sign in sign up
<<
Home , Circular economy, Recycling, Waste, Waste collection

Extended Producer Responsibility

Policy Highlights Guidance for efficient 1 . OECD POLICY HIGHLIGHTS - Extended Producer Responsibility

Extended producer responsibility Updated guidance for efficient

Since the late 1980s, the concept of “Extended Producer outlined possible options, and analysed some of their Responsibility” (EPR) has become an established pros and cons. principle of environmental policy in an increasing range of countries. It aims to make producers responsible for Since 2001, the number and variety of EPR systems the environmental impacts of their products throughout have increased significantly. Thus, a review of recent the product chain, from design to the post-consumer experience is timely, particularly in view of the phase. It was hoped that this would alleviate the burden support that EPR could provide to enhancing on municipalities and taxpayers for managing end-of- productivity and the , issues that are life products, reduce the amount of waste destined for now high on the environmental policy agendas of many final disposal, and increase rates of . countries. In its first part, this report provides updated Guidance on EPRs, building on the 2001 Manual and OECD provided a platform for countries to exchange in view of the developments and lessons learnt since experience, and, in 2001, produced a Guidance Manual then. In the second part, the report focuses on four to support the development of EPR systems. Given the selected challenges within EPR systems: the design diversity of approaches, the Guidance Manual did not and governance of EPR, competition issues, design for aim to prescribe how EPR systems should be set up. environment incentives and the role of the Rather it provided some general guiding principles, informal sector.

Figure 1. Cumulative EPR policy adoption globally, 1970-2015

350

300 Other Packaging 250 18% 17% 200

150 Tyres 18% 100 35% 50

Number of policies adopted policies of Number 0 1970 1980 1990 2000 2010 /auto batteries Year 12% Source: OECD (2013), What have we learned about extended producer responsibility in the past decade? – A survey of the recent EPR economic literature, Paris. P OLICY

OECD POLICY HIGHLIGHTS - Extended Producer Responsibility . 2 H IG LIG TS

Extended producer responsibility Updated guidance for efficient waste management Evolution and impacts of EPRs

A recent survey identified about 400 EPR systems currently in operation. Nearly three-quarters were established since 2001. Legislation has been a major driver, and most EPRs appear to be mandatory rather than voluntary. Small consumer electronic equipment accounts for more than one-third of EPR systems, followed by packaging and tyres (each 17%), end-of- life vehicles, lead-acid batteries and a range of other products. Various forms of take-back requirements are the most commonly used instrument, accounting for nearly three-quarters of those surveyed. Advance disposal fees (ADF) and deposit/refund account for most of the rest. While in some cases individual firms have established their own systems, in most cases, producers have established collective EPR systems managed by Producer Responsibility Organisations (PROs).

Figure 2. EPR by product type, worldwide

Other Packaging 18% 17%

Tyres 18% Electronics 35%

Vehicles/auto batteries 12%

Source: OECD (2013), What have we learned about extended producer responsibility in the past decade? – A survey of the recent EPR economic literature, Paris. 3 . OECD POLICY HIGHLIGHTS - Extended Producer Responsibility

Assessing the impacts of EPR systems is difficult for several reasons: a considerable lack of data; analytical difficulties in distinguishing the impact of EPR systems from other factors; and the wide variety of EPR systems which limits comparison among them. Bearing in mind these caveats, there is evidence that in some countries (e.g. ), EPRs have helped to shift some of the financial burden for waste management from municipalities and taxpayers to producers, and to reduce the public costs of waste management. In addition, it D I D Y O U K N O W ? seems likely that EPR systems have contributed to the decreased share of waste destined for final disposal and EPRs are now widely used with to the increased rates of recycling recorded in many around 400 such systems in OECD countries. However, progress in these areas varies operation worldwide very widely among countries, suggesting that there is scope in many countries to improve their performance by emulating the best performers. EPR systems are also likely to have contributed to the emergence of the multi-billion dollar waste and recycling , and the related investment and employment opportunities. On the other hand, the consensus appears to be that while EPR systems have contributed to waste prevention (e.g. eco-design) in some countries and some sectors, they are seldom sufficient to serve as the triggering factor.

