Extended Producer Responsibility (EPR) is linked with each company that produces plastic products. It indicates that a company’s responsibility does not end with the sale of the product. They need to ensure the proper collection and recycling of the waste. This rule applies to manufacturers, importers, and brand owners (PIBOs).
EPR target fulfilment is very important for businesses. It may cause fines, issues in licensing, and create business risks. But it is not always possible to meet the 100% target every year. Logistics problems and a lack of recycling support are often a shortfall.
The “carry-forward” rule was introduced in 2026 to reduce this pressure. It gives businesses a little relief so that they can meet the remaining target.
What has changed in the EPR rules in 2026?
The Plastic Waste Management (Amendment) Rules in 2026 give major changes to the EPR framework. Earlier, the omission of the rules in any year was considered non-compliant.
But companies now get the opportunity to meet their incomplete targets in the next few years. This new method is called carry-forward.
The government has made this change because many companies cannot meet the target on time due to supply chains, recycling capacity, and logistics problems.
However, the new rule has not been relaxed. The rule has now become more structured. Now the company must meet the target step by step within a specific time frame. This indicates that the pressure has reduced, but the responsibility is still there.
What is the Carry-Forward Rule?
Carry forward rule is a system where companies can carry their missed EPR target to the next year.
It can be called a kind of “buffer” or “insurance.” If the entire target is not met in a year, then there is an opportunity to meet a part of it in the following years.
It is just an extension of time. This rule is mainly applicable to the incomplete target of FY 2025–26.
The most important thing is to meet the target later. So, using carry-forward increases responsibility in the future.
How the 3-Year Carry-Forward System Works?
According to the new rules of 2026, companies can carry forward their incomplete EPR target for a maximum of 3 years. This period is from 2026–27 to 2028–29.
There is an important rule here, which is called the 1/3rd rule. This indicates that one-third of the total shortfall has to be met every year.
For example, suppose a company has a target of 300 tonnes left. Then it will have to be fulfilled by at least 100 tons every year for 3 years.
The table below simply shows:
| Year | Minimum to be fulfilled |
| 2026–27 | 100 tons |
| 2027–28 | 100 tons |
| 2028–29 | 100 tons |
It is important to remember-
- This rule is mandatory
- This is not an unlimited time
So, regular planning and timely work are very important here.
Important Conditions You Must Follow
Although carry-forward can be used, there are some important conditions that can cause problems if not followed. It is better to understand the issues below-
- Cumulative rule: Carry forward does not mean eliminating the new target. Along with the new target each year, part of the old deficit must also be met.
- Category-wise restriction: Credits received for one type of plastic cannot be used to meet the target of another type of plastic.
- Food-grade limitation: There are some different rules for food packaging. There may be restrictions on using recycled content.
- Tradable EPR certificates: Companies can purchase EPR certificates from other companies to meet their target deficit.
- End-of-life disposal: Plastics that cannot be recycled can be used as energy recovery or road construction.
Compliance becomes much easier if these rules are understood.
Compliance Process for Declaring Shortfall
It is very important to declare a shortfall correctly to use carry forward. Below is the step-by-step process:
- Filing on CPCB portal: First, the annual return must be submitted on the CPCB EPR portal.
- Calculating shortfall: How much target has not been met in that year has to be calculated accurately.
- Accurate declaration: No wrong information can be given. All data must be clear and correct.
- Linking with annual return: Shortfall must be mentioned in the annual return, not separately.
- Adhering to the deadline: Failure to declare within the specified time will be considered a violation.
- Non-declaration risk: If a shortfall is not declared, then it will be assumed that the company has deliberately violated the rules.
Risk of Non-Compliance and Environmental Compensation
All problems cannot be solved by just carrying them forward. Some risks remain.
- Environmental Compensation (EC): This is a penalty that must be paid if the target is not met.
- Penalty calculation: The amount of the penalty is determined by the number of missing tons of the target and the type of plastic.
- 1/3rd rule violation: If one-third of the deficit is not met every year, then it will be considered non-compliance.
- Audit: The authorities can conduct regular audits.
- Inspections: There is also a possibility of sudden inspections.
Business risks:
- EPR registration may be canceled
- Product sales may stop in the market
- Company reputation may be damaged
So, if the rules are not followed, there can be big losses in both financial and business aspects.
Why does Carry Forward help?
Carry-forward is beneficial for businesses in many ways. It saves a little time and reduces stress.
- Temporary relief: If you suddenly cannot meet the entire target, it gives you some time.
- Supply chain management: If there is a problem with logistics or recyclers, it allows you to deal with it.
- System adjustment: The company can gradually fix its internal processes.
