During one of the first sessions of SPC Impact 2021, an international panel sat down to discuss the challenges of implementing Extended Producer Responsibility (EPR). The panel, Harmonizing EPR: Lessons from Abroad, included Elizabeth Balkan, Americas Director at Reloop, Dr. Fritz Flanderka, Managing Director of Reclay Group, Dominic Hogg, Director of Equanimator, and Usman Valiante, Senior Policy Analyst for Corporate Policy Group.
EPR is a policy approach where producers are given significant responsibility for the end-of-life of products. This responsibility can be both financial and physical in varying degrees. There are many different approaches to this type of policy, and many go beyond providing for end-of-life services to promote responsible product design, infrastructure improvements, and market development. Effective EPR is often cited as a necessary piece of the puzzle in addressing the current recycling challenges and concerns over single-use product pollution.
In the past few years, there has been growing attention to EPR for packaging and paper products (PPP) in the U.S., and it is only accelerating. At least nine states have introduced packaging EPR proposals so far this year. There is also a significant EPR component to the Break Free from Plastic Pollution Act (BFFPPA), House Resolution 2238, reintroduced into Congress in March. Beyond the U.S., EPR for packaging is gaining global attention and adoption. This brings to the forefront the need to harmonize EPR across diverse regions, especially given the global interconnectedness of the economy and consumer packaged goods markets.
The panel shared valuable lessons from decades of experience with these types of programs. Here are 5 (of many):
1. Developing effective EPR is an iterative process.
Listening to the panelist’s history of EPR in the regions they represent, it is clear that these programs have evolved over time. Dr. Flanderka has been involved in the development of EPR programs in Germany and other European nations since the early 1990s. Since then, many things have changed, such as switching from self-compliance to now requiring participation in a Producer Responsibility Organization (PRO). The approach to PROs has also transitioned from a monopoly to a competition-based system.
Hogg, based in the United Kingdom, likened Europe to “a living laboratory” of different EPR approaches. He highlighted some of the most notable changes in recent EU legislation, including the Circular Economy Action Plan (CEAP) and the Single Use Plastics Directive (SUPD). The updates increase performance targets, promote reuse, and improve measurement standards. The SUPD also requires certain producers to cover public waste collection and clean up litter, strengthening the connection between EPR and plastic pollution.
Valiante describes Canada’s journey in waves: first came deposit return systems, then an emphasis on producers sharing responsibility for the cost of residential recycling. Canada is now in a third wave as more provinces and territories are transitioning to full producer responsibility, where producers cover all costs associated with the program. He is also seeing a shift towards holding individual producers responsible for achieving targets, as legal liability can provide a stronger signal to companies to meet the requirements.
Providing the U.S. perspective, Balkan emphasized that while EPR for packaging is new to the states, there is a lot of experience within the global producers in the industry. She also cautioned about feeling the need to catch up with the rest of the world and recommended that policy developers in the U.S. take these learnings and use them to develop a thoughtfully structured and regionally appropriate system.
2. Standardized definitions, performance criteria, and accurate metrics are critical.
Throughout the conversation, the panelists underscored the need for standardized definitions and accurate, measurable, and appropriate data. Standardized definitions across a region help ensure that what is being measured is essentially apples to apples. For example, if the definition of “Laminate Plastic Packaging” is consistent across the packaging industry, then the amount of that type of packaging entering a market and being recovered can be more easily assessed. It is also essential to have a harmonized definition of who the “producer” is so that the appropriate parties can work to implement the program and achieve the targets.
Hogg referred to the pitfall of using weight as a metric for system performance. New packaging supplied into the stream is likely cleaner and drier than the waste collected for recycling. Comparing the two may distort the data and make it appear as though a greater proportion of products are being recovered. Accurate data ensures that progress towards performance targets, which are often set in legislation, can be tracked. “You’re not going to get effective EPR unless you can actually apply performance standards and measure and enforce them,” Valiante explained, “So, to me, that’s the essence of EPR: who the targets apply to and your ability to enforce and measure them accurately.”
3. It doesn’t have to be an all-or-nothing approach.
“I think there’s a bit of a false dichotomy,” said Balkan, referring to the choice between either maintaining the current municipal waste system or relinquishing municipal control under EPR. “It’s not an either-or,” she continued. Instead, policy developers should look at what is working well and should be left in place versus what could be improved upon by changing the level of control.
Valiante believes that there is a tendency to overthink what needs to be included in EPR legislation. “If laws focus on performance standards both for accessibility and for recycling targets,” he suggests, “you’ll be surprised how efficiently the market will engage existing players on the ground. It just makes sense to use what’s there and repurpose it and scale it.”
4. Deposit Return Systems play an important role.
When answering an audience question about the role of bottle deposit programs, also known as Deposit Return Systems (DRS), Valiante emphasized that these types of programs, like curbside recycling, are collection systems. In contrast, EPR is about who is responsible for that system. A DRS can be an EPR tool if producers are made responsible for the operations or cost of the program.
Hogg followed this up with support from Europe that showed that deposit schemes, while at relative cost parity with other EPR programs, result in unmatched collection rates (upwards of 98% in Germany). Beverage brands that are committed to circularity, using recycled content, and preventing their products from becoming litter are realizing that well-designed DRS may be part of the solution.
5. There is no blueprint.
Despite the valuable lessons and examples of programs, the panelists shared the sentiment that there is no perfect model. Regions looking to implement EPR must consider their own features. In Dr. Flanderka’s view, the key driver is market conditions. Most companies are set up to operate within one or more markets, so standardization across a market can fit well with existing operations.
One of the areas in which EPR policies differ is the level of operational control either given to the producers or maintained within the municipality. Hogg feels that it is important to look at the different aspects of the existing system. If a municipality collects waste, it may make sense for it to continue collecting the packaging covered under EPR. However, sorting may be a supply chain step where producers are better suited to manage operations to ensure the most efficient output.
Balkan and Valiante both referred to situations in which municipalities may decide not to remain involved in recycling collection and operations, in which case the producers can work with private haulers to collect covered products. The important thing is to look at the existing conditions and desired outcomes and design an approach to reach those outcomes.
The panel closed with thoughts on how the industry can be involved in developing EPR programs that work for all stakeholders. Balkan pointed to the growing momentum of EPR and indicated that the time is right to get involved in these discussions. She recommends that industry actively work together and come to the table with other stakeholders to figure out a common solution.
Dr. Flanderka’s final comment emphasized an important lesson: it’s hard to change the principles of an existing system. Harmonization of EPR across a region is most effective, and most achievable, when built in from the start.
If you missed this panel when it was live, be sure to watch it and other SPC Impact programming on-demand through the SPC Impact platform.
Interested in learning more about the various EPR proposals in the U.S.? The SPC has developed a guide to current bills and financing proposals to help the packaging industry make sense of what is out there and how it may impact our members. See the Introduction to the Guide for EPR Proposals here.