Parveen Arora and Ishaan Chopra
Battery waste management is a critical environmental concern in India. The rapid growth of technology and consumer electronics has led to a significant increase in battery usage and subsequent waste generation. Effective management of this waste is essential to prevent environmental pollution and ensure the sustainable use of resources.
The usual practice in India to dispose of small (household) batteries is to throw them in the household dustbin along with other waste. The need for separate treatment or segregation of this domestic hazardous waste at the household level is almost nil. In the absence of any proper collection, disposal mechanism, or recycling infrastructure, these waste batteries are currently ending up in landfills. Additionally, with the exponential growth of Electric Vehicles (EVs) and Battery Energy Storage (BES) systems, the problem is becoming grave. To tackle the issue and to make specific processes for disposing of batteries, the government has introduced specific rules to manage batteries at the end of their life.
Regulatory Landscape:
The Ministry of Environment, Forest, and Climate Change introduced the Battery Waste Management Rules, 2022 (“BWMR”), replacing the Batteries (Management and Handling) Rules, 2001 (“Rules 2001”). These rules guide the channelisation of depleting resources towards refurbishment or recycling. They apply to all types of batteries regardless of their shape, volume, chemistry, usage, and material composition.
Applicability:
BWMR applies to everyone (i.e., producers, dealers, consumers, entities involved in collection, segregation, transportation, refurbishment, and recycling) involved in the lifecycle of a battery, from the entity that makes it to the person who uses it, and to all types of batteries.
Responsibility:
A. Consumer: Under BWMR, a consumer is the end-user of the battery; and as per Rule 5 of BWMR, a consumer is responsible for:
Separate Disposal: Ensuring that waste batteries are discarded separately from other waste streams, particularly mixed waste and domestic waste.
Environmentally Friendly Disposal: Ensuring that waste batteries are disposed of in an environmentally friendly manner by transferring them to entities engaged in collection, refurbishment, or recycling.
B. Producer: Under BWMR, a producer is defined as an entity involved in any of the following activities:
Manufacturing and selling batteries, including refurbished ones, under one’s own brand.
Selling batteries, including refurbished ones, under one’s own brand, which other manufacturers or suppliers produce.
Importing batteries or equipment containing batteries.
Manufacturing or assembling batteries, including refurbished ones, for sale to another producer, without using one’s own brand name.
As per Rule 4 of BWMR, a producer is responsible for ensuring the disposal and recycling of waste batteries in compliance with their Extended Producer Responsibility (“EPR”) requirements. Additionally, importers of batteries or equipment containing batteries are classified as 'Producer' and will also be required to comply with EPR as outlined in Rule 4 of BWMR.
Extended Producer Responsibility:
As per BWMR, a producer shall have the obligation of EPR for the battery they introduce in the market and the producer shall meet the collection and recycling targets as given in Schedule II of BWMR to ensure the attainment of EPR obligations.
In this regard, Rule 4 of BWMR outlines the battery producers’ obligations as under:
Battery producers manage safe disposal/recycling, facilitating customer returns.
Submit an EPR plan detailing battery management while meeting recycling goals.
Regulations mandate collection centres/partnerships for disposal.
Conduct consumer education campaigns on proper batter disposal/recycling.
Targets for EPR: EPR targets for producers are tailored to the specific types of batteries listed in Schedule II of BWMR. The compliance cycle for these targets is outlined as follows:
Further, Battery Waste Management (Second Amendment) Rules 2024, as notified on June 20, 2024, prescribes the minimum use of recycled materials out of total dry weight of battery (in percentage) in respect of financial year 2027-28, 2028-29, 2029-30 and year 2030-31 onward for portable, electric vehicle, automotive and industrial batteries respectively.
C. Refurbisher and Recycler: According to BWMR, refurbishers and recyclers are required to register with the relevant State Pollution Control Board (“SPCB”) through the online centralized portal developed by the Central Pollution Control Board (“CPCB”). They must ensure compliance with the guidelines issued by CPCB and other existing waste management laws, such as the Plastic Waste Management Rules of 2016, Solid Waste Management Rules of 2016, and Hazardous and Other Wastes (Management & Transboundary Movement) Rules of 2016.
