Environmental Compliance: Producer Responsibility, Carbon Credits and Energy
Underneath the reporting sit actual obligations with registrations, targets, returns and penalties. Extended producer responsibility is the one that reaches the largest number of Indian businesses, including many that have no reporting obligation at all. This is also the area where we were least able to read primary sources during this build, and the page is marked accordingly.
- Extended producer responsibility across three waste streams
- The carbon credit trading scheme, and what is actually in force
- The energy efficiency regime it sits alongside
- Corporate social responsibility, and the social pillar
Three streams, one structure
India operates three separate extended producer responsibility regimes, for plastic packaging, for electrical and electronic equipment and for batteries. They share an architecture, central registration, returns, registered recyclers, certificates and environmental compensation, but they do not impose the same obligations on the same classes of person, and their liability calculations and targets differ.
The structural point is worth making before the numbers. Extended producer responsibility is not a reporting obligation, it is a purchase obligation: the obligated entity has to acquire certificates evidencing that a quantity of material was recycled by a registered recycler. That makes it a procurement and budgeting item with a market price attached.
Plastic packaging. Schedule II to the plastic waste management rules, as substantially revised by G.S.R. 237(E) of 31 March 2026, which came into force on publication. The obligation reaches producers, importers and brand owners. There are now five categories, not four: rigid packaging, flexible packaging of one or more plastic layers, multilayered packaging containing plastic and at least one non-plastic layer, compostable packaging, and biodegradable packaging.
| Financial year | Category I | Category II | Category III | Category IV |
|---|---|---|---|---|
| 2024-25 | 50% | 30% | 30% | 100% |
| 2025-26 | 60% | 40% | 40% | 100% |
| 2026-27 | 70% | 50% | 50% | 100% |
| 2027-28 onward | 80% | 60% | 60% | 100% |
Minimum recycling or processing. For category IV the obligation is processing through permissible composting routes rather than conventional mechanical recycling. Category V runs on the prescribed biodegradation and certification route and carries no ordinary recycling percentage.
| Financial year | Category I | Category II | Category III |
|---|---|---|---|
| 2025-26 | 30% | 10% | 5% |
| 2026-27 | 40% | 10% | 5% |
| 2027-28 | 50% | 20% | 10% |
| 2028-29 onward | 60% | 20% | 10% |
Minimum recycled content after the 2026 amendment. Recycled content does not apply in the same way to categories IV and V, which are compostable or biodegradable. Category I also carries separate reuse obligations for specified rigid packaging, which depend on capacity and on whether the producer is in food, beverage, household or personal care, and cannot be collapsed into a single percentage.
Two recent amendments matter: G.S.R. 73(E) of 23 January 2025 revised marking, labelling and disclosure including electronic traceability options, and G.S.R. 237(E) of 31 March 2026 revised the definitions and the category structure, strengthened recycled content and reuse, and dealt more fully with certificate generation, transfer and compliance accounting.
Electronic waste. Under the 2022 rules the recycling obligation falls on a producer of listed equipment, a defined expression wide enough to catch relevant manufacturers, own-brand sellers and importers. Brand owner is not a separate regulated class here, unlike plastic packaging.
| Financial year | Producer recycling target |
|---|---|
| 2023-24 | 60% |
| 2024-25 | 60% |
| 2025-26 | 70% |
| 2026-27 | 70% |
| 2027-28 onward | 80% |
The percentage applies to the quantity of waste calculated under Schedule III, using the prescribed average life of the equipment. It is not a percentage of current-year sales, which is the usual misreading.
There is no general recycled-content obligation under the electronic waste rules equivalent to the plastic or battery requirements; the obligation is met through certificates generated by registered recyclers. Solar photovoltaic modules, panels and cells sit under a separate storage and waste-management arrangement running to 2034-35. The 2024 amendment authorised a regulated exchange-price range for certificates, linked to environmental compensation rather than left to the market. No 2025 or 2026 amendment has replaced the 60, 70 and 80 per cent progression.