Figure 3. Trends in management in the OECD

Decoupling trend, municipal waste generation versus GDP, Municipal waste management, recovery and disposal rates, 1990-2014 1990-2014

Municipal waste GDP Material recovery Disposal Index 1990=100 Amounts in kg per capita 180 700 634 632 160 593 604 588 600 586 140 500 120

100 400

80 300 60

40 200

20 100 0 0 1990 1995 2000 2005 2010 2014

Note: Municipal solid waste only covers packaging and e-waste, but other types of waste covered by EPR, such as ELVs and tyres are not reflected in these numbers. Source: OECD (2016), "Municipal waste generation and treatment", OECD Environment Statistics (database). POLICY HIGHLIGHTS 4 .

nsibility Respo Producer tended OECD POLICY HIGHLIGHTS - Ex - HIGHLIGHTS POLICY OECD

While generally successful, the performance While generally successful, the including by of EPR can be further improved, and increasing costs effectiveness their impact on product design

The 2001 Guidance Manual also provided more specific more Manual also provided 2001 Guidance The key elements the of issues, on a range recommendations recent with the more been integrated of which have experience. Many of the recommendations regarding the good the good regarding of the recommendations Many 2001 in the identified of EPR systems governance and should still relevant Manual are OECD Guidance the 2001 instance, For systematically. be applied more these systems that EPRs state guiding principles for change to with incentives producers should provide take a life-cycle ; stimulate product designs; responsibilities; chose flexible clearly define approach; policy the particular to adapted instruments product the across improve stream; and waste strategy; use product a communication chain; comprise (including local ); stakeholder consultation both voluntaryconsider and mandatory be approaches; of the products and analysis based on comprehensive periodic undergo under consideration; streams waste dislocations. economic and avoid evaluations; The OECD defines EPR as an environmental policy defines EPR as an environmental OECD The a for responsibility which a producer’s in approach product the post-consumer is extended to stage of a producers EPR involves In cycle. practice, life product’s taking collecting end-of-life products, for responsibility sorting their final treatment, and for them before producers EPR schemes can allow recycling. ideally, the providing either by their responsibility exercise to by assuming the and/or required financial aspects and organisational of the process operational of packaging. in the e.g. municipalities, from so- through collectively can do so individually or They (PROs). organisations responsibility called producer EPR can be voluntary by or mandated Furthermore, a variety of through and they can be implemented law, such as product take-back instruments, requirements (e.g. instruments and market-based or economic or a disposal fees), or advance systems deposit-refund of these. combination

recommendations Guidance and Guidance 5 . OECD POLICY HIGHLIGHTS - Extended Producer Responsibility

Design and governance of EPR

The design and governance of EPR are crucial to their The updated OECD guidance focuses performance. The issues range from target setting and on the design and governance of monitoring & enforcement, to free-riding and financing. EPRs, competition issues, design for environment incentives and the role of the informal sector • The targets of EPR policies should be periodically reviewed and adjusted, taking account of changes in market conditions and . Promote the integration of • In mandatory systems, governments should competition policy and EPR establish consistent and credible means for enforcing EPR obligations, including registers As the recycling and waste management industries of producers, official accreditation of producer have grown and become more concentrated, the responsibility organisations (PROs) and appropriate potential financial gains for producers, as well as the sanctions. additional costs to society that result from collusion among producers and other forms of anti-competitive • Adequately resourced monitoring systems behaviour, have become more significant. Since 2001, need to be established; the performance of EPR some competition authorities and courts have reviewed operations should be regularly audited, preferably alleged anti-competitive behaviour within EPR systems. independently. In the same jurisdiction, EPR systems should be harmonised to the extent possible, and a • Most attention should be placed on competition means for checking the quality and comparability of issues in product markets, where the welfare effects data established. are potentially largest, followed by collection and sorting markets, recovery and disposal markets, and • Free-riding, which still is a challenge to many EPR the market of producer responsibility services. systems, should be addressed through peer pressure and strict enforcement. • Concerns persist about collusion among producers and about the potential abuse of vertical • Governments should identify ways in which EPR agreements between PROs and companies involved systems can be financed in a sustainable manner. in downstream operations. An important means for This should include analysis of how risks such as minimising anti-competitive behaviour is to consult price volatility and leakage could be managed. competition authorities when EPR systems are being established.

