After four years of learning to navigate India’s Extended Producer Responsibility (EPR) regime, the industry should have welcomed the arrival of a dedicated electronic trading and settlement platform for EPR certificates as a sign of maturity.

CPCB, in partnership with MSTC Limited, introduced EPRETP- a regulated, stock-exchange-style marketplace where obligated entities and authorised processors can list, bid for and settle EPR certificates. The platform envisages structured double-sided auctions, a fixed-price “buy it now” mechanism, and a Unified Single Sign-On layer intended to connect CPCB registration with the trading platform. The price ceiling is linked to the environmental compensation charges prescribed for the respective waste streams.

On paper, this looks like the market infrastructure India’s EPR regime has been missing. But there is a more fundamental question: what problem is EPRETP solving? The core weakness in India’s EPR credit market has never been the absence of a trading venue. It has been trust in what a credit represents.

The market does not have a trading problem. It has a verification problem. CPCB audits have already exposed the scale of the challenge. Several hundred thousand fraudulent plastic waste certificates have reportedly been identified, with environmental compensation implications running into tens of million rupees.

That is fundamentally a verification problem- not a market-structure problem.

A sophisticated exchange cannot make an unreliable underlying asset reliable. If the certificates entering the system have not been independently and consistently verified, EPRETP risks doing little more than giving questionable credits a more sophisticated marketplace.

This is where the comparison with financial markets becomes important. Stock exchanges do not create trust in isolation; the wider financial infrastructure-including clearing, settlement and regulatory controls, provides confidence that the asset being traded actually exists and is valid.

EPRETP can provide transparency around the transaction. The more difficult question is whether the system can provide equivalent confidence in the certificate. 

That is the central mystery surrounding the platform.

Another layer on an already fragmented system

The problem becomes more complicated when EPRETP is viewed alongside the existing CPCB ecosystem. Obligated entities already navigate multiple category-specific systems covering plastic packaging, e-waste, batteries, tyres and used oil. Different registration processes, filing cycles, documentation requirements and technical issues have created a compliance environment that many companies already find difficult to manage.

The move towards the Common EPR (CEPR) Single Sign-On portal is intended to address some of this fragmentation. But the migration itself is still evolving, with different waste streams and entities moving through the system at different stages.

Introducing a trading platform during this transition risks adding another layer to the compliance architecture before the underlying architecture has been fully consolidated.

For producers managing multiple legal entities and several EPR categories, the practical concern is straightforward: which portal governs which obligation, when does migration become mandatory, and how do trading and compliance records interact?

Until those questions are answered clearly, the promised simplification may remain elusive. Price discovery may not mean real price discovery

There is another issue that a formal exchange cannot solve simply through auction design: how EPR credits are actually sold in the market.

In bilateral transactions, recyclers may not sell EPR certificates as a standalone product. Instead, the certificate can be bundled with the purchase of processed material or scrap. A producer may effectively have to buy both the recycled material and the associated certificate as part of the same commercial arrangement.

This makes the true cost of compliance difficult to observe.

A formal exchange can make the price of a listed certificate transparent. But there is also a legitimate commercial case for bundling EPR certificates with material transactions. In practice, a producer may value not just the certificate, but the underlying transaction through which it obtains scrap or recycled raw material. Bundling an EPR certificate with the purchase of eligible scrap or recycled material can therefore simplify procurement, provide greater certainty of material availability, and align compliance spending with the physical movement of waste and recycled feedstock.

The question for EPRETP is not whether such bundling should exist-it can be an efficient feature of the EPR market—but whether the platform's design can accommodate and transparently value these combined transactions.

If certificates and material are ultimately required to be traded through separate mechanisms, the market may lose some of the commercial efficiency that bilateral arrangements currently provide, especially for the resource scarce categories.

In that scenario, the exchange may improve visibility of prices without necessarily improving price discovery.

The real problem may be capacity, not liquidity

The distinction matters because EPR markets ultimately depend on the physical recycling ecosystem behind them. Producers who fall short of their obligations need certificates from processors that have recycled or recovered the relevant material. If processing capacity is insufficient, no trading mechanism can manufacture additional certificates.

This is already visible across several waste streams.

Formal PET recycling capacity is expected to remain under pressure relative to obligated demand. E-waste processing faces a “missing middle” of technically capable, mid-sized facilities. In flexible plastics, industry participants continue to flag limited capacity for difficult-to-recycle categories even as recycled-content and EPR obligations increase.

In such markets, an exchange cannot eliminate scarcity. It can only make that scarcity more visible—and potentially allow it to be priced more aggressively.

That distinction is particularly important for categories such as multilayer plastics or certain battery chemistries, where the number of credible processors may be limited.

Price discovery works best when there are enough independent buyers and sellers to create genuine competition. Where supply is structurally constrained, an auction may simply discover how expensive scarcity is.

The economics of compliance make this concern even clearer.

As reported by The Economic Times, Panasonic Energy India’s Pithampur facility reportedly came close to a difficult economic decision after management estimated that meeting a 50% collection obligation could require roughly ₹50 crore in EPR certificate purchases, against projected annual profit of only around ₹6 crore.

Whether or not that particular calculation represents the economics of every battery producer, it illustrates the broader problem: EPR compliance costs can become disproportionately large when certificate supply is thin and obligations rise faster than recycling capacity.

The issue is particularly sensitive in batteries because different chemistries, collection obligations and recycling economics do not necessarily develop at the same pace. The technology and market are still evolving.

If available certificates are scarce, a transparent auction does not necessarily make compliance cheaper. It may simply make the scarcity—and its price—more transparent.

Timing could create another volatility problem

There is also a structural question about when demand will reach the exchange.

Most producers work towards their EPR obligations around financial year-end. If EPRETP eventually becomes the primary or mandatory channel for certificate transactions, a large volume of demand could converge into a relatively narrow period before compliance deadlines.

That creates the possibility of predictable annual price spikes.

Other environmental markets have faced similar challenges and have introduced mechanisms such as banking,
carry-forward provisions and staggered compliance windows to prevent demand from becoming excessively concentrated.

For EPRETP, the key question is therefore not merely whether the platform can conduct an auction. It is whether the broader EPR framework can prevent the auction itself from becoming a bottleneck.

Otherwise, the platform could solve one problem—opaque bilateral pricing—while creating another: highly predictable deadline-driven volatility.

So, what should EPRETP actually fix?

The existing EPR mechanism was not fundamentally wrong in its basic design.

A producer that falls short of its obligation purchases certificates from a processor that has exceeded its own eligible generation. The mechanism creates an economic incentive for recycling capacity and allows the government to avoid directly determining every commercial transaction.

What the system needed first was stronger verification, better auditability, portal consolidation and greater clarity around certificate ownership and validity.

EPRETP can still become valuable—but only if it is built on those foundations.

The platform should ultimately answer five basic questions with confidence:
1. Is the certificate genuine?
2. Has the underlying recycling actually happened?
3. Can the certificate be traced back to a verified processor and transaction?
4. Does the price reflect genuine market competition rather than structural scarcity or bundled transactions?

If the answer to these questions is yes, an exchange could bring significant value to India's EPR regime. It could improve transparency, standardise transactions, reduce information asymmetry and create a more efficient compliance market.

But if the answers remain uncertain, the exchange risks solving the easiest part of the problem first.

And that may be the real mystery behind EPRETP.

India does not necessarily need a better place to trade EPR credits. It first needs greater confidence that the credits being traded are worth what the market says they are.

Saurabh Shah is the Managing Director of Landbell GreenForest Solutions India.