Author- Rasika Ganame
Senior Sustainability Analyst, Adyra ESG Technologies
MBA Energy Management| MSc Climate Change and Sustainability studies
Preview of Packaging Material Sustainability Research Report (February 2026)
For years, recycled plastic has been seen as the obvious solution to the plastic waste problem. It promises lower environmental impact, supports circularity, and, at least in theory, costs less than alternatives. As a result, brands across India’s packaging and consumer goods sectors are rapidly increasing their use of recycled PET and HDPE.
But as India’s plastic regulations tighten, a new reality is emerging: plastic is no longer automatically the most affordable choice.
This shift has less to do with ideology and more to do with the growing cost of compliance under Extended Producer Responsibility (EPR), which is expected to increase further as enforcement tightens.
Why Recycled Plastic Is No Longer Automatically the Cheapest Option
When companies compare packaging options, the discussion often starts and ends with one question: How much does the material cost per kilogram?
By that measure:
● Virgin plastic usually looks cheap
● Recycled plastic looks slightly more expensive
● Alternative materials often look unaffordable
However, this comparison does not account for intrinsic costs arising from evolving regulations and compliance requirements. Most packaging decisions still begin with a simple comparison of material prices per kilogram, a method that increasingly misrepresents true FMCG packaging cost comparisons in India.
Why Per-Kilogram Resin Pricing Is No Longer Enough
A full unit cost comparison typically includes:
● Material procurement
● Manufacturing and energy use
● Logistics and handling
● EPR compliance costs
● Exposure to price and supply volatility
When these elements are considered together, a different picture starts to emerge. Virgin plastic may look cheap at the factory gate, but it now carries high and increasing EPR costs. Recycled plastic reduces some compliance pressure, but faces supply shortages, quality limitations, and price premiums. Alternative materials, while sometimes more expensive upfront, often sit outside recycled content mandates and therefore face lower regulatory cost exposure along with lower emissions.
Based on unit-level cost analysis across common packaging formats, the relative picture increasingly looks like this:
Table 1: How EPR Compliance Is Reshaping Packaging Economics in India
| Packaging option | Material cost | EPR cost impact | Overall cost pressure |
|---|---|---|---|
| Virgin plastic | Low | High and rising | Increasing |
| Recycled plastic (rPET / rHDPE) | Medium | Low to medium | Medium- High |
| Alternative materials | Medium-High | Low or none | Competitive |
This does not mean that alternatives are always cheaper. It does mean that the cost gap is narrowing, and in some cases reversing, especially where EPR costs are high. As EPR costs rise, most companies assume that paying for certificates equals compliance and that compliance equals real recycling. India’s EPR system largely relies on certificates issued by registered recyclers and processors. For brand owners, this often becomes a transactional exercise: purchase certificates, file returns, and move on. What remains largely invisible is what happens on the ground.
Understanding Total Unit Cost in Packaging Decisions
To make this more concrete, consider total unit costs for multilayer plastic (MLP) used in everyday FMCG packaging applications.
Scenario: This comparison reflects typical FMCG applications such as sachets, pouches, wrappers, and short-life consumer packaging, where material recovery rates and compliance costs differ significantly by material type.
Option compared- For an FMCG company with 500-ton annual plastic packaging obligation, three options are considered: Multilayered Plastic, Recycled Plastic, Fibre-based Packaging *.
