How does EPR work?

In a system based on individual responsibility, each producer or importer is obliged to collect waste himself or to contract a waste management company to do so as you can observe in the chart. Companies would remunerate the waste management operators for their services. Under this system, companies are supposed to know the exact amount of packaging waste they bring into the market in order to recycle it properly. As household waste consist of waste introduced by numerous companies, it is challenging to sort waste by company. After sorting, each individual company would carry out the recycling of the waste. This would be highly inefficient. That’s the reason why in most counties a collective EPR system is used.

In a collective responsibility scheme obliged companies work collaboratively to recycle waste. As indicated in the figure, a Producer Responsibility Organisation (PRO) or a system operator takes over responsibilities of each producer and importer by organising the system. Therefore, the waste is not sorted by company anymore, which saves both time and costs. The PRO would contract waste management operators and encourage consumers to take part in the recycling system. The PRO is fully financed by the obliged Producers and Importers.

 

PRO

The Producer Responsibility Organisation (PRO) becomes a central figure (see chart) in the EPR system being responsible for operating the whole system. Pros assume the responsibilities for the tasks of the companies. In this way, a circular economy can be created. PROs facilitate communication within the whole system and provides information for consumers and obliged companies. The PRO also influences the design of products as a PRO encourages participating companies to make them more environmentally friendly. Other activities which a PRO must undertake are:

A PRO needs to register all the companies, which place packaged goods on the market. This might happen in close collaboration with regulatory authorities. From those companies, a PRO receives funds for the administration of the EPR system, contracting waste management operators and other expanses that might arise. The operations of the waste management companies are documented and monitored by the PRO. In this way, a PRO can prove the fulfilment of its assigned duties to regulatory authorities and companies.

 

Structure of a PRO

A PRO may have different structure and characteristics. It can be either founded by private sector actors or by a public agency. However, industry-led PROs still need to be supervised by public authorities. Secondly, PROs can be non-profit or for-profit cooperation. The establishment of PROs for-profit helps generating competition between individuals PROs. Thirdly, PROs can be responsible for all kinds of packaging or for specific packaging e.g. plastic or glass.

 

Setting Fees of obliged companies

Commonly, the fees depend on the material and quantity of waste a company introduce to the market. There exist different strategies to set the fees of companies:

In some countries a fee per unit system is adopted, in which companies have to pay a small amount for each packaging they introduced to the market. Another approach is called a bonus/malus system. By using materials that can be easily recycled, companies receive a bonus in the form of a lower EPR fee. Conversely, for materials that are difficult or almost impossible to recycle, companies are charged a higher price. In this way, producer can be incentivised to increase the recyclability of products. In some countries, companies obtain a price reduction for labels on a product indicating information on appropriate disposal.