By Piet Coopman
By shifting responsibility for certain products once they have become waste from tax payers to consumers and producers, Extended Producer Responsibility (EPR) enables an internalisation of the effects of consumption.
EPR has been implemented with mixed success. In some countries it has been implemented through clear legislation and created working cooperation between governments, producers and waste management organisations. In other countries, the implementation of EPR has turned out to be a failure due to a lack of internalisation of environmental costs as well as insufficient quality of collection services to the public.
IWSA's Key Issue Paper on EPR is predominantly based on experiences with EPR in the European Union and has to be read in that context.Background to EPR
Issues of environmental protection were first discussed in European Union policy circles in the 1970s. Since then a number of fundamental principles of sustainable development such as the 'precautionary principle', the principle of 'prevention' and the 'polluter pays' principle, have gradually become fundamental to policy development both within the EU and internationally. The concept of EPR was first introduced by Thomas Lindhqvist, professor at the Lund University in Sweden. In 1990, he wrote a report for the Swedish Ministry of Environment about this policy principle that places a responsibility for a product's end-of-life impact on the producer and seller of that product. The necessity for the introduction of EPR comes from the growing awareness that other environmental policy measures might not be sufficient to reach the environmental goals of society.
The responsibility of the producer can be physical, financial and/or informational. According to the OECD, internalisation of external environmental costs is considered a fundamental aspect of environmental policy design, and more specifically of EPR, and these tenets have now been formally included into the EU Waste Framework Directive. Although producers have the primary responsibility under EPR, all actors of the product chain and in society have a responsibility.Objectives of EPR
1 Create a sustainable production and consumption policy
EPR is a key element in implementing a sustainable production and consumption policy, promoting resource efficiency, high-quality recycling, substitution, use of secondary raw materials and the production of sustainable goods. As a result, it should improve the environmental performance of products throughout their life cycle, while meeting industrial and consumer needs.
2 Incentives for ecodesign
With the introduction of EPR, producers should be encouraged to incorporate changes in the design of products in order to be more environmentally sound. This should make products easier to dismantle, reuse and recycle. In this way, the total environmental impact of a product decreases and waste prevention is stimulated.
3. Reduce landfilling and develop recycling and recovery channels
EPR should reduce landfilling of waste and lead to increased recycling, under environmentally, healthy and socially desirable conditions. In this way, EPR can create meaningful jobs in the recycling and waste management sector.
4. Full internalisation of environmental costs
The full internalisation of environmental costs allows financing the sustainable and economically efficient management of waste. The environmental costs, at the least, include costs for pollution prevention and the collection, recycling and treatment of waste. These environmental costs should be incorporated into the price of products. As a consequence, the consumer, and not the taxpayer, bears all costs related to the waste he has produced, which is more socially fair.EPR is not a stand-alone policy principle
A single policy measure can rarely achieve the stated policy goals. Policy measures have the best results when they are applied in a mix. The mix of policy measures should fit other measures. EPR is recognised to be a strong policy principle in waste management. However, there is no one-size-fits- all approach in different countries and for different waste streams. Moreover, EPR is not a stand-alone policy measure. EPR should always be incorporated in a mix of environmental policy measures. The purest form of EPR is without a doubt the take-back of products by the producer. But product ta- ke-back should never be an automatic choice, as other instruments might be more effective to reach the goals mentioned above. Alternative approaches may be the introduction of tradable recycling certificate systems, direct financing of collection and recycling, etc.Impact of EPR
In 2006, Van Rossem et al. concluded there is both implicit and explicit evidence of the impact of EPR on product design. Even though it is recognised that determinants of product innovation are coming from a variety of push and pull factors such as legislation, consumer preferences, EPR does provide tangible incentives for environmentally-conscious design.
More specifically, EPR legislation had an impact on hazardous materials reduction and improved recyclability and recycling of products. The researchers concluded that the drivers of ecodesign are strengthened when there is feedback on the total end-of-life costs to individual producers. They did not only see an impact on the design of new products, but also saw considerable improvements in the collection of discarded products and treatment of these products. Furthermore, research by INSEAD concluded that the implementation of the WEEE Directive has led to an increase in the collection and recycling of WEEE. When it comes to shifting the financial responsibility from the general taxpayer towards the producer, Van Rossem et al. concluded that municipalities in at least nine countries still had the obligation to finance the collection of WEEE from households in 2006.
They also discovered that in practice, municipalities were paying for most of the costs concerning WEEE-collection even in those cases where the producer was legally obliged to do that. This illustrates that a considerable part of the costs of managing WEEE were left to general taxpayers in many countries despite the introduction of producer responsibility. This disables the possibilities of internalisation of environmental costs, as they are not or only partially shifted from taxpayers and local authorities to consumers and producers.
