EPR: the polluter pays and decides, the environment loses

Extended Producer Responsibility (EPR) is being set up in various sectors to ensure waste reduction. The idea is good: we make the polluters pay for the environmental impact of their products, which will motivate them to adjust their business model and operate in a more environmentally friendly way. But in practice, the results are disappointing. “Companies are taking too little initiative to prevent waste and make more sustainable products. They simply pay the waste contribution,” says Janine Röling of FRF. ‘Extended producer responsibility’ now exists for a whole range of products. Think of car tyres, packaging, electronic devices, and recently also textiles in the Netherlands. It is seen as an effective way to make producers responsible for the products (and the associated waste) they produce. Thanks to a partnership between companies, municipalities, and waste managers, EPR enables the financing of waste management through a producer responsibility organisation, which often also improves efficiency. In addition, companies can potentially be encouraged to make their products more sustainable, thanks to instruments such as eco-modulation. Sounds good, right? Unfortunately, not really. Because of the way EPR legislation is set up and its often flawed implementation, the potential of EPR is heavily underutilised and producers are not held sufficiently responsible for the environmental damage they cause. We previously wrote about how things are going wrong with the governance of EPR and how EPR for textiles must not make the same mistakes. In our latest EPR position paper, written together with Minderoo and with the support of a broad coalition, we identify exactly where things go wrong and how ambitious policy can rectify these mistakes. EPR in practice While EPR has been fairly successful in managing the end-of-life stages of products (better separate collection and recycling), it has not been effective in significantly altering the entire life cycle of products, i.e. creating more sustainable products and preventing waste. In a context where ten Member States risk missing the recycling targets for both municipal waste and packaging waste, and packaging waste is only increasing, it is important that we re-evaluate existing policy. Policymakers must realise that the global waste crisis goes beyond just a focus on waste management. Efforts must be focused on the right policy frameworks that enable and encourage less production (prevention) and reuse. In this perspective, the European Union should maximise the environmental effectiveness of EPR by addressing current shortcomings and establishing a more ambitious policy framework for EPR. Time for action concrete recommendations In light of the ongoing revisions of the Packaging and Packaging Waste Regulation and the Waste Framework Directive, it is high time for action. To make EPR a more effective tool for the circular economy, we propose a number of concrete legislative measures: Strengthen governance to improve transparency. To address the concentration of market power among producer responsibility organisations (PROs), all stakeholders (including consumers, environmental organisations, and waste management companies) must be part of the governance structure. In doing so, we separate strategic responsibility from operational responsibility. Redefine the mission of producer responsibility organisations to go beyond waste management. We call on EU legislators to ensure that PROs cover the full costs, thereby correctly applying the ‘polluter pays’ principle. Municipalities are currently not fully compensated for the collection and processing of products covered by EPR. Which means that municipalities, and therefore the taxpayer, foot the bill. Ensure harmonised eco-modulation. Eco-modulation (differentiation in waste management fees based on, for example, the materials used or the degree of recyclability) has an important role to play in steering towards more sustainable products. We must ensure a harmonised tariff structure in accordance with the principles of the waste hierarchy, prioritising prevention, reusability, and recyclability, and avoiding undesired side effects as much as possible. Tackle ‘free riding’ (especially in e-commerce). It is crucial that EU legislators ensure a level playing field, including for imported goods sold online. Online platforms must ensure that the traders they host comply with EPR rules. Enforcement for non-EU retailers selling directly to EU consumers must be increased, with the possibility of banning their products from the European market if they fail to do so. Recognise mandatory deposit return systems (DRS) as part of EPR policy: DRS has proven to be effe

Extended Producer Responsibility (EPR) is being set up in various sectors to ensure waste reduction. The idea is good: we make the polluters pay for the environmental impact of their products, which will motivate them to adjust their business model and operate in a more environmentally friendly way. But in practice, the results are disappointing. “Companies are taking too little initiative to prevent waste and make more sustainable products. They simply pay the waste contribution,” says Janine Röling of FRF.

