Chapter 2. Towards more effective producer responsibility

This chapter integrates the main elements of OECD’s 2001 Guidance Document with the findings and recommendations emerging from the most recent analysis of EPRs. It finds that most of the original guidance remains valid and adds guidance in the areas where recent analysis has focused, particularly on the governance of EPR systems, the competition concerns that have arisen, opportunities to strengthen design-for-environment incentives and the role of the informal sector in EPR.


This section aims to integrate some of the key elements of guidance from 2001 together with the more recent experience gained. Specifically, it covers:

  • Key factors in designing EPRs

  • Governance of EPRs

  • Financing, free-riding and orphan products

  • Trade, competition and EPR

  • Eco-design

  • EPRs in emerging economies: the role of the informal sector.

Box 2.1. 2001 OECD Guiding Principles for EPRs

The 2001 OECD Guidance Manual is more than 150 pages, divided into 8 chapters and with 15 annexes. It includes 6 checklists for policy makers as well as the following set of guiding principles for the design and development of EPR policies and programmes:

  • EPR policies and programmes should be designed to provide producers with incentives to incorporate changes upstream at the design phase in order to be more environmentally sound.

  • Policies should stimulate innovation by focusing more on results than on the means of achieving them, thus allowing producers flexibility with regard to implementation.

  • Policies should take into consideration a life cycle approach so that environmental impacts are not increased or transferred somewhere else in the product chain.

  • Responsibilities should be well defined and not be diluted by the existence of multiple actors across the product chain.

  • The unique characteristics and properties of a product, product category or waste stream should be factored into policy design. Given the diversity of products and their different characteristics, one type of programme or measure is not applicable to all products, product categories or waste streams.

  • The policy instrument(s) selected should be flexible and chosen on a case-by-case basis, rather than setting one policy for all products and waste streams.

  • Extension of producer responsibilities for the product’s life cycle should be done in a way to increase communication between actors across the product chain.

  • A communication strategy should be devised to inform all the actors in the product chain, including consumers, about the programme and to enlist their support and co-operation.

  • To enhance a programme’s acceptability and effectiveness, a consultation of stakeholders should be conducted to discuss goals, objectives, costs and benefits.

  • Local governments should be consulted in order to clarify their role and to obtain their advice concerning the programme’s operation.

  • Both voluntary and mandatory approaches should be considered with a view on how to best meet national environmental priorities, goals and objectives.

  • A comprehensive analysis of the EPR programme should be made (e.g. which products, product categories and waste streams are appropriate for EPR, whether historical products should be included, and the roles of the actors in the product chain).

  • EPR programmes should undergo periodic evaluations to ensure that they are functioning appropriately and are flexible enough to respond to these evaluations.

  • Programmes should be designed and implemented in a way that environmental benefits are obtained while domestic economic dislocations are avoided.

  • The process of developing and implementing EPR policy and programmes should be based on transparency.

2.1. Key factors in designing EPRs

A key message in the 2001 Manual is that there is no single “right approach” when designing EPR systems. Solutions need to be found depending on the specific objectives to be achieved and taking account of the economic, political and cultural context. Accordingly, it was recommended that EPRs be established in accordance with general good governance principles, including:

  • Clearly define objectives, based on analysis and consultation with all relevant stakeholders. EPRs usually aim to achieve one or more of four main goals: reducing the use of (virgin) resources and materials; waste prevention; reducing the environmental impacts of products; and closing material use loops (“circular economy”). Each EPR should clearly specify which of these goals it aims to achieve.

  • Ensure consistency and coherence with related policies, in particular waste management and product policies. A life-cycle approach was recommended to ensure that environmental impacts are not increased or transferred somewhere else in the product chain.

  • The scope of the EPR should be clearly defined and the unique characteristics of the product, product category or waste stream factored into policy design. Products with the greatest potential environmental impacts should be the main target. However, a range of other factors influence which product/waste to focus on and how the EPR should be designed, including: the durability and composition of the product, the primary and secondary markets in which they are traded, and their distribution networks and supply chain.

  • The producers of the products subject to an EPR should be clearly defined. The “producer” was defined as the entity with the greatest control over the selection of materials and the design of the product. This could be the brand owner or the importer, or the filler of the packaging rather than the firm that produces the container.

  • A consultation process should be organised when establishing an EPR system with a view to enhancing its acceptability, transparency and effectiveness. Subsequently a communication strategy should be developed to keep all stakeholders informed of the EPR’s operations.

  • Specific challenges may arise in the start-up phase, such as uncertainty about waste volumes and the need for large capital investments in collection and treatment facilities. Consideration should be given to specific measures that may be required to help phase-in the introduction of the EPR.

  • Mechanisms for reporting and monitoring should be established to enable the results of the EPR to be evaluated and the adjustments made as required.

