CoRe Alliance seeks green financing, tax incentives for recycling sector in Budget 2026-27

Pakistan’s first multi-stakeholder packaging alliance, CoRe (Collect and Recycle), has urged the federal government to introduce a range of fiscal and policy measures in the Budget 2026-27 to strengthen waste collection, recycling infrastructure and circular economy initiatives, saying the measures would support Pakistan’s climate reform agenda and create green jobs.

In its budget recommendations, CoRe Alliance called for green financing through the State Bank of Pakistan, a five-year tax holiday for new and existing collection and recycling projects, tax rebates for companies achieving recycling targets, exemptions on taxes and duties for recycling equipment, GST relief for recycling services, lower duties on Reverse Vending Machines and incentives for plastic-to-fuel infrastructure.

Sheikh Waqar Ahmad, CEO and Founding Director of CoRe Alliance, said the federal budget presented a critical opportunity to advance green financing, encourage investment in recycling infrastructure and support the formalisation of waste collection systems.

“The federal budget presents a critical opportunity to advance green financing, incentivise investment in recycling infrastructure, and support the formalisation of waste collection systems. These measures can contribute significantly to Pakistan’s climate reform agenda and complement broader policy reforms that may be supported through the Resilience and Sustainability Facility under the Staff-Level Agreement with the International Monetary Fund,” he said.

The alliance noted that modern life, shaped by advances in technology, healthcare, food security and global connectivity, has been made possible in large part through the development of plastics, including packaging. However, it said the resulting growth in plastic waste has created environmental, health and social challenges that require coordinated action.

According to CoRe Alliance, transitioning towards a circular economy requires substantial public investment in formal waste collection and recycling systems. It said the government has a key role in establishing an effective policy framework and creating an enabling environment for sustainable and innovative waste management practices.

The alliance said the annual budget offered an opportunity to introduce financial measures aimed at building a resilient circular economy while promoting green employment and sustainable waste management solutions.

Among its recommendations, CoRe called for the availability of green financing by the State Bank of Pakistan to promote waste collection and recycling, a five-year tax holiday for new and existing collection and recycling projects, referred to as Packaging Recovery Organisations, across multiple cities in Pakistan, and tax rebates or financial incentives for companies that achieve recycling targets or manufacture packaging from recycled materials.

The alliance also proposed exemption of sales tax and customs duty, along with a zero-tariff regime, on the import of equipment for recycling projects. It further sought exemption of General Sales Tax on waste sorting, collection and recycling services to help formalise the informal sector involved in waste management.

Additional recommendations included abolishing or reducing duties on Reverse Vending Machines used for collecting plastic packaging waste and introducing incentives for the development of plastic-to-fuel industry and infrastructure.

Babar Aziz Bhatti, Chairperson of CoRe Alliance’s Extended Producer Responsibility (EPR) Committee and CEO of Green Earth Recycling, said Pakistan’s recycling sector has significant economic and environmental potential.

“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,” he said.

The alliance stated that the proposed measures would contribute to Pakistan’s climate reform agenda and support reforms that could be backed under a possible arrangement through the Resilience and Sustainability Facility as part of the IMF Staff-Level Agreement.

Earlier this year, CoRe Alliance shared a white paper on a harmonised and phased Extended Producer Responsibility framework for collection and recycling in Pakistan with the Ministry of Climate Change and Environmental Coordination.

CoRe Alliance said it was established by leading industry players, packaging companies, recyclers and non-governmental organisations to eliminate packaging waste through collective action and promote a circular economy in Pakistan.

The alliance currently comprises 32 organisations, including Akhter Hameed Khan Foundation, Bank Alfalah, Circular Plastics Institute, The Coca-Cola Company, Ecolean, English Biscuit Manufacturers (Pvt.) Ltd., Engro Polymer & Chemicals, Five Star Polymers Ltd., FrieslandCampina, Green Earth Recycling, Gilgit-Baltistan Waste Management Company, IPAK, Jazz, Lahore University of Management Sciences (LUMS), Lucky Core Industries Limited, McDonald’s, METRO, Mondelēz Pakistan Limited, National Foods Limited, Nestlé Pakistan, Novatex, Packages, PARCO, PepsiCo, PARCO Gunvor, Sustainable Development Policy Institute (SDPI), SPEL, Tetra Pak, Unilever, the United Nations Development Programme (UNDP), Wafi Energy Pakistan Limited and WWF-Pakistan.