A new report by the London-based Environmental Investigation Agency (EIA) is raising alarm bells about Extended Producer Responsibility (EPR) schemes in the UK and India for plastic waste recycling.
The agency alleges ‘alarming levels’ of fraud in the credit-based EPR schemes. In the UK alone, the IEA estimates companies may be defrauding the system in GBP 50 million annually.
The first of two investigative reports highlights how fraudulent practices within the UK’s packaging EPR scheme are not only compromising recycling targets but also contributing to ‘waste colonialism’ by illegally exporting waste overseas and deviating funds that should improve recycling infrastructure in the Global South.
United Kingdom
The UK’s packaging EPR schemes involves plastic producers purchasing Packaging Recovery Notes (PRN) or Packaging Export Recovery Notes (PERN) from recyclers or exporters to meet mandated recycling targets. PRNs and PERNs serve as evidence that packaging waste has been recycled
In 2023, the UK’s Energy Agency reported that plastic PRN and PERNs generated GBP 306 million in revenue in 2023. Based on testimony from ‘several industry sources’, the EIA believes at least 10% to 15%, or GBP 30 to 50 million is likely fraudulent.
“The opaque nature of the recycling system makes it difficult to pinpoint exact figures, but the discrepancy between reported plastic recycling rates and actual recycling suggests widespread malpractice,” the report reads.
The IEA said an unusual spike in plastic waste exports during the third quarter of 2023 raised red flags. Although recycling plants across Europe and globally were reducing production volumes or even shutting down, PRN and PERN claims continued to rise. The UK reported a record plastic packaging recycling rate in 2023.
Data analysis shows a growing gap between the volume of plastic reported as placed on the UK market and the claimed amount of recycling, a discrepancy the IEA and its sources attribute at least in part to fictitious claims. Another example is the gap between the UK’s customs data and its National Packaging Waste Database (NPWD). Customs recorded 567,593 tonnes of exported plastic waste in 2023, while PRNs were claimed on 611,168 tonnes, suggesting an additional 43,575 tonnes—equivalent to GBP 12 million—unaccounted for.
EIA’s investigation identified 13 methods of committing PRN and PERN fraud, broadly categorised into data entry manipulation, fictitious tonnage, and illegal shipments.
The UK government has announced plans to reform the waste registration system and bring it under environmental permitting, with legislation expected later this year. Additionally, the Department for Environment, Food & Rural Affairs (DEFRA) plans to introduce a mandatory digital waste tracking service by 2025 to curb waste crime and increase transparency in the recycling supply chain.
IEA’s report acknowledges these proposed reforms as positive steps, but warns that the success of digital tracking will depend heavily on data integrity across the entire recycling network.
India
The report also alleges widespread fraud in India’s EPR system, manly through the use of credits purchased from recyclers.
In 2023, a Central Pollution Control Board (CPCB) audit uncovered 600,000 fake plastic recycling certificates.Four companies — Enviro Recyclean Pvt Ltd, Technova Recycling India, Asha Recyclean and Shakti Plastics Industries — were found to have issued certificates without processing any waste.
“Random sampling of 2,348 recycling facilities suggested that the scale of fraud could be significantly larger, as many other facilities are likely involved in similar malpractices,” the report reads.
The IEA said companies exploit loopholes in India’s EPR system with ease, facilitated by a lack of third-party certification.
The agency recognised private initiatives such as Verra’s plastic credit scheme have attempted to provide marked-driven solutions to this problem. However, it pointed to the system’s limitations, including ‘funding gaps, unclear regulations and significant information asymmetries.’
The Indian government reports plastic recycling rates of 60%, but independent studies put the figure at around 8%.