  • When EPRs are based on law, which is not always the case, there will be a need for appropriate enforcement mechanisms and sanctions.

The selection of policy instruments should be based on clear criteria such as environmental effectiveness, economic efficiency, political acceptability, ease of administration, and the incentive they provide for innovation. Effective implementation can be enhanced by a clear allocation of responsibilities, and by using EPR instruments in conjunction with other waste-related instruments such as pay-as-you-throw systems, landfill bans and taxes, bans or restrictions on products/materials and green public procurement. Indeed, the 2001 Manual emphasises that EPR systems should be designed using a mix of instruments that target different points in the product chain: EPR as a policy concept is intended to address the lack of co-ordination that often exists among policies at different points in the product chain.

2.2. Governance of EPRs

Governance refers to the organisation of the EPR system and the roles and responsibilities of the stakeholders involved. Again, the 2001 Manual emphasises that the governance arrangements should be determined as a function of objectives, coverage of the EPR, the instruments used, and context.

There are several key actors in EPR governance systems. While each should have a defined role, the ways in which the various actors co-ordinate or share responsibilities may vary considerably and may also require specification. Decisions on the allocation of responsibility should be made in view of the policy goals, product characteristics, market dynamics, actors in the product chain, and the resources needed to implement the policy. The governance arrangements in developing and emerging economies will generally be quite different from those in developed countries.

  • Given their technical and managerial know-how, the leadership role of producers is fundamental to the success of any EPR. Producers are usually ultimately responsible for achieving EPR policy objectives, whether individually or collectively, and whether through a single or competing PROs.

  • National governments are generally, though not always, responsible for providing the legal framework, as well as for monitoring and enforcement. They can also contribute to the effectiveness of EPR by eliminating conflicting policies and implementing supportive policies.

  • Defining the role of municipalities, particularly vis-à-vis PROs, is often particularly challenging: the establishment of an EPR involves a change in responsibilities between local authorities and producers as well as the definition of new revenue streams. In some cases, municipalities continue to play a role in the collection and treatment of end-of-life products, and in others they may simply oversee the actions of PROs. Municipalities may be required to play several additional roles such as stimulating the recycling market, assisting firms to build appropriate recycling capacity, and facilitating information flows and dialogue among stakeholders.

  • Consumers play an important role supporting the collection of various products and waste streams. This needs to be clearly explained and the return of products made as convenient as possible for the consumer.

  • Retailers can be an important conduit of information to the consumer and bridge the information gap between producers and consumers. They may also be involved in the collection of end-of-life products.

Two studies have recently reviewed experience with the design and governance of EPRs, both with a view to drawing lessons learned and identifying good practices (see Chapter 2 and European Commission, 2014). However, both concluded that it was not possible to identify good practices because of the diversity of goals and situations in which EPR systems operate, as well as the lack of data and comparability of EPR systems. Nevertheless, these reviews, as well as the assessment of trends above, allow several general conclusions to be drawn about how the design and governance of EPR systems could be improved.

First, many of the recommendations regarding good governance identified in the 2001 Manual are still relevant and should be applied more systematically. In particular, the main objectives of EPR systems have not always been as clearly defined as they could or should have been. Similarly, the roles and responsibilities of key stakeholders have not always been delineated sufficiently. European Commission (2014) found that in most of the EPR systems examined, no specific dialogue mechanism had been established which sometimes resulted in contentious relationships among stakeholders.

Second, there appear to be opportunities to improve the environmental effectiveness of EPR systems in various ways. Wide variations in collection and recycling rates suggest that the ambition of some EPR systems could be strengthened. Target-setting is an approach to enhance the effectiveness of EPRs. The establishment of binding targets should be informed by an assessment of costs and benefits as well as consultation with stakeholders. There is also a wide recognition that the environmental effectiveness of EPR systems could also be enhanced by better enforcement (see Box 2.2). The European Commission (2014) suggests that enforcement capacity is lacking in some EU Member States and that unauthorised facilities and collection points are in operation. Inadequate enforcement can undermine not only the effectiveness but also the financial viability of EPR systems. It also fosters the export of hazardous waste.

Box 2.2. Enforcement of EPR obligations

Failure to provide consistent enforcement creates unfair advantages for those who do not meet their obligations and increases the burden on those facing collective targets. Producers, for example, that evade payment of fees to PROs both reduce their own expenses and increase the costs that are borne by other producers. If evasion of fees is extensive, the financial viability of an EPR system can be at risk. Similarly, if collection or treatment service providers operating outside an EPR system do not face the same degree of enforcement as those working within, EPR systems are disadvantaged and the level of services may be reduced. Inadequate enforcement also makes it easier for illegal trade to take place.

Since 2001, registers of producers and accreditation of PROs have become important means of promoting compliance with EPR obligations. Registers provide PROs with the means to compile information needed to set fees and to identify free riders. Accreditation provides governments with a means to ensure that PROs meet specified performance criteria and to monitor their activities.

