Thirty-three-year-old Santosh Jadhav, a rag picker from Dahisar in suburban Mumbai, has witnessed a three-fold growth in his income ever since he started collecting and sorting plastic – to be specific, post-consumer PET bottles. From a monthly income of about Rs5,000-7,000 in 2020-21, his earnings have gone up to Rs15,000-20,000 a month.
“I took up this job of picking rags from the neighbourhood at the age of 14,” says Jadhav. “And, in the last 5-7 years, I have seen a sharp surge in plastic wastes of all kinds. Initially, I was not aware of collection and sorting methods and, hence, I could barely make ends meet. But, recently a few of us from my community were trained by an NGO to sort and grade plastics of various kinds. The post-consumer polyethylene terephthalate (PET) bottles fetch a good price and collecting such rags has helped me earn better income in the last four-to-five years”.
Jadhav is not alone. There are a host of men and women from his community who have been witnessing a good uptick in their income levels, thanks to the government mandate around post-consumer PET bottles recycling.
In the world of business, one may have often heard of several rags-to-riches stories, as there are many entrepreneurs who have charted their growth journey starting from almost nothing. But, one sector that touches the entire spectrum – starting from rags to riches – is the PET recycling industry.
The recycled PET (r-PET) bottles market size was valued at $10.67 billion in 2023 and is expected to grow at a CAGR of 7.35 per cent during 2024-30, reaching nearly $17.53 billion. The industry today works with over 2 million people, who are a part of the rag picker community for collection of post-consumer PET bottles. It caters to a host of industries including food-contact packaging (beverage manufacturers), textile and fibre, among others. Hence, it works across the value chain starting from rag pickers all the way up to the manufacturers.
“Bottle-to-bottle recycling plays a crucial role in creating jobs for unskilled workers, besides generating opportunities for skilled technicians, engineers and scientists in meeting the high-quality standards required,” says Aditya Dalmia, MD, Dalmia Polypro Industries. “The r-PET flakes for bottle-to-bottle use generates a higher value as compared to that for bottle-to-fibre use. It therefore helps MRFs (material recovery facilities) and waste collectors to get higher returns in the value chain and plays a crucial role in improving the lives and livelihoods of informal workers”.
For brand owners and beverage manufacturers using r-PET helps offer some respite from fluctuations in price of PET resin, as the cost of virgin polymers, which depend upon the cost of crude oil can vary over time. But more importantly, it helps build brand loyalty, change perceptions among customers and shift customer preferences, an industry expert opined.
Growing menace of plastics
Sample this: The environmental burden of all the plastic waste ever generated is estimated to weigh close to 6.3 billion tonne – that is 20 times higher than the weight of the entire human population which is close to 316 million tonnes. Now, a PET bottle is said to take at least 450 years to completely degrade and before this happens, it usually breaks down into many tiny pieces called micro-plastics that can potentially enter our food chain.
“Recycling does not just help reduce negative environmental impacts, as new goods can be replaced by recycled goods,” says Bhadresh Dodhia, director, Dodhia group. “It also reduces the demand for raw resources, cuts down the energy used for processing compared to using virgin material, and reduces the quantity of plastic in landfill. Naturally, there is a growing affinity for using recycled material”.
Crude oil is the primary raw material for virgin PET (vPET). Recycling one tonne of PET bottles can save an estimated 16 barrels of crude oil. In 2019, India consumed about one million tonnes of virgin PET resin for making PET bottles: if 30 per cent of rPET content is achieved then, based on current consumption, the country can reduce imports of up to 5 million barrels of crude oil per year. Moreover, the use of r-PET helps lower greenhouse gas emissions besides leading to huge savings in power consumption.
“One of the biggest advantages of recycling PET is that it helps to lower emissions of common landfill gases, such as carbon dioxide and methane which can have serious impacts on ground water and air quality leading to public health problems and environmental damage,” points out Deepak Rungta, MD, Rungta Eco Extrusions. “We feel really satisfied that by recycling these PET bottles we are able to address some of these grave concerns thereby contributing to a sustainable and greener economy”.
