Impact of new plastic recycling rules on FMCG

The Indian government’s recent plastic waste management guidelines, effective from April 1, introduce strict recycling mandates aimed at reducing plastic waste and promoting sustainability. These new rules will significantly impact the FMCG sector, challenging companies to meet compliance and maintain sales.

The new guidelines require brand owners to incorporate recycled plastic into packaging, with set targets: 30% for rigid plastics, 10% for flexible plastics, and 5% for multi-layer plastics by FY26. 

Producers must also ensure the collection and recycling of their product packaging, making Extended Producer Responsibility (EPR) a key aspect of the regulations. These targets apply to all FMCG companies in India, necessitating changes to their packaging strategies.

The FMCG sector faces multiple challenges in complying with the new guidelines. Limited food-grade recycled PET (rPET) capacity and a shortage of suitable materials hinder efforts to meet the recycling targets. 

Smaller businesses, particularly, may struggle with the high costs associated with infrastructure upgrades and the complexity of food safety in recycled plastics. Additionally, ensuring the cleanliness and safety of recycled materials requires advanced decontamination technologies, which are expensive and difficult to scale.

The FMCG sector is calling for a phased implementation of the guidelines, providing time to build the necessary infrastructure. Reportedly, experts suggest that a gradual approach will allow for a smoother transition, helping companies align with recycling targets without compromising product quality.