The Circular Economy was but an apple when the first rules on Extended Producer Responsibility (EPR) were developed. The schemes aim to create financial incentives for producers to consider the full environmental impacts of their products, by obliging companies to foot the bill for their disposal after sale and use.
The first instance of EPR in EU legislation was in the Packaging Directive of 1994, then in the End of Life Vehicles Directive of 2000 and the Batteries Directive of 2006. By 2008, the Waste Framework Directive had included EPR as a general principle of waste management. But throughout all this, EPR schemes have remained the prerogative of national governments.
Over the years, the scope and number of EPR schemes across the EU has grown hugely, with a recent estimate by the organisation for packaging and the environment, EUROPEN, putting the amount raised by packaging schemes alone at over €3 billion per year. Many companies now outsource their obligations to Producer Responsibility Organisations (PROs), some of which they partly own, and many of which operate as profit-making businesses. The number of PROs varies by country and by sector (for waste electronics, for example, there are 3 in France and 39 in the UK). The fees companies pay, the number of products covered and the criteria for deciding how end-of-life costs are calculated also vary widely. So if you sell a product in a number of EU countries, the system now looks very complex indeed, as different EPR rules apply. So there are good single-market reasons for Brussels to be taking fresh action and many businesses welcome the moves towards harmonisation and minimum standards. But the Commission has to balance this with the principle of subsidiarity – as emphasised by several national environment ministers at a Council meeting in March.
At the same time, EPR schemes need a boost, as they have become central instruments of the EU’s plan to create a European Circular Economy. So policymakers in Brussels have a tough job. They need to ensure that national governments are left in the driving seat to design EPR schemes that don’t obstruct the free movement of goods. But they also want to use EU legislation to create genuinely European-wide norms on eco-design and secondary raw materials.
The Commission’s proposals to update EPR were published last December as a new article to the Waste Framework Directive (article 8a) which the European Parliament’s Environment Committee is now scrutinising. There are several new “general requirements” for existing EPR schemes, including a provision for clearer definitions of roles and responsibilities, enhanced transparency requirements for PROs, as well as more exhaustive reporting systems and better information-sharing. There are also proposals for schemes to differentiate (or “modulate”) the fees they charge per waste-stream, based on how much each part of the waste collection and treatment process costs. This could prove crucial in incentivising waste management companies, PROs and local governments to work together to strip out costs and to reward greener products. There have been interesting developments in France here which appear to be working well.
A more controversial proposal considers extending producer fees “to ensure that waste-holders…are informed about the available waste collection systems and the prevention of littering”. Such clauses could significantly widen the scope of EPR fee coverage and have caused some consumer-goods companies, for example, to worry about being landed with a large bill for cleaning up Europe’s litter.
Yet the proposals have also attracted criticism for a lack of ambition. Zero Waste Europe (ZWE), for example, published a report last year finding that EPR schemes don’t even cover a third of municipal solid waste across Europe at the moment. And only half of the waste these schemes do cover gets collected separately. So there is a lot of work to do, as ZWE’s director, Joan-Marc Simon, notes. “EPR was useful for raising recycling rates in Europe over the last 20 years but we need them to do a lot more if we are to move to a genuinely circular economy where total waste is reduced at source and products are designed for re-use.”
The coming months will see a raft of policy wrangles between MEPs, national governments and the Commission on the fine detail of EU law towards EPR. What emerges will be central in determining the speed at which at a genuinely circular economy can be built in the EU.
This article was originally published on BusinessGreen.