An enforcement issue specific to EPR arises when a jurisdiction has a single PRO for a given product category. In such cases, the threat to revoke a PRO’s accreditation is less credible than it might otherwise be. In Ireland, this issue has been addressed by requiring PROs to establish a contingency fund equal to approximately one year’s operating cost. In Austria, when a PRO does not comply with the obligation of free take-back, the Ministry of Environment has the ability to organise the collection and treatment of ELVs and charge the costs to the PRO.

The legal authority to impose penalties is typically the task of governmental agencies. In the European Union, there is widespread agreement among stakeholders that member states and PROs should both be responsible for the monitoring of EPR schemes, and should ensure that there are adequate means for enforcement. However, there is less consensus on the division of responsibilities and costs. European Commission (2014) suggests that in some cases, the creation of an ad-hoc, independent authority for surveillance and regulation may be appropriate, and that it could be financed by a tax on PROs.

Sanctions can range from criminal and civil penalties, fees, revocation of the right of a PRO to operate, public disclosure of non-compliant entities (e.g. free-riders) and prosecution. As explained further below, the activities of PROs may also be reviewed by competition authorities, which may require PROs to modify activities that they consider to be anti-competitive.

Source: See Chapter 2 and European Commission (2014), Development of Guidance on Extended Producer Responsibility (EPR), final report.

Finally, the governance of EPR systems should be made much more transparent: this would provide a more effective means for assessing their performance and holding them accountable for their activities. There is a serious lack of both technical and financial data. The reasons for this vary among EPRs but may be due to unclear reporting requirements, the commercial sensitivity of some information, and/or anti-competitive behaviour on the part of the producers concerned. European Commission (2014) suggests that, at a minimum, EPR systems/PRO’s should be obliged to provide information on:

  • their fees

  • the amount of products put on the market by their members

  • the amount of waste collected and treated (reused, recycled, recovered (including energy recovery) and disposed of), so that the final destination of all collected waste is identified.

Where municipalities are involved, they should publish information on their activities and the related costs.

In the case of EPR systems working within a national or supra-national (such as the EU) framework, performance monitoring would be helped if definitions and reporting modalities were harmonised, and some mechanism established to check the quality and comparability of the data.

Updated recommendations on the design and governance of EPRs
  • Fully implement the recommendations on the good governance of EPR systems in the 2001 OECD Guidance Document, particularly concerning the need to establish clear objectives, to specify the roles and responsibilities of stakeholders, and to establish platforms for dialogue among stakeholders.

  • Periodically review the targets of EPR policies and adjust their ambition in line with waste management and resource productivity policy objectives; take account of the costs and benefits of proposed targets and establish them in consultation with stakeholders;

  • Consider extending the scope of EPRs, particularly to cover more environmentally sensitive end-of-life products which are inappropriate for landfill disposal or incineration.

  • In mandatory systems, governments should establish consistent and credible means for enforcing EPR obligations, including registers of producers, accreditation of PROs and appropriate sanctions.

  • Governments and industry should co-operate to establish effective, adequately-resourced monitoring systems; in some circumstances, they may consider establishing an independent monitoring body financed by a tax on PROs.

  • Mandatory EPR systems should be required to report regularly on the technical and financial aspects of their operations; their performance should be regularly audited, preferably independently; to the extent possible, definitions and reporting modalities for EPR systems operating in the same jurisdiction should be harmonised, and a means for checking the quality and comparability of data established; voluntary EPR systems should be encouraged to be as transparent as possible and periodically to undergo independent evaluations of their operations.

  • The sharing of experience among EPRs, nationally and internationally, should be encouraged with a view to improving collection and recycling rates, disseminating information on eco-design, and enhancing the cost-effectiveness of EPR systems.

2.3. Financing, free-riding and orphan products

The 2001 Manual stressed that since producers are best placed to reduce the environmental impacts of their products, EPR policy should provide them with incentives to minimise the related environmental costs. Any remaining environmental costs, including those at the post-consumer stage, should be incorporated into the price of the product, and ultimately paid for by consumers. Responsibility for financing the post-consumer treatment of products should be clarified when the EPR is established.

While the principle that producers should be responsible for the post-consumer treatment of their products is well-established, its application in practice is more problematic. The study of EPR systems in the EU (European Commission, 2014) found that most EPRs covered, partly or fully, the net operational costs. These include the costs for collection and treatment as well as the administrative, reporting and communication costs required for the operation of the systems, minus revenues from the sales of recovered materials. However, the full costs of treating end-of-life products include a broader range of activities including the costs of public information and awareness campaigns, waste prevention actions, and monitoring and surveillance. Many EPRs did not cover this fuller range of costs.

