Extended producer responsibility (EPR) is a form of product stewardship. Under EPR, manufacturers and brand owners (known as producers) are responsible for the products they make or sell, and any associated packaging, when they become waste. This means producers help to pay for the costs of collecting, transporting, recycling and responsibly disposing of these products and materials at the end of their life. EPR is focused on life cycle thinking, as it forces producers to remain accountable for their products past the factory gate – beyond the point of purchase and any warranty period.
Why do we need it?
EPR helps producers minimise their environmental impacts by encouraging them to find ways to reduce the costs associated with end-of-life products. For example, by designing products better so they last longer, thus making them more suitable for trade-in or upgrade, or simply easier to recycle. Under EPR, producers may also get a greater say in how product take-back and recycling schemes operate, enabling them to secure better access to secondary materials for their own supply chains.
EPR has wider social benefits too. It can help tackle litter – applying EPR schemes to frequently littered items such as cigarette butts and chewing gum could save UK councils £300m (pdf) in clean-up costs each year, potentially reducing council tax bills. It can also result in fairer models of consumption. Because EPR costs are often built into the purchase price of a product, only those consumers who buy the product end up paying for its disposal.
Is it already in existence?
Yes. There are around 400 EPR schemes in operation across the world, most of which are mandatory. Within the UK, packaging, electrical and electronic goods, batteries and cars are all subject to EPR requirements through various EU directives. Outside of the UK, countries such as France and Japan have taken EPR a lot further. France has 14 mandatory EPR schemes in place covering additional product streams including furniture, tyres and infectious healthcare waste. Japan has an extensive EPR law that covers the lifecycle of products from various industries – part of this legislation requires manufacturers to use recycled materials and reusable parts in new products.
How do the economics work in practice?
Most mandatory EPR schemes, such as those covered under the EU WEEE and Packaging directives, are fee-based models. The producer pays an upfront fee proportional to how much product they place on the market, and this levy helps fund the collection and recycling infrastructure needed. Producers have the option to set up and manage their own EPR scheme, but most choose to delegate this responsibility to a third-party organisation by signing up to a collective compliance scheme such as those run by REPIC or Valpak.
The UK is unique in that it runs a market-based EPR scheme for packaging, known as the Packaging Waste Recovery Note (PRN) system (pdf). Here, obligated producers have to purchase a set number of PRNs from reprocessors, which serve as evidence that their packaging has been recycled. The system is meant to subsidise packaging recycling, however it’s not very transparent and it remains unclear how the money is spent. Calls are growing for a reform of PRNs and in 2010, Marks & Spencer piloted a different approach to invest directly in collecting the materials it needed.
And what happens to the product?
This depends on the EPR model applied. Most packaging is collected via kerbside recycling services. Voluntary EPR schemes are emerging, which target specific, hard-to-recycle packaging products – one example is Nestle’s trial with Suez and Terracycle to take back Nescafe Dolce Gusto coffee pods from households in Berkshire.
Larger items such as electrical appliances, gadgets and clothing can be taken by the consumer to designated drop-off points, or returned to the retailer through in-store product takeback / home delivery schemes when the customer buys a replacement product. Pioneering examples of in-store takeback include M&S’ shwopping initiative, Ikea’s second life for furniture and lightbulb recycling reverse vending schemes and Argos’ trade-in service for unwanted gadgets.
Once the item has been collected, if it’s a product or component part, it may be able to be refurbished and reused. Packaging is typically recycled and reprocessed into a secondary raw material, and taken back into the industrial manufacturing process.
What’s next for extended producer responsibility?
A recent study (pdf) found that on average, only 45% of product and packaging waste within the EU is covered by an EPR scheme. The European Commission has recognised that EPR can act as a useful policy tool for accelerating the circular economy, and EPR requirements for member states are likely to be strengthened in its forthcoming circular economy package.
In the UK, Scotland is considering introducing a separate mandatory EPR system – a national deposit return scheme for drinks packaging. Here the consumer pays a small cash deposit, typically 10p, when they buy a canned or bottled drink which is then refunded when they return the item back to the retailer or a central collection point. Modelling work (pdf) suggests that such a scheme in Scotland could generate up to £22m in revenue from the sale of collected material. Producers like Coca-Cola are now backing such schemes.
Content on this page is paid for and provided by Suez, sponsor of the circular economy hub
