What is Extended Producer Responsibility?

What is extended producer responsibility?

Extended producer responsibility is becoming a favored public policy approach to manage post-consumption waste in most developed economies. Generally speaking, EPR shifts the financial (and sometimes physical) responsibility for the end-of-life (EOL) management of used packaging from consumers to the producer of the original packaging (Lindhqvist, 2000). Producer, in this case, is commonly defined as the brand owner of the packaged product or the first importer into a specific jurisdiction (typically the distributor or retailer who first receives the product in that jurisdiction). While the packaging manufacturer or the packaging material supplier is sometimes included under shared producer responsibility regulations, this is the exception and not the norm. The brand owner makes decisions as to which packaging materials will be supplied in a given market and, therefore, bears the ultimate responsibility for its end-of-life management.

EPR is the most commonly used term for this broad policy approach. Other terms that are commonly used include product stewardship and the polluter pays principle. EPR for packaging should be viewed as a subset of the broader global trend towards the adoption of sustainability thinking.

Table 1 below describes product currently being managed through EPR programs.

 

Short-life Consumables Durable Products Hazardous Components
Common Examples •   Packaging

•   Used motor oil and filters

•   Paints and coatings

•   Small quantity hazardous or special wastes such as cleaners, solvents

•   Pharmaceuticals

•   Single-use batteries

•   Plastic bags

•   Electrical and electronic equipment

•   Propane tanks and cylinders

•   Tires

•   Rechargeable batteries

•   Thermometers

•   Fluorescent bulbs and tubes

•   Automobiles

•   Mercury switches

•   Sharps

•   Residual flammables

•   Additives

•   Cold cathode fluorescent tubes

Emerging Initiatives •   Branded organics

•   Littered items

•   Carpets

•   Mattresses

•   Construction and demolition wastes

•   Irritants, corrosives

EPR is itself a subset of a broader effort underway to identify and assign costs to key environmental and social impacts.

Underpinning policy rationale

Although EPR policy formulation and programs for used packaging have been around for 20 years, EPR thinking is still in its infancy: The ever-widening range of government initiatives, program implementation models and new enterprises forming in response to these changes highlight the relative immaturity of the field. As a result, program costs vary widely.

The primary reason for adopting EPR policies, to date, has been the relatively narrow issue of post-consumer waste management. While grounded within the broader sustainability framework, most program initiatives have focused on the collection and diversion of designated wastes from disposal, with increasing attention being paid to waste reduction and product/packaging design (Tojo, 2001).

Primary public policy arguments for implementing EPR for packaging include (Mayers, 2008):

  1. To transfer the costs of managing packaging waste from the local tax base to the producer and user of the product.
  2. To provide a direct economic incentive for the producer of the package to reduce packaging materials and design packaging for improved recyclability.
  3. To bring the expertise and resources of industry to bear for the design and ongoing management of comprehensive materials management systems (as opposed to local waste management systems).
  4. As an initial step towards the development of a circular materials economy – where waste materials serve as feedstock for new processes (as opposed to the current norm: a linear extraction/production/consumption/disposal economic system).
  5. To make the producer and consumer of the packaging fully responsible for the environmental impacts of it production, use and end-of-life management.

Notably absent in most EPR practices, to date, has been the ability to design and implement a program based upon a broader product and packaging lifecycle assessment. This will likely change in the future to include consideration of greenhouse gas (GHGs) emissions, water impacts, hazardous materials and use of renewable materials and renewable energy.

Consideration of these impacts will be driven by:

  • Rising global concern with reducing GHG emissions, combined with evolving markets for trading GHG reduction credits;
  • Regional water supply and quality issues and a greater understanding of the water intensity of some production processes;
  • Public policies that favour the use of renewable energy and materials;
  • Development of lower-cost, open-source, linked data tools for completing lifecycle assessments;
  • Higher customer and public awareness of the environmental impacts of alternative packaging (and products) choices resulting from awareness of and access to verified, comparative data to produce scorecards; and
  • Lobbying by competing materials and packaging suppliers to shape EPR policies to favour their products.

This section briefly summarizes experience gained from the adoption of EPR for packaging in a range of jurisdictions internationally.

Alternative EPR Implementation Models

A wide range of policy alternatives are included under the broad category of EPR, and each differs in the manner and in the extent to which it may align with the spirit and principles of EPR. Table 7 below describes commonly used EPR implementation models.

Table 2: EPR implementation models

Approach Overview Examples EPR Policy Fit
Leasing products Ownership remains with the manufacturer who organizes the end-of-life (EOL) management to highest value use. •   Computer equipment

•   Carpets

•   Vehicles

High – All costs internalized to the producer and user.
Voluntary Deposits A redeemable deposit reflecting the actual or enhanced value of the product returned in its original form. •   Refillable beverage containers

•   Lead acid batteries

•   Pressurized containers

•   Shipping pallets and totes

High – Provides an economic incentive for the user or other economic actors at a level required to return product.
Mandatory Deposits A regulated redeemable deposit system; with mandated return-to-retail or licensed return centres; and fixed system-wide handling fees; sometimes with restrictions on container types. •    National beverage container deposit schemes in Europe

•    State and provincial beverage container deposit schemes in North America

Case specific – Parallel recycling systems can increase environmental burdens; can lead to cross-subsidization of container types; deposit funds can be seized for other unrelated services; can be a profit centre for system owners if return performance is low.
Individual Producer Responsibility Individual brand owner/manufacturer responsible for EOL management. Can take the form of:

•    Direct management as with collecting used appliances, mattresses upon delivery of new ones

•    Contracting with service providers to manage EOL products on their behalf

•    Return share allocation of costs based upon brand identification

•    Price support as required to incentivise entrepreneurs to collect used products

Medium to High

High if product returned directly to the producer

 

Adherence to EPR principles reduced if costs incurred by collective scheme allocated by current market share and where costs of unidentifiable, orphaned and obsolete products are high and allocated by current market share (e.g., computers).

Competing Producer Responsibility Schemes Groups of producers, individual industry sectors or service providers organize competing schemes and compete for customers. •    Packaging schemes in Germany, Poland, UK

•    WEEE schemes in France, Spain, USA, Austria, UK,

Case specific – Competitive forces can lead to unlevel playing field, inappropriate EOL management services, and reduction in recycling rates/volumes.
Tradable Credits Schemes Obligated producers purchase evidence of recycling of quantities of packaging sufficient to meet their obligations. •    UK national packaging compliance scheme Low to Medium –

Internalizes only the incremental costs of recycling additional quantities of packaging.

Monopoly Producer Responsibility Schemes Obligated producers form a single compliance scheme to discharge all companies’ obligations. •    National programs in Belgium, France, Portugal

•    Provincial programs in Canada

Case Specific
Low where fee rates do not reflect true cost to manage individual packaging types.Higher where materials are appropriately  disaggregated and assigned true costs to manage.
Packaging Taxes Sales based, unit or material specific tax applied by government. •    National programs Netherlands, Hungary Low – No direct incentive to producers; funds usually go to general revenue rather than ring fenced for EOL management; tax rates may be arbitrary; linked to government revenue needs.