Extensive research by the European Commission on 36 case studies of EPR on different waste streams in the European Union revealed that in most of the benchmark cases, the net operational costs for collection, transportation and treatment of separately collected waste are covered by the EPR system.
The extent to which net operational costs are assumed by producers is highly variable and depends notably on the share of organisational and financial responsibilities of the various stakeholders, as well as on the national framework for EPR.Key considerations
Effective policy design on EPR will depend on national circumstances, conditions and priorities. However, ISWA does believe there are some key considerations that should be taken into account when designing EPR policy, that the policy yields the desired effects. ISWA identifies the following key considerations:
1. Stakeholder involvement in the development of EPR
All stakeholders who are affected by the legislative framework of EPR should be involved in the process of development, in which the extent of involvement is related to the type of stakeholder. Stakeholder involvement creates a basis for the EPR policy and improves the acceptability and effectiveness.
2. Clear allocation of responsibilities among all stakeholders involved While producers have the primary responsibility, all actors involved must bear responsibilities. EPR legislation should therefore clearly allocate responsibilities of national, regional or local governments, of all actors in the product chain (producers, importers, wholesalers, retailers and consumers) and among all waste management actors (waste management collectors, recyclers).
Clear allocation of responsibilities is necessary to avoid conflicts of interest between the stakeholders involved. This allocation should be made in view of the policy objectives and product characteristics. Furthermore, there should be a clear mechanism whereby all legally obligated parties can be identified.
3. Individual or collective compliance for producers
Producers should be able to choose to meet their responsibilities on an individual basis or through a collective compliance mechanism, such as a Producer Responsibility Organisation (PRO). When choosing a collective compliance mechanism, it is important that it is designed in such way that producers cannot gain an unfair advantage over their competitors or avoid their responsibilities by choosing one or the other of these mechanisms. Moreover, if national legislation allows multiple PRO's to compete for the same waste stream, it should be ensured that they operate effectively together and without jeopardising the achievement of policy targets.
4. Transparency of EPR
As EPR is strongly linked to a public service, transparency is a primary requirement in its imple- mentation. Transparency is necessary to the extent that national governments can control the proper implementation of EPR and both producers and consumers can make informed choices. This should be ensured through reporting and regular audits by the government. It should also be transparent if a producer responsibility organisation (PRO) or an obliged company is using diffe- rent ways to comply with the legislation.
5. Governmental support, monitoring, evaluation and control
An effective and efficient legal framework accompanied by adequate regulatory investigation and enforcement activity is a primary prerequisite for successful implementation of EPR. Govern- ments should enforce this legal framework to close loopholes and trace free riders.
Next to that the government must monitor the implementation of EPR. Information needed from producers should be reviewed in terms of the value of the information in relation to the burden to provide such data and information. The legal framework should include control mechanisms for government and sanctions for not reaching objectives and targets.
The implementation of EPR should also be periodically evaluated by governments and, if necessary, be adjusted. Governments also have to implement an accreditation process for PRO's with minimum requirements.
6. Ambitious and clever policy targets are a necessity
A fundamental goal of EPR is to increase the collection and recycling of waste. Therefore, ambitious and clear targets need to be set. Also, clear targets on household waste should avoid cherry picking of easily recyclable materials and products, either at the collection or dismantling phase. Targets could be qualitative and/or quantitative and could be set for a group of products or for individual product categories.
7. Quality and accessibility of collection service nationwide for municipal waste streams Legislation on EPR for municipal waste streams should avoid cherry picking between collection areas and insure the same quality and accessibility of collection service nationwide, with a homogeneous, coherent system in terms of image and communication, organised at the local and/ or regional level.
8. Compensation of reasonable costs for the use of municipal infrastructure
Any kind of EPR system that uses municipal infrastructure should guarantee a compensation of reasonable costs for the use of this infrastructure. In any case, local and regional authorities should not have any obligation to hand over collected waste falling under EPR if their reasonable costs are not covered by the producers.Conclusions
There is no one-size-fits-all approach of EPR. Its implementation is a complex topic bringing many potential challenges. There are additional, and perhaps more 'practical' or 'operational' aspects to be considered for successful EPR implementation, including the existence (or lack) of waste management infrastructure, and the existence (or lack) of other waste policy measures such as landfill bans or pay-as-you-throw systems.
This paper was prepared by ISWA Legal Issues Working Group with Piet Coopman as lead authorMore Waste Management World Articles
Waste Management World Issue Archives