Are you ready for the EPR era?
March 2023
A decade ago, the idea of a circular economy - where waste is properly managed, products are designed to last, be repaired and/or be recycled – was very much an outlier in mainstream business thinking.
Not any longer. Increasingly, industry sectors and individual businesses are looking to shift away from a linear approach to production not least because of the increase in environmental policy regulation and legislation that is being set all around the world. The circular economy and waste legislation are introducing measures to improve waste management – notably Extended Producer Responsibility (EPR) obligations for different products and waste flows.
Simply put, EPR places the environmental responsibility on producers for their products beyond the point of sale. In doing so it is designed to reduce waste and conserve natural resources by making producers responsible for the ‘post-consumer stage’ of their products' lifecycle.
How will EPR impact your business?
The obligations of EPR will vary around the world but its overarching impact is that businesses will be required to bear associated lifecycle costs depending on the type of product they make. These costs will likely include the collection, transportation, treatment, and disposal of products. Prior to the introduction of EPR, these costs were partly (and in some cases wholly) borne by local governments.
Usually, EPR legislation allows producers to deal with these obligations individually or through collective systems such as producer associations that take responsibility for organising and financing waste management.
EPR can be implemented in various forms. It can include product take-back requirements, (including deposit and return systems), economic and market-based instruments, regulations and performance standards, and information-based standards.
EPR legislation can also include rules on the design of products. This might be eco-design requirements to facilitate recycling or an obligation to employ a percentage of recycled materials. It might also include specific targets and measures to foster reutilisation.
One important element of emerging EPR regulations is that they can be complemented by other regulatory measures to promote circularity including new taxes and levies.
Ultimately, governments hope that EPR regulations will encourage producers to take advantage of available financial incentives by embracing environmental considerations when designing new products implementing recycling programs.
What can we learn from EPR so far?
As more EPR regulations come into force, it is worth considering how some of the most prominent examples so far have been implemented in different parts of the world.
In Europe, the European Union (EU) is already regulating EPR for different products, including packaging, single use plastic items, batteries and accumulators, electric and electronic equipment. The EU also is due to introduce new measures to harmonise packaging across the Single Market - including recycling and reuse targets, bans on more types of packaging and measures to encourage the reduction of packaging waste. The Draft Packaging and Packaging Waste Regulation (which will be EU wide and directly applicable, so does not need to be separately implemented by each Member State) was published by the Commission on 30 November 2022, and it is likely that we will see this regulation passed during 2024.
Some individual nations have adopted EPR schemes through national legislation affecting waste flows not covered by EU Law. In France, sectors subject to EPR include textiles, graphic paper and furniture and furniture elements. France also is among the countries with the largest number of product categories that can be subject to EPR. Three new EPR schemes were introduced for toys, sports equipment, and gardening/DIY products.
In Spain, the new Spanish Waste Act aims to ensure that producers of textiles, furniture, and home fixtures, as well as plastics for agricultural use, among others, take financial and/or organisational responsibility for managing their waste.
The United States is now implementing EPR regulations on packaging having passed the Break free From Plastic Pollution Act in 2021. On a state level, Maine, Oregon, Colorado, and California have all passed ‘waste reduction’ laws with financial penalties for those companies that break them. At least seven other states are expected to pass state bills outlining EPR regulations for packaging and, in 2022, some 40 EPR-related bills were tabled for consideration across 19 states.
While Europe and the US are taking action, a number of other nations also are starting to embrace EPR policies. China first passed its Regulation on the Administration of the Recovery and Disposal of Electrical Waste in 2011 and new laws to complement its EPR framework are anticipated by 2025. South Korea first implemented an EPR scheme for e-waste back in 2003 which now covers 27 electronic products. Singapore, meanwhile, currently has several voluntary initiatives for e-waste recycling and a waste management system.
In Latin America, several countries regulate EPR in their waste legislation, but many have not yet developed measures for implementing individual waste flows. However, countries such as Chile and Colombia are well advanced on EPR systems, covering, for example, electric and electronic waste, packaging, and hazardous waste, among others.
What does the future hold?
Consumers are increasingly becoming more environmentally astute and conscious. As such there is growing demand for sustainable products that leave a small environmental footprint. EPR offers an opportunity for companies to reconfigure product design and lifecycles to align with sustainability commitments aimed at reducing environmental impact.
Governments, for their part, look set to evolve and refine EPR programs. This may see a wider range of products covered and higher expectations around waste reduction and recycling innovation. And while there is no universal governmental approach to EPR, it’s clear that producer responsibility is a central focus.
It is therefore important that businesses affected by EPR take a considered approach, especially where they might be making public commitments and sustainability disclosures. The consequences for non-compliance with EPR programs could create both legal liabilities and reputational issues.
How you can prepare your business now for EPR reforms
There are significant similarities in EPR frameworks being introduced around the world, but also significant differences. This adds a level of complexity for business - particularly given the increased focus on the circular economy and ESG reporting.
Here then are five key points to consider as you adapt your approach to EPR.
- Undertake horizon scanning of EPR regulatory changes to help prioritise your best approach as well as gain a globally holistic view of compliance that will help you identify efficiencies (and cost savings).
- Embrace strategic planning to understand how the changes to your responsibilities as a business will change in the next 3 to 5 years.
- Employ compliance mapping and data gathering to help gather the right information from supply chain partners and create commercial efficiencies.
- Upskill your staff to ensure awareness of EPR changes and steps to achieve compliance.
- Understand regulatory and legal implications for the different jurisdictions where you operate.
By focusing on these key considerations, companies can start to shape an EPR strategy that will ensure they are fit for the next generation of sustainable business.