BWMR also mandates that refurbishers and recyclers submit quarterly returns in prescribed formats, detailing the waste batteries collected or received from various producers, the quantities refurbished or recycled, and the quantities of hazardous, solid, plastic, or other wastes generated after refurbishment or recycling. Additionally, recyclers are required to meet minimum recovery targets for battery materials, as specified in BWMR. These targets vary based on the type of battery, such as portable, automotive, industrial, or electric vehicle batteries.
Environmental Compensation:
Under BWMR, Environmental Compensation (“EC”) is a financial penalty imposed on entities for non-compliance with the rules, based on the polluter pays principle. In September 2024, CPCB issued ‘Guidelines for imposition of EC under BWMR’. As per the guidelines, the calculation of EC is now divided into two regimes:
EC Regime 1: It applies specifically to producers for non-fulfilment of metal-wise EPR targets. This regime is further divided into two categories based on the type of batteries: lead acid batteries and lithium-ion & other batteries. For both types, the calculation of EC includes the cost of handling, collection, transportation, and processing of waste batteries. These costs are determined based on the specific requirements and technologies associated with each type of battery, reflecting the different challenges and expenses involved in their recycling.
EC Regime 2: It is a broader category that applies to any entity, including producers, recyclers, and refurbishers, for non-compliance of BWMR, other than the shortfall in EPR targets (discussed below). The EC in this regime is calculated as follows: 1. First Default: A penalty of INR 20,000 is imposed, which is equivalent to the application fee for registration under the BWMR.
2. Second Default: The penalty doubles to INR 40,000. 3. Third Default: The penalty escalates further to INR 80,000.
Additionally, the EC cost in this regime increases by 10% every year, creating a progressive penalty structure to encourage compliance.
These tiered penalties are intended to discourage non-compliance by imposing increasingly steep financial penalties for repeated violations. Further, entities found violating the BWMR must deposit their EC and financial penalties within a specified time frame. If payment is delayed, penalties will increase as outlined below, in the case of:
Delayed deposits made within one month of the deadline will incur 12 (twelve) per cent annual interest on the original amount.
Deposits made after one month but within three months are subject to 24 (twenty-four) per cent annual interest.
If payments are delayed beyond three months, the government will impose stricter sanctions, including closing the unit, seizing trade documents, and taking further legal action under Section 15 of the Environmental (Protection) Act of 1986.
Shortfall of EPR Targets: As per Rule 13(4) of BWMR, when there is a shortfall in EPR targets, the producer is liable to pay EC as per EC Regime 1, but payment of EC alone would not absolve the producer of its EPR obligations. The unfulfilled EPR obligation for a particular year is carried forward to the next year for three years. If the shortfall is addressed within this period, the producer is eligible for a partial refund of the EC paid, with the percentage of refund decreasing as the time taken to fulfil the obligation increases. Specifically, within one year of levying the EC, 75% is returned; within two years, 60% is returned; and within three years, 40% is returned. After three years, the entire EC amount is forfeited and utilized for the collection and refurbishment or recycling of waste batteries.
Conclusion
In conclusion, BWMR aim to promote a circular economy for battery recycling in India. However, there is concern about producers underpaying for recycling, which could harm sustainability efforts and allow fake recyclers to thrive. Currently, the EPR floor price is too low, risking environmental damage and economic losses. The government is considering setting a higher EPR floor price[1], but there are concerns about its adequacy. India's pricing is lower than international standards, and without a fair EPR floor price, the country's sustainability goals could be jeopardized. Despite the potential impact on consumers being minimal, a higher EPR floor price is essential for responsible recycling and meeting India's environmental targets. The decisions made now will determine India's environmental and economic future, and it is imperative that the government acts to ensure a sustainable battery ecosystem.
Moreover, producers play a vital role in this ecosystem, and it is essential for them to meet their respective EPR targets. As non-compliance with the BWMR can result in significant penalties. Furthermore, their commitment to fair and responsible recycling practices is also crucial for the success of the BWMR.
[1] ‘Battery waste rules under scrutiny: Calls for higher EPR floor price grow louder’, Economic Times dated October 3, 2024.