What is EPR?

The Extended Producer Responsibility (EPR) is an important instrument for achieving a circular economy. A circular economy is a sustainable production and consumption system in which the product life cycle is extended by reusing and recycling the material. By applying this system, waste is reduced to a minimum. In comparison to that, EPR holds the manufacturer or the importer of goods responsible for the entire life cycle of the product and the packaging, which includes the collection, the sorting and the recycling of packaged goods. The producer bears the financial responsibility as well as the responsibility for any environmental impact of the product. Currently, packaging, waste from electrical and electronic equipment (WEEE), packaging, tyres and car batteries are the most common products in an EPR system.

In the traditional model or linear model, products are produced, used and then without any further processing disposed of on landfills. This system would consume a very large amount of raw material and the non-recycled waste would have a major negative impact on our environment. With an EPR, however, this system can be changed. In practice, as you can see in the chart, EPR means that the packaging is collected and transported to a sorting facility. From there, the sorted waste is then taken to a recycling plant. Thanks to recycling, it is possible to make new products from material that has already been used. In this way, a circular economy can be achieved. However, some of the material is lost during the recycling process that’s the reason why new material need to be fed into the circuit.

In practice, EPR means that for instance household waste is...

 

Benefits of an EPR system

An EPR system offers numerous benefits for the environment and the economy. Hence, it enhances social well-being. Instead of using precious virgin materials, it leads to an increase in reusing and recycling of otherwise wasted resources. It is an important driver within the circular economy to make this cycle sustainable. The implementation of the EPR system creates new jobs in the recycling sector. Due to the “Polluter pays”-Principle, the burden of financing the waste management system will be transferred from the municipalities and taxpayers to companies. This encourages companies to make their products more environmentally friendly and thereby decreasing their ecological impact. Furthermore, the organisation of an EPR system and the redesign of products increases the collaboration along the whole value chain. Moreover, ensuring sound management of waste, especially hazardous materials, lowers the likelihood of environmental contamination and health risks.

 

EPR systems worldwide

Due to various advantages, the worldwide number of EPR systems has increased progressively in recent years. A large number of countries have implemented an EPR schemes, which either follow a mandatory or a voluntary approach.

The challenge of voluntary EPR schemes is their limited scope because companies have to freedom to not take part. Such systems have no legal framework to ensure compliance and the funding depends on the voluntary contributions from members. In comparison, a mandatory system is able to ensure compliance of obliged companies and can be financed sustainably due to mandatory financial contributions to the system. Moreover, it creates the possibility to install a collection system for all packaging materials.

 

Types of EPR instruments:

The majority of the mandatory EPR systems oblige companies to take back their products at the end of the product-lifecycle. In addition, the recycling of the products may be obligatory. In some countries economic instruments are used. Examples are deposit refund systems (DRS) or advance disposal fees (ADF). In a DRS the consumer pays a deposit when buying a product. After returning the packaging, the deposit is reimbursed to the consumer. An additional mechanism is an advance disposal fee, which is paid by the customer at the purchasing point in order to cover the estimated costs for collection and recycling. Furthermore, legal requirements, such as a minimum share of recycled material in new products, can be implemented to enhance EPR. Informing consumers and producers about EPR can increase the willingness to participate in the EPR system.

 

Country example: Germany

In 1991, the first mandatory EPR system in Germany was established. At that time, the Packaging Ordinance (Verpackungsverordnung) was a unique legislation worldwide. Ever since, the specifications of the legislation have been altered and optimised. The Dual System Germany (DSD) was operating as a single non-profit packaging recovery organization (PRO). Companies, which participated in the EPR system, were allowed to print the “Green Dot” on their products. Initially, a per unit fee system for the determination of the companies’ fees was used. Later, due to its economic inefficiency, it was changed into a fee system based on weight and type of material. Moreover, at that time a specific company was in charge for the recycling of a specific material e.g., the company the German Society for the Circular Economy and Raw Materials (DKR GmbH) was responsible for plastic packaging. As most of the recycling companies and the DSD enjoyed a monopoly position in the market, the German competition authorities eventually broke up their dominant position. In 2003, due to the pressure from the federal cartel office the system was changed from to a single non-profit PRO to a system with several competing for-profit PROs. In the same year a deposit-refund system for single use beverage bottles was introduced. The last amendment to the law was adopted in 2017 and came into force in 2019. The new packaging act (VerpackungsG) introduced new elements to the German EPR system: A central agency is responsible for the registration of all obliged companies, which decreases the possibility of free-riders and the agency monitors compliance with the regulations. Thus, recycling targets increased. In the previous Packaging Ordinance, 75% of all glass materials were required to be recycled, which was increased to 80% in the Packaging Act in 2019. In 2022, the targets will be raised again. In the case of glass materials, the target will increase to 90%.

Depending on the system type, different actors are engaged in carrying out the EPR system. The central figure are the producers and importers, who introduce packaged goods to a market. Those are obliged to collect and recycle the products themselves or contract a third party to take over these responsibilities. Moreover, those can influence the design and composition of packaging. This third party might be a waste management operator or a company in the informal sector, which collects and recycles waste at the highest possible standard. A further important actor in an EPR system are the consumers given the responsibility to dispose and separate the waste correctly, which is crucial for a well-functioning EPR system. They can be incentivised to separate their waste by implementing awareness campaigns, educating people or a user-friendly collection system. National governments are responsible for the legislation and supervision of a mandatory EPR system. Another important actor in the EPR system are municipalities, which can facilitate the communications between consumers and waste management operators.