Recycling sector calls for policy support in upcoming budget

Pakistan's first multi-stakeholder packaging alliance has urged the federal government to introduce fiscal incentives and policy measures in the FY27 budget to strengthen the country's recycling sector and accelerate the transition toward a circular economy.

The CoRe Alliance said the budget presents an opportunity to support waste collection, recycling infrastructure and packaging recovery initiatives while advancing Pakistan's climate and sustainability goals.

Industry Seeks Policy Support for Recycling Sector

In a statement, Sheikh Waqar Ahmad said government support is essential to building a stronger recycling ecosystem.

"The federal budget presents a critical opportunity to advance green financing, incentivize investment in recycling infrastructure and support the formalization of waste collection systems," Ahmad said.

He added that such measures could contribute to Pakistan's climate reform agenda and complement broader environmental and sustainability initiatives that may be supported under the International Monetary Fund's Resilience and Sustainability Facility framework.

Green Financing and Tax Incentives Proposed

The alliance called for the introduction of State Bank-backed green financing programs to promote waste collection and recycling projects across the country.

Among its recommendations, CoRe Alliance proposed a five-year tax holiday for new and existing packaging recovery and recycling projects, along with tax rebates and financial incentives for companies that meet recycling targets or manufacture packaging using recycled materials.

The group also urged the government to exempt recycling equipment and related services from sales tax and customs duties and introduce a zero-tariff regime for imports of machinery used in recycling operations.

Support for Waste Collection Systems

The alliance recommended exempting waste sorting, collection and recycling services from General Sales Tax (GST) to encourage the formalization of Pakistan's largely informal waste management sector.

It also called for lower or eliminated duties on reverse vending machines used to collect plastic packaging waste and requested incentives for the development of plastic-to-fuel infrastructure.

Recycling Sector Holds Economic Potential

According to Babar Aziz Bhatti, Pakistan's recycling industry offers significant economic and environmental opportunities.

"With the right policy support and investment incentives, the country can improve recycling rates, reduce packaging waste leakage and advance a more sustainable and resource-efficient economy," Bhatti said.

Push for Circular Economy Framework

The alliance noted that it had previously shared a white paper with the Ministry of Climate Change and Environmental Coordination outlining a harmonized, phased Extended Producer Responsibility (EPR) framework for waste collection and recycling.

CoRe Alliance comprises 32 industry players, recyclers, academic institutions, non-governmental organizations, development partners and multinational companies working to reduce packaging waste and promote circular economy solutions in Pakistan.

The group said targeted budget incentives could help attract private investment, improve waste recovery rates and support Pakistan's broader environmental and climate commitments.