Recycling Netwerk is conducting research into the governance of EPR systems

Much is expected from Extended Producer Responsibility systems for making product chains more sustainable. Producer responsibility, as also laid down in European waste legislation, is intended to reduce the environmental impact of products over their life cycle. But at the same time, the organisations that legally implement this are fully funded by the business community and also act as advocates on behalf of the business community. Recycling Netwerk has therefore started an investigation to, among other things, gain more insight into the way in which organisations in which producers unite (PROs) function and how governments relate to them.

Extended Producer Responsibility (EPR) embodies the idea that producers are responsible for the entire life cycle of their products. The concept of Extended Producer Responsibility was conceived in 1990 by the Swede Thomas Lindhqvist with the aim of reducing the environmental impact of products. He writes: "EPR should be seen as a principle for preventive environmental policymaking. The main emphasis of EPR is to stimulate product and product system improvements." In the European Union and its member states, the concept of EPR has been developed into a package of administrative, financial and informative policy instruments. The most common EPR policy instruments are collection and recycling targets, levies in the consumer price (for example, a contribution set by the producer for waste treatment) and deposit return schemes. This obliges producers to meet certain government-mandated requirements for their products regarding the end of the product chain. By governments, environmental organisations, and producers alike, the idea of EPR is seen as a good set of tools to limit the environmental impact of products. However, it has become clear that EPR systems in their current form are not yet capable of living up to the expectations of a positive environmental impact.

What does EPR mean in practice?

In most cases, producers choose a collective form of EPR by joining together in so-called producer responsibility organisations (PROs). Various PROs representing different product groups of packaging, batteries, and car tyres are also active in the Netherlands and Belgium. These PROs ensure that statutory EPR obligations are met by organising the collection and treatment of a specific waste stream, such as packaging waste. One of the most important tasks of a PRO is therefore the organisation of logistical chains. By working together in a collective, economies of scale in logistics are possible and it is more difficult for producers to evade their responsibility (also called free riding).

PROs are usually non-profit foundations, to which the various participating producers pay a financial contribution. The level of the contribution in the Netherlands and Belgium is determined by the PROs themselves. In many cases, modulated waste management fees are used, by offsetting the net costs of treatment and administration against what the recycled material yields. With the proceeds, the PRO ensures that the collection and recycling targets are met. It may be that a producer makes changes to the design of a product in order to reduce its environmental impact. This is also called Design for Environment (DfE). By rewarding producers for this through a lower waste management fee, they could be encouraged to make their products more sustainable.

For product groups to which EPR applies via legislation, there is mainly an obligation regarding cost recovery for collection and recycling (based on the set recycling targets), facilitating separate collection and reporting reliable data in the area of waste management. The legislator plays an important role in this. For packaging, car tyres, electrical appliances, batteries and other product groups, the legislator sets targets and obligations for more sustainable management of the waste phase. Recycling targets are often at the heart of the agreements made. We see only limited legislation in Europe that helps to make products more sustainable when it comes to the use of raw materials. Hardly any effort is made to increase sustainability with a focus on the front end of the product chain and the systems in which products function, as Ecologic already concluded in earlier research. In practice, EPR therefore rarely and very limitedly drives changes in design and production processes, whilst this is precisely where, to a significant extent, the sustainability of the product and the system in which it functions is determined. The question is also

Much is expected from Extended Producer Responsibility systems for making product chains more sustainable. Producer responsibility, as also laid down in European waste legislation, is intended to reduce the environmental impact of products over their life cycle. But at the same time, the organisations that legally implement this are fully funded by the business community and also act as advocates on behalf of the business community. Recycling Netwerk has therefore started an investigation to, among other things, gain more insight into the way in which organisations in which producers unite (PROs) function and how governments relate to them.

Extended Producer Responsibility (EPR) embodies the idea that producers are responsible for the entire life cycle of their products. The concept of Extended Producer Responsibility was conceived in 1990 by the Swede Thomas Lindhqvist with the aim of reducing the environmental impact of products. He writes: "EPR should be seen as a principle for preventive environmental policymaking. The main emphasis of EPR is to stimulate product and product system improvements." In the European Union and its member states, the concept of EPR has been developed into a package of administrative, financial and informative policy instruments. The most common EPR policy instruments are collection and recycling targets, levies in the consumer price (for example, a contribution set by the producer for waste treatment) and deposit return schemes. This obliges producers to meet certain government-mandated requirements for their products regarding the end of the product chain. By governments, environmental organisations, and producers alike, the idea of EPR is seen as a good set of tools to limit the environmental impact of products. However, it has become clear that EPR systems in their current form are not yet capable of living up to the expectations of a positive environmental impact.

What does EPR mean in practice?

In most cases, producers choose a collective form of EPR by joining together in so-called producer responsibility organisations (PROs). Various PROs representing different product groups of packaging, batteries, and car tyres are also active in the Netherlands and Belgium. These PROs ensure that statutory EPR obligations are met by organising the collection and treatment of a specific waste stream, such as packaging waste. One of the most important tasks of a PRO is therefore the organisation of logistical chains. By working together in a collective, economies of scale in logistics are possible and it is more difficult for producers to evade their responsibility (also called free riding).