Battery waste. Under the 2022 rules the obligation is on a producer, principally a person manufacturing or importing batteries, including equipment containing batteries, and placing them on the market. Again, not on brand owners as a distinct class. Liability is calculated from the quantity placed on the market and the prescribed average life of the battery.
| Financial year | Portable | Electric vehicle | Automotive | Industrial |
|---|---|---|---|---|
| 2024-25 | 70% | 70% | 55% | 55% |
| 2025-26 | 80% | 80% | 60% | 60% |
| 2026-27 | 90% | 90% | 70% | 70% |
| 2027-28 | 90% | 90% | 80% | 80% |
| 2028-29 onward | 90% | 90% | 90% | 90% |
Minimum recovery of battery materials. These are minimum material-recovery efficiencies applicable to recycling, not collection targets.
| Financial year | Portable | Electric vehicle | Automotive | Industrial |
|---|---|---|---|---|
| 2027-28 | 5% | 5% | 35% | 35% |
| 2028-29 | 10% | 10% | 35% | 35% |
| 2029-30 | 15% | 15% | 40% | 40% |
| 2030-31 onward | 20% | 20% | 40% | 40% |
Minimum domestically recycled material in new batteries.
Amendments of 14 March 2024, 20 June 2024 and S.O. 958(E) of 24 February 2025 refined registration, returns, certificate generation and transfer, guidance and enforcement. None of them displaced the percentages above.
What is in force and what is being built
The power ministry notified the carbon credit trading scheme under the energy conservation legislation through S.O. 2825(E) of 28 June 2023, and amended it through S.O. 5369(E) of 19 December 2023 to add the offset mechanism, under which projects are registered and certificates issued to non-obligated entities. The implementing agency published the detailed procedure for the compliance mechanism in July 2024 and version 1 of the detailed procedure for the offset mechanism in March 2025, effective 27 March 2025.
On 25 March 2026 the agency invited stakeholder comments on provisionally eligible accredited carbon verification agencies. That is a milestone, not the current state: the carbon market portal now publishes the agencies since empanelled under the scheme.
Binding targets began in FY 2025-26. The greenhouse gases emission intensity target rules 2025, G.S.R. 739(E) of 8 October 2025, gazetted 9 October, set plant-specific targets for FY 2025-26 and FY 2026-27 for 282 entities in primary aluminium, cement, chlor-alkali and pulp and paper. The amendment rules, G.S.R. 25(E) of 15 January 2026, added a Second Schedule covering 208 further entities in secondary aluminium, petroleum refining, petrochemicals and textiles, taking the notified population to 490 across seven broad sectors.
For the 208 added in January 2026 the FY 2025-26 target is expressly pro rata for January to March 2026, not a retrospective full year, and their FY 2026-27 target preserves the reduction percentage that would have applied had they been notified for the whole of FY 2025-26.
There is no sector target value
The operative number is the greenhouse gas emission intensity stated against the individual plant or entity, row by row in the First and Second Schedules, separately for FY 2025-26 and FY 2026-27, generally in tonnes of carbon dioxide equivalent per tonne of equivalent product. Summaries describing a 3 to 7 per cent reduction for the January expansion give the general range of reductions, not the legally operative value for any particular plant. A client has to use the number in its own scheduled row. An entity whose verified intensity is below its target is eligible for certificates; one above it must meet the shortfall, converted by reference to equivalent output, by surrender or purchase.
The proposed extension to iron and steel remained a draft, published as G.S.R. 517(E) on 2 July 2026, as at 17 September 2026. It is not in the binding population and not in the count of 490.
And a correction
The perform, achieve and trade mechanism is the long-running energy efficiency programme for designated consumers, with tradable energy saving certificates as its instrument. The implementing agency reports that, as at 2025, the programme covered 1,333 energy-intensive industries representing around 55 per cent of total industrial energy consumption and had delivered cumulative savings of 25.78 million tonnes of oil equivalent. Those figures were unchanged on the agency's page as at 17 September 2026. They are cumulative programme figures rather than statutory values and are re-checked at the six-monthly review.
A correction worth making
The energy efficiency mechanism has not been abolished or wholly subsumed by the carbon credit trading scheme, but neither is it simply a separate programme. In a written parliamentary answer of 29 July 2024 the power ministry stated that nine greenhouse-gas-intensive sectors covered by the efficiency mechanism would transition gradually to the carbon credit trading scheme by FY 2026-27, while four other energy-intensive sectors, thermal power plants among them, would continue under it. Adding new industries through energy audits also continues. So both programmes remain operational and selected sectors are migrating between them, sector by sector, through notified intensity targets. Binding targets have so far been notified for 490 entities across seven broad sectors, and the proposed addition of iron and steel remained a draft as at 17 September 2026. An announced migration is not the same as a replacement, and the frequent claim that the efficiency mechanism has been subsumed is still wrong.
Where to go next
Environmental, Social, and Governance
Back to the main page: what we do, how an engagement is structured, and how to reach us.