However, there are some things to keep in mind-
The burden increases in the future, because both the old and new targets must be met
Delays can also increase costs. So, it is not right to rely on it in the long run.
Practical Strategies to Meet EPR Targets
To do EPR compliance properly, you need to do some regular work. The work becomes much easier if you follow the following points-
- Monthly monitoring: Check EPR credit every month. The problem increases when you realize a deficit at the end of the year.
- Work with CPCB-approved recyclers: Your certificate will be valid if you work only with approved recyclers.
- Use digital tracking systems: Using software for data management reduces errors, and all information is easily available.
- Third-party audits: Errors or mismatches are caught in advance by having an external audit.
- Quarterly reviews: Check the progress of the target once every 3 months. This helps to keep the planning right.
- Smart certificate trading: Buy EPR certificates, if necessary, but do not always rely on them.
- Long-term planning: It is better to plan from the beginning rather than working at the last minute.
How Corpbiz Helps Businesses Manage EPR Compliance Easily?
EPR compliance can sometimes seem complicated. Here, Corpbiz helps businesses manage the entire process easily.
EPR registration assistance: Makes the EPR registration process easier for new companies
- CPCB portal filing: Helps in filing annual returns correctly
- Credit management: Helps in maintaining EPR credit accounts and documentation
- Connection with authorized recyclers: Helps in finding the right recycler
- Carry-forward planning: Guides on how to gradually meet the shortfall
- Audit support: Helps in creating audit and compliance strategies
Corpbiz simplifies your compliance process and largely reduces the risk.
Conclusion
The carry-forward rule acts as a short-term relief tool for businesses. It gives some time so that companies can meet their unfulfilled targets.
However, it is not a permanent solution. So, it is always better to comply with time. Fines or risks can be easily avoided with proper planning, regular monitoring, and proper action.
Companies can more easily manage their EPR compliance and reduce future problems with expert support from Corpbiz. So, contact us today for better compliance.
Helpful Questions About Carry-Forward Rules for EPR Targets
What is the carry-forward rule for EPR 2026?
The carry-forward rule is a mechanism where companies have an opportunity to meet their missed EPR targets in subsequent years. As per the new rules of 2026, the shortfall of FY 2025–26 can be met later without paying a penalty directly. The company must complete the entire target within a specified period.
How many years can EPR targets be carried forward?
EPR targets can be carried forward for a maximum of 3 years as per the new rules. This period starts from 2026 to 2029. Companies must meet their remaining targets in stages during this period. It may cause penalties and other risks when failing to complete the work within the specified period.
What is the 1/3rd rule in carry-forward?
The 1/3rd rule is very simple. You have to meet one-third of your deficit every year. When there is a deficit of 300 tons. You have to produce at least 100 tons every year. This is a mandatory rule. You cannot do it all at once. You must reduce it a little every year.
Does carry-forward apply to all types of plastic?
No, it does not apply to all cases in the same way. There are different types of plastic. The deficiency of one category cannot be filled with another category. For example, rigid plastic and flexible plastic are different. In addition, there are some extra restrictions in the case of food packaging. So, you always must work by looking at the category.
What happens if I do not declare the shortfall?
Not declaring the shortfall is a serious mistake. If the shortfall is not mentioned while submitting the annual return on the CPCB portal, it can be considered a deliberate violation of the rules. This can result in fines, audits, inspections, and even cancellation of registration. So, it is important to provide accurate and complete information.
Can I meet my target using EPR certificates?
Yes, you can use EPR certificates. If your target is less, then you can meet it by purchasing a certificate from another company. These companies usually recycle more. But the certificate must be in the same category. If it is from another category, it will not be useful.
What is Environmental Compensation (EC)?
Environmental Compensation, or EC, is a financial penalty that companies must pay if they fail to meet their EPR target. It is a deterrent that companies comply with the rules. The amount of penalty depends on the number of missed targets and the type of plastic.
Does issuing an EC end the EPR obligation?
No, issuing an EC does not mean that the obligation ends. It is just a penalty, but the company must meet the rest of their target even if it is later. Many times, companies think that once they submit an EC, it is all over, but they still have to carry forward future compliance. So, it is better to avoid the EC.
How can businesses avoid EPR penalties?
Regular monitoring is very important to avoid penalties. Checking credit every month, working with a CPCB-approved recycler, and submitting annual returns on time should be done. Besides, quarterly reviews and audits reduce errors. The most important thing is to plan from the beginning and not leave it for the last minute.
How can Corpbiz help with EPR compliance?
Corpbiz helps companies manage EPR compliance. We guide you through everything from registration to CPCB portal filing, credit management, and audit support. We also help in finding authorized recyclers and carry forward planning. This helps companies comply with the rules and reduces risks.