Government interventions
With a view to address these issues and in line with the vision of ensuring circular economy, the ministry of environment, forest & climate change (MoEFCC) had, in 2022, issued guidelines on the mandatory usage of 30 per cent recycled food-grade plastic content into PET packaging bottles by beverage manufacturers, which were to come into effect from 1 April 2025. In the same year (2022-23), FSSAI came out with guidelines for recycling of post-consumer PET for food contact applications and five licences were issued and r-PET supplies have been used by brand owners since then, providing for a field validation on the use of r-PET.
Following the government regulation and sensing an urgent need to ramp up infrastructure, the industry set up a total capacity of 400,000 tonnes at an estimated investment of R7,500-8,000 crore to produce recycled polyethylene terephthalate (r-PET) for generating food-contact packaging material.
Extended producers’ responsibility (EPR) for plastic packaging under the Plastic Waste Management Rules, 2016, also requires both brand owners and packaging producers to recycle and utilise recycled material. Many FMCG companies prefer using recycled material, as this would enable them to reduce their dependence on virgin plastic and become more sustainable in the long term.
“Following regulatory guidance by MoEFCC and FSSAI in 2022 and based on the understanding that this would give a huge impetus to the demand for r-PET in packaging bottles by beverage manufacturers, industry set up capacities to meet the anticipated growth in demand,” says Shailendra Singh, director general, APR Bharat. “While a handful of them had already commenced production, of the 15-odd factories that had been commissioned, as many as six units have received final clearance from FSSAI recently to start commercial production”.
A host of companies, including Dalmia Polypro Industries, Dodhia Synthetics, Rungta Eco Extrusions, Safar Ecopet, J B Ecotex and RiBotl, among others, have already commenced commercial production of r-PET, while some others are set to start production soon on the receipt of final approval from FSSAI.
“These plants are located in different parts of the country,” adds Singh. “And, so, anybody anywhere in India would have access to some plant being able to supply them food grade r-PET. Further, I think for the rag pickers community, which is estimated to be close to 2 million in terms of numbers, this will mean extra income. Our vision is to set up 1.1 million tonnes per annum capacity by 2030 and we are well on our way there”.
The industry has a capacity of 400,000 tonnes per annum and, within the next few months another 200,000-250,000 tonnes capacity is likely to be added. Also, by the end of 2027, another 250,000 tonnes may come onstream, taking the total capacity to 700,000-900,000 tonnes by 2027. Companies have adopted state-of-the-art technology and set up their factories adhering to standards approved by the European Food Safety Authority (EFSA) and US Food and Drug Administration (FDA).
Eco-friendly practices
“We are thrilled to be at the forefront of the circular economy, offering sustainable solutions that not only address the global plastic waste crisis but also help industries adopt eco-friendly practices,” observes Prashant Khandelwal, SVP, Ganesha Ecosphere. However, despite policy push and strong intent to promote environmental sustainability, the demand for r-PET for food contact packaging has been ‘lacklustre’ so far. One of the key reasons for this is that, while it allows beverage manufacturers to build more resilient and sustainable brands, it is also expected to push up packaging costs thereby impacting margins. Several players therefore seem to be still waiting on the fence, possibly expecting some relaxation of mandate before securing their supply tie-ups for r-PET. This is clearly evident in the fact that even some of the existing players who have received FSSAI licences are unable to achieve sales due to mass non-compliance by the brands.
“Based on the clear guidelines of the government mandating up to 30 per cent use of r-PET in food contact packaging and anticipating the demand for the same we went ahead and set up our factories,” says Ayodhyaprasad Singhal, MD, JB Ecotex. “However, we have been running under capacity as brands have been trying to delay the mandate. The industry has collectively invested several crores of rupees in setting up plants and advanced machinery to meet the industry demand and promote the vision of circular economy envisaged. We request the government to create the necessary impetus and lay emphasis on the need to stick to the mandate to ensure we collectively achieve the sustainability goals, strengthen consumer trust and build and promote a more transparent and traceable ecosystem”.
“The notification mandating use of r-PET resin was issued by authorities in 2022 and, based on that, the PET bottle collection and recycling industry came forward to set up plants and collection network,” he adds. “Now, if due to any reason the mandate is delayed or postponed many companies will have to shut down operations and in future, the industry will lose confidence (in government), which will in turn impact setting up of new units for sustainable practices”.
The recycled PET manufacturing industry is making an impact across the value chain, moving from ‘rags
to riches’.