*For brands evaluating similar packaging formats, unit-level a outcomes can vary widely based on product design, volumes, and compliance pathways. A product-specific assessment is often the only way to understand true EPR exposure and cost risk. The example used in this blog are illustrative, for custom made analysis reach out to us at info@adyraesgtechnologies.com
| Cost element | Multi-layer plastic | Recycled plastic | Fibre-based packaging |
|---|---|---|---|
| Total Cost(Lakhs) | 550 | 320 | 300 |
| Compliance Cost(Lakhs) | ~40 | 0 to low | 0 |
| Material & conversion | Low | Not viable at scale | Medium |
| EPR compliance | Very high | Medium | Low |
| Recycling feasibility | Poor | Limited | High |
| Total cost pressure | Very high | Moderate | Moderate |
The total cost pressure differs less because of material price and more because of what happens after the packaging is placed on the market. Multilayer plastic faces the highest EPR burden due to poor recycling outcomes and heavy reliance on certificates. Recycled plastic reduces compliance pressure but remains constrained by limited supply, quality variability, and price premiums. Fibre-based materials, by contrast, often benefit from higher recovery rates and lower compliance exposure, resulting in more stable overall costs.
Why Recycled Plastic Faces Structural and Supply Limits
None of this suggests that recycled plastic is a bad solution. On the contrary, recycling remains essential. However, the quality degrades with each recycling cycle, often requiring virgin blending. Most importantly, existing PET and HDPE recycling systems do not work for flexible films and multilayer packaging.
As demand for recycled content rises across packaging, textiles and consumer goods, supply is struggling to keep up. That imbalance is now showing up in both price and availability.
Where Packaging Materials Begin to Make Economic Sense
This is where alternative materials deserve a more serious look, not as a silver bullet, but as part of a broader material strategy.
Fibre-based packaging, paper with functional coatings, molded pulp, compostable plastics and certain bio-based materials already operate at a commercial scale. Many are compatible with existing waste systems or fall outside recycled content obligations altogether.
When EPR costs are included, these materials can become cost-competitive, particularly for:
● Food service and food-soiled packaging
● Secondary and protective packaging
● Short-life consumer product packaging
● Applications where recycling has consistently failed
In these cases, alternatives are not just an environmental choice but are a risk management and cost stability choice.
What this means for brands and consumers
The key takeaway is not that companies should abandon recycled plastic. It is that material decisions based only on resin price are no longer sufficient.
As regulations mature, the most resilient packaging strategies will be those that:
● Look at the total unit cost, not just the material cost
● Account for EPR exposure and future mandate tightening
● Supply Demand Analysis in the long term
● Diversify material choices rather than relying on a single compliance pathway
For policymakers, this reinforces the need to support multiple solutions such as recycling, alternatives, reuse and design reduction rather than assuming recycled content alone can solve the problem.
Looking Ahead: Choosing Packaging for Compliance and Cost Stability
India’s plastic regulations are doing exactly what they were intended to do: forcing a rethink of how packaging is designed, priced and managed. As EPR compliance increasingly relies on certificates, a major gap remains in verification. Many PIBOs and even registered recyclers have limited visibility into whether certificates align with actual material flows, product footprints, or end-use outcomes. Without this visibility, brands are increasingly exposed to compliance risk, cost volatility, and future regulatory scrutiny.
The question facing businesses is no longer “Which material is cheapest today?” It is “Which option delivers compliance, stability and scalability at the lowest total cost over time?”
Increasingly, the answer will not be recycled plastic alone. Building on this analysis, an upcoming report will take a deeper look at India’s circular plastic infrastructure. The aim is to identify where structural gaps continue to undermine cost efficiency and environmental impact.
The scenarios discussed here are illustrative. Actual cost and compliance outcomes vary significantly by packaging format, material structure, volumes, and EPR strategy. If you are assessing packaging changes or facing rising EPR exposure, a custom product-level analysis can provide clearer visibility into cost, compliance risk, and material trade-offs. You can reach us at info@adyraesgtechnologies.com
NEED CUSTOM ANALYSIS SOONER?
If your packaging decisions can’t wait for the full report, we provide:
- Product-level packaging sustainability assessment
- Total cost analysis (material + EPR compliance + risk exposure)
- EPR compliance verification (ISO 14064-3 certified)
- Material transition strategy and implementation support
Contact: info@adyraesgtechnologies.com
Schedule consultation: www.adyraesgtechnologies.com/contact-us/
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