EPR credit trading sounds simple on paper. If you fall short, you buy credits from someone who has a surplus. But in practice, it’s a bit more nuanced. Credits can be sold, carried forward, or used to close past gaps, but only within the same category. And while buying them can solve an immediate problem, it’s not always the smartest long-term move.
How it actually works
If a company recycles or collects more than its target, it generates surplus certificates.
These can be:
- Sold
- Saved for future use
- Used to offset earlier shortfalls
But there’s a catch, everything stays within the same category. You can’t use surplus from one type of packaging to fix a gap in another.
So this isn’t a free-market shortcut. It’s a controlled system with clear boundaries. India’s EPR framework already operates as a tradable system, companies that exceed targets generate certificates that can be purchased by those falling short.
When buying credits makes sense
There are situations where buying credits is the right call.
Say you’ve got a short-term gap. Or timelines are tight. Or your reverse logistics setup isn’t fully there yet.
In those cases, credits give you breathing room.
They’re useful when:
- The gap wasn’t planned
- Supplier or material access is limited
- You simply don’t have time to build systems
Credits can buy you time. They don’t fix the underlying system.
Credits vs building your own system
This is where most teams get stuck. Building reverse logistics gives you control over cost, material flow, and compliance. But it takes time, coordination, and effort across suppliers.
Buying credits is faster. But you’re depending on the market. Most companies end up using credits early, then spend the next few cycles trying to reduce that dependence.
They use credits to stay compliant in the short term, while gradually building their own systems underneath.
The part people underestimate: price movement
Credit prices don’t stay still.
They move based on:
- Demand vs supply
- Category-specific shortages
- Regulatory pressure
So if you wait too long, you’re often buying at a higher price.
This is where things start to hurt, not because credits are expensive by default, but because decisions get delayed.
What to think through before deciding
Before you buy credits or invest in logistics, a few things matter:
- How big is the gap and how long will it last?
- Are credits even available in your category?
- What’s cheaper over time, not just today?
- Where are regulations headed?
- How strong is your supplier network?
Without this, most decisions end up reactive.
This is already showing up in India, gaps in supplier systems and data visibility are making EPR execution far less predictable than it looks on paper.
Conclusion
EPR credit trading isn’t just a compliance tool. It’s a signal. If you’re relying on it too often, it usually means something upstream isn’t fully in place yet.
At Fitsol, we work with teams to fix that early so credits become a choice, not a dependency. Because the goal isn’t just to stay compliant this year. It’s to not scramble every year after.
FAQs
What are EPR credits?
They’re certificates created when a company exceeds its recycling or collection targets. You can use them later or sell them to others who need to meet their obligations. But they’re only valid within the same category of material.
Can I use credits across different categories?
No, that flexibility doesn’t exist. Each category: plastic, paper, glass, runs separately. So surplus in one won’t help you fix a gap in another.
Should we just buy credits instead of building systems?
Not really. Credits help in the short term, especially when things don’t go as planned. But if you rely on them too much, you’re exposed to price swings and availability issues. Over time, having your own reverse logistics setup gives you far more control.
Do you see EPR credits as a smart short-term compliance tool, or do they become a risk when companies depend on them too heavily? Share your thoughts in the comments.
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