‘Extended producer responsibility’ now exists for a whole range of products. Think of car tyres, packaging, electronic devices, and recently also textiles in the Netherlands. It is seen as an effective way to make producers responsible for the products (and the associated waste) they produce. Thanks to a partnership between companies, municipalities, and waste managers, EPR enables the financing of waste management through a producer responsibility organisation, which often also improves efficiency. In addition, companies can potentially be encouraged to make their products more sustainable, thanks to instruments such as eco-modulation.

Sounds good, right? Unfortunately, not really. Because of the way EPR legislation is set up and its often flawed implementation, the potential of EPR is heavily underutilised and producers are not held sufficiently responsible for the environmental damage they cause. We previously wrote how things go wrong with the governance of EPR and how EPR for textiles must not make the same mistakes.

In our latest EPR position paper, written together with Minderoo and with the support of a broad coalition, we identify exactly where things go wrong and how ambitious policy can rectify these mistakes.

EPR in practice

While EPR has been fairly successful in managing the end-of-life stages of products (better separate collection and recycling), it has not been effective in significantly altering the entire life cycle of products, i.e. creating more sustainable products and preventing waste.

In a context where ten Member States risk missing the recycling targets for both municipal waste and packaging waste, and packaging waste is only increasing, it is important that we re-evaluate existing policy. Policymakers must realise that the global waste crisis goes beyond just a focus on waste management. Efforts must be focused on the right policy frameworks that enable and encourage less production (prevention) and reuse. In this perspective, the European Union should maximise the environmental effectiveness of EPR by addressing current shortcomings and establishing a more ambitious policy framework for EPR.

Time for action: concrete recommendations

In light of the ongoing revisions of the Packaging and Packaging Waste Regulation and the Waste Framework Directive, it is high time for action.

To make EPR a more effective tool for the circular economy, we propose a number of concrete legislative measures:

Strengthen governance to improve transparency. To address the concentration of market power among producer responsibility organisations (PROs), all stakeholders (including consumers, environmental organisations, and waste management companies) must be part of the governance structure. In doing so, we separate strategic responsibility from operational responsibility.

Redefine the mission of producer responsibility organisations to go beyond waste management. We call on EU legislators to ensure that PROs cover the full costs, thereby correctly applying the ‘polluter pays’ principle. Municipalities are currently not fully compensated for the collection and processing of products covered by EPR. Which means that municipalities, and therefore the taxpayer, foot the bill.

Ensure harmonised eco-modulation. Eco-modulation (differentiation in waste management fees based on, for example, the materials used or the degree of recyclability) has an important role to play in steering towards more sustainable products. We must ensure a harmonised tariff structure in accordance with the principles of the waste hierarchy, prioritising prevention, reusability, and recyclability, and avoiding undesired side effects as much as possible.

Tackle ‘free riding’ (especially in e-commerce). It is crucial that EU legislators ensure a level playing field, including for imported goods sold online. Online platforms must ensure that the traders they host comply with EPR rules. Enforcement for non-EU retailers selling directly to EU consumers must be increased, with the possibility of banning their products from the European market if they fail to do so.

Recognise mandatory deposit return systems (DRS) as part of EPR policy: DRS has proven to be effective in increasing collection rates and reducing litter. We believe that DRS is therefore a crucial tool for well-functioning EPR schemes.

Combine the potential of EPR with other economic policies: EPR can help internalise the environmental costs of products and incentivise producers to design more sustainable products and waste management systems. However, EPR alone is not enough for the transition to a circular economy. Fiscal instruments, such as lower VAT rates on products made from recycled materials and higher rates on virgin raw materials, can also reduce the demand for resources. By making repair, reuse, and high-quality recycling more fiscally attractive, we can also promote circularity. The EU can play a key role in harmonising fiscal instruments and setting minimum tax rates for virgin raw materials. This would help create a level playing field for businesses and consumers across Europe.

You can read the full report here.

Do you have questions about this topic? Please contact Janine Röling j.roling@fairresourcefoundation.org