Figure 4. Relationship among markets and actors • Services such as , sorting, as well as PROs with operational responsibility material recovery and disposal should be procured by transparent, non-discriminatory and competitive tenders. Product Markets Largest market • EPR schemes should allow single PROs only when it can be demonstrated that the benefits (e.g. the capacity to manage the waste would otherwise not PRO 5-10% of EPR costs be built) outweigh the costs of less competition. Markets

50-80% of EPR costs 10-40% of EPR costs

Collection Markets Treatment Markets Sorting Markets

1

Note: In some countries collection, sorting and sometimes recycling is the responsibility of municipalities. As a consequence they decide with whom to contract for these services not the PROs. POLICY HIGHLIGHTS 6 .

nsibility Respo Producer tended EPR systems need to find ways for informal operators operators for informal ways find need to EPR systems waste than against formal with rather work to they will is a risk that unless there systems, management them. be undermined by it will and easy or possible, this is not always However, to initiatives current be important lessons from draw to guide further policy in this area. development Integrating informal workers in in informal workers Integrating and developing emerging EPRs in countries many been established in have 2001, EPR systems Since the to In contrast economies. and emerging developing of numbers large are there OECD countries, most developed an estimated in recycling; engaged workers waste informal picking dangerous is often hard, Waste 20 million globally. serious concerns are there While and socially precarious. and recycling dismantling informal about downstream and environmental economic negative which can generate of informal contribution positive impacts, the potentially collection and sortingwaste activities is increasingly recognised. • • the since significantly has evolved global context The powers New economic of the first EPR policies. development chains product economy, in the global emerged have national and extended across complex more become have patterns altering changes are technological boundaries, the least due to not and consumption, of communication streams and waste some materials and markets for internet, In EPR systems such a context, highly volatile. been have more become to if they are evolve to continue to will have policy management to supportwaste tools and effective the resource-efficienteconomies. more to transition OECD POLICY HIGHLIGHTS - Ex - HIGHLIGHTS POLICY OECD Ideally, producer responsibility would be would responsibility producer Ideally, producers, of individual the level at implemented of scale and economies the significant but due to EPR systems most often available, are that scope which responsibility, producer apply collective eco-design. for incentives dilutes should therefore fees producers’ possible, Where the actual closely linked to end-ofbe more life instance for their products, of costs treatment weight-based) (e.g. the use of variable through and/or fees, unit-based) (e.g., than fixed rather to specific according differ that fees modulated easily make products more that features design recyclable. better In products, of globally-traded the case by also be achieved eco-design could incentives design. harmonising environmentally-sensitive etter internalisation of end-of-life costs and stricter end-of-life of costs internalisation etter • B for incentives also strengthen would enforcement the eco-designimproving of products packaging. and of the full cost they recover where a level at Setting fees by the end-of-life of the products covered management a key measure. the EPR is therefore • • Incentives for design for design Incentives for environment The updated OECD guidance focuses The updated OECD governance of on the design and issues, design for EPRs, competition and the environment incentives sector role of the informal For further reading see the following OECD report on which these Policy Highlights are based:

OECD (2016), Extended Producer Responsibility: Updated Guidance for Efficient Waste Management, OECD Publishing, Paris.

DOI: http://dx.doi.org/10.1787/9789264256385-en.

For more information: www.oecd.org/environment/waste/

Contact: [email protected]

This project is co-funded by the

September 2016