Business Responsibility and Sustainability Reporting: Who Reports, What, and From When
The reporting obligation, how the top one thousand population is actually determined since the 2024 change, the nine core attributes subject to verification, and the glide path year by year.
Getting the Core Verified: Assurance, Assessment and the Independence Bar
The 2025 change from reasonable assurance to assurance or assessment, who may provide it, the conflict rules that decide which firm can do what, and the standards an engagement is conducted under.
Building an ESG Framework That Survives Contact With the Data
Why most sustainability programmes fail at the data layer rather than the policy layer, how to run a materiality assessment that is defensible, integrating sustainability into governance and risk, and what a first year should actually attempt.
Reporting Beyond India: ISSB, CSRD, CBAM and What Buyers Are Asking
The international sustainability standards and India's position on them, the European reporting directive after it was cut back, the carbon border mechanism now in its definitive phase, and why the real pressure on Indian exporters comes through contracts rather than regulators.
Send an enquiry
If you have an extended producer responsibility obligation, the useful first question is whether you are registered and what your certificate purchase position is against target. That is usually where the exposure sits.
Position as at 17 September 2026. Reviewed every six months.
This page is general information, not professional advice. Sustainability regulation is the fastest-moving area on this website and the one where published material ages worst. The securities regulator has softened its assurance requirement, made value chain reporting voluntary and redefined who counts as a value chain partner, all since 2024. The European Union has cut back the scope of its reporting directive and pushed out its dates. The climate disclosure task force was disbanded in 2023. Any advice in this area needs a date on it. Take professional advice before acting on anything on this page. We are happy to be that adviser, but we do not act on a web page, ours or anyone else's, without one.
Two obligations that are already law
The social half of sustainability is not aspirational in India. Two bodies of law already apply.
The first is corporate social responsibility under section 135 of the Companies Act 2013. It applies where, in the immediately preceding financial year, the company met any one of three tests: net worth of ₹500 crore or more, turnover of ₹1,000 crore or more, or net profit of ₹5 crore or more. The tests are alternatives, and they reach holding and subsidiary companies and a foreign company with a branch or project office in India. The spend is at least two per cent of the average net profits of the three immediately preceding financial years, computed under section 198, or of the years actually completed where the company is younger than three years.
A committee is not always required. Under section 135(9) no committee is needed where the amount required to be spent for the year does not exceed ₹50 lakh, and the board performs its functions instead. The exemption is measured by the required expenditure, not by the thresholds that brought the company into section 135 in the first place. Where a committee is required it is three directors including one independent director; two or more where no independent director need be appointed; both directors of a two-director private company; and for a foreign company at least two persons including the authorised person under section 380(1)(d).
An ongoing project has to satisfy the definition in rule 2(1)(i), including the permitted project period and board-approved extensions.
Surplus arising from the activities cannot become business profit: it is ploughed back into the same project, moved to the Unspent account and spent under the policy and annual action plan, or transferred to a Schedule VII fund within six months after year end. Excess spend may be set off against the requirement of the next three financial years, provided it excludes surplus from the activities and the board passes a resolution approving the set-off.
On filings, the registration and the annual report are different things. An eligible implementing entity registers once in Form CSR-1 and obtains a registration number before it can act; that is not an annual return with a recurring due date, and the form was substituted with expanded information and declarations by the amendment rules G.S.R. 452(E) of 7 July 2025, effective 14 July 2025. The company's own annual report is Form CSR-2 under rule 12(1B) of the accounts rules, which from FY 2024-25 is a linked form filed with the applicable AOC-4 and therefore follows the financial-statement cycle, ordinarily within 30 days of the annual general meeting, subject to any specific extension. The transitional arrangements used for earlier years are not the permanent rule. The disclosures also go in the board's report in the prescribed format and, where applicable, on the company website.
As at 17 September 2026 no enacted amendment during 2025 or 2026 has changed the three thresholds or the ₹50 lakh committee exemption, and none was identified changing the substantive list of permitted activities in Schedule VII. The Corporate Laws (Amendment) Bill 2026 proposes a power to exempt prescribed classes of company from specified requirements, but that is a proposal and not current law and must not be relied on as an existing exemption.
The second is the four Labour Codes, which commenced on 21 November 2025 and rewrote the statutory definition of wages, extended social security to gig and platform workers with aggregator contributions, made appointment letters mandatory, and gave fixed-term employees gratuity entitlement after one year. Several of the nine core attributes report on precisely that ground, so the social pillar of a report prepared on pre-November-2025 assumptions is describing repealed law. This is dealt with properly on our payroll pages.