PROs are usually non-profit foundations, to which the various participating producers pay a financial contribution. The level of the contribution in the Netherlands and Belgium is determined by the PROs themselves. In many cases, modulated waste management fees are used, by offsetting the net costs of treatment and administration against what the recycled material yields. With the proceeds, the PRO ensures that the collection and recycling targets are met. It may be that a producer makes changes to the design of a product in order to reduce its environmental impact. This is also called Design for Environment (DfE). By rewarding producers for this through a lower waste management fee, they could be encouraged to make their products more sustainable.

For product groups to which EPR applies via legislation, there is mainly an obligation regarding cost recovery for collection and recycling (based on the set recycling targets), facilitating separate collection and reporting reliable data in the area of waste management. The legislator plays an important role in this. For packaging, car tyres, electrical appliances, batteries and other product groups, the legislator sets targets and obligations for more sustainable management of the waste phase. Recycling targets are often at the heart of the agreements made. We see only limited legislation in Europe that helps to make products more sustainable when it comes to the use of raw materials. Hardly any effort is made to increase sustainability with a focus on the front end of the product chain and the systems in which products function, as Ecologic already concluded in earlier research. In practice, EPR therefore rarely and very limitedly drives changes in design and production processes, whilst this is precisely where, to a significant extent, the sustainability of the product and the system in which it functions is determined. The question is also to what extent EPR systems, as currently organised, are capable of this.

Earlier research

In theory, EPR is a useful and logical mix of policy instruments to ensure that products become more sustainable and producers take responsibility. However, research by various bodies (see e.g. PBL/CBS, Utrecht University, Ecologic) has shown that EPR systems in their current form are not sufficiently capable of encouraging producers to invest in Design for Environment (DfE). Recent research by Rebel Group commissioned by the Ministry of Infrastructure and Water Management also concludes that financial instruments such as reserving financial resources in advance for a product's waste phase do not encourage the producer to make a product (chain) more sustainable. As mentioned earlier, the focus of both policymakers and producers is usually on the waste phase of the product. When an earlier life stage of a product is looked at, it usually comes down to Design for Recyclability: producers try to make their products more recyclable by, for example, using less (packaging) material in the design phase or using more uniform materials. In some cases, such as in the Netherlands and France, they are rewarded or penalised for this via modulated fees. Examples include paying a higher contribution when a ceramic cap is used on a glass bottle and a lower contribution when uniform plastic packaging is easy to recycle. Although such measures may ensure better recycling, they do not always yield the maximum environmental benefit. For example, if a producer uses more uniform packaging material, it may be easier to recycle (DfR), but reusable packaging (DfE) would potentially deliver a much greater benefit to the environment.

But the (partial) absence of DfE is not the only flaw of EPR systems. In February this year, EUObserver and Apache wrote about how PROs operating in the field of plastic packaging influence environmental legislation in Europe. The investigation revealed that the Belgian PRO for packaging waste Fost Plus actively lobbied to oppose stricter environmental measures for packaging waste. Fost Plus and other so-called Green Dot organisations appear to influence packaging policy changes across Europe. For instance, various European organisations use similar arguments to stop, for example, deposit systems on beverage packaging. In addition, there appears to be little oversight and verification of the collection and recycling rates reported by PROs. The European Court of Auditors concluded that current collection and recycling rates for plastic packaging waste are far from accurate and that there is a lack of comparability of figures between different Member States. Researchers from Utrecht University also noted that oversight of PROs and the degree of transparency are very limited. Under Article 8a of the Waste Framework Directive, PROs are obliged to provide reliable data. Governments depend on this reported data, but verification of it is therefore largely lacking. The aim of a PRO is to achieve compliance for its affiliated producers. For the Afvalfonds Verpakkingen, this means, for example, that they ensure on behalf of producers that the recycling targets for packaging waste are met. The fact that the government is dependent on these business-funded organisations for reliable data collection compromises the governance of PROs by the government. In theory, EPR systems should impose responsibility on producers for the management of their products through legislation, with the government having a monitoring role. In the current situation, producers have not only been given responsibility, but also additional influence made possible by legislation.

Aim of our research

The question that arises from this is whether the different roles of a PRO, tasked with achieving imposed targets AND being a (discussion) partner for ministries/advocate for the business community, contribute to good environmental policy. Achieving maximum environmental gain through making product systems more sustainable is the ultimate goal of EPR, but may be difficult to achieve within the current system. Through research, we want to clarify how the relationship between PROs and producers, policymakers, policy processes, and other stakeholders affects the functioning of EPR systems. What about the governance of these foundations, for example? In theory, the government should have a monitoring role, but is this control optimal? How much say do Dutch PROs have in the policy process? How do governments weigh the role of EPR organisations against other stakeholders when drafting laws and regulations? And what would, from a

An analysis of the governance of EPR systems must map out how governments and PROs relate to each other and which changes in policy and the policy-making process would contribute to better environmental policy. This is a prerequisite for the successful sustainability of product systems and thus achieving maximum environmental gain.