conversion of informal waste management economy to a formal one.”
It accused producers of creating an environment of bidding and tendering in which recyclers “are forced to cut corners” by lowering EPR certificate prices. This, MRAI said, can “endanger” the formal recycling industry.
The next hearing is scheduled for May 16.
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