To the extent that the full costs of EPRs are not covered by producers, they fall on municipalities and taxpayers. In France, the aim is for producers to bear 80% of the (optimised) costs of household packaging waste (if the collection rate is 75% or above), with 20% covered by municipalities. On the other hand, in Korea, the fees paid by producers fully cover the collection, treatment and administrative costs. 70%-90% of the fees are used to remunerate recyclers, and 1-5% allocated for information campaigns. In the United Kingdom system for packaging, producers only cover about 10% of the costs, i.e. the difference between the costs of the initial recycling performance (before introduction of EPR) and those required to achieve the EU recycling targets.

In keeping with the Polluter-Pays Principle, producers should pay the full net costs related to the separate collection and treatment of end-of-life products (see Box 2.3). Where municipalities carry out some of the EPRs operations, this will involve calculating the appropriate level of compensation that PROs should provide to municipalities. That said, it should be recognised that it is not always easy to calculate net costs and that they may fluctuate significantly with changes in the price of secondary materials.

Box 2.3. Full cost recovery from producer fees

There is a broad consensus among stakeholder, supported by economic theory, that the full end-of-life costs should be internalised in EPR producer fees in order to apply the polluter-pays-principle. However, there is a debate about how this principle is implemented in practice and in particular about the scope of the costs that should be considered. There are diverging views as to whether littering costs and the costs of waste treatment of EPR products not collected by the EPR systems, but treated as part of mixed municipal waste should be part of the costs to be covered from producer fees. Ultimately the most adequate approach depends on who is best influence these aspects of end-of-life management and, hence, should receive an economic incentive to do so.

For littering some cost sharing between producers and municipalities would seem appropriate as both are able to influence littering. At the municipal level a range of measures can be taken to improve waste collection infrastructure in public spaces, as well as strengthening enforcement measures that discourage littering. In some cases, producers are also able to improve product design so that littering is minimised, e.g. when the element to open a metal can stays with the can rather than being pulled and discarded.

For EPR products treated as part of municipal waste, this would depend on who is responsible for separate collection. If producers are in charge of separate collection these costs should be covered from producer fees so that there is no incentive to diminish collection rates and to ensure that end-of-life costs are reflected in product prices. If municipalities are in charge of separate collection, these costs should be borne by them as they are best placed to improve collection rates.

“Free-riding” is a key challenge for most EPR schemes. Free-riders are those producers who benefit from EPR systems without contributing their share of the costs. The challenge of reducing free-riders generally increases with the number of producers and the length of the product chain. The problem can be acute when the valuable fractions of the waste stream are diverted to other destinations and threaten the financial viability of the EPR system. On the other hand, the cost of the measures required to eliminate free-riders for some product groups may make it not worth trying to entirely eliminate them. The 2001 Manual suggests several ways to address free-riding: keeping fees (and hence the incentive to free-ride) low, peer pressure and strict enforcement with suitable sanctions. However, keeping fees low may not be consistent with the objective of setting producers’ fees at a level that covers the full costs of post-consumer treatment of products. A new issue is related to the large share of online sales and the possibilities for free-riding that arise therefrom. Further work is required to better understand these issues.

Box 2.4. Optimising cost effectiveness – The example of the Japanese Packaging Recycling Act

This Act foresees the payment of a commission by PROs to municipalities corresponding to actual recycling costs. If the municipality provides high-quality well-sorted waste to recyclers, the costs are decreased. Producers reimburse 50% of the difference between the actual and initially estimated costs. This approach based on variable contributions is intended to incentivise municipalities to provide high-quality and properly sorted packaging waste to recyclers, thereby reducing overall recycling costs.

Source: Based on Annex I.

Available information suggests that the scale of “leakage” – EPR systems not capturing all the products they were established to manage – has now reached a significant level for some waste streams (European Commission, 2014). Data in this area are based on estimates and should be treated with caution. Nevertheless, it appears that nearly half of the large home appliances subject to EPR in Japan are estimated to move through non-EPR channels, including reuse through the second-hand product market or collection as municipal waste. More than half of the WEEE collected in Europe probably leaks to improper treatment and illegal exports, or is treated properly but that the amounts treated are not reported. In France, it is estimated that only about one third of WEEE generated on French territory is handled by EPR systems, and between 45% and 75% moves through alternative channels and/or is exported. The growing volume of internet sales creates additional opportunities for leakage and free-riding.

Various approaches have been suggested to deal with leakage. To combat leakage in the form of illegal exports of waste, many environmental authorities are now working more closely with customs authorities. In Finland, producers have priority access by law to designated wastes. In the revised EU WEEE Directive, WEEE formally collected outside the EPR system is included in the calculations of regulatory targets, and non-PRO facilities are required to meet the same environmental standards as the PRO operating in the EPR system. The law on energy transition, recently adopted in France, aims to avoid leakage by forcing professional holders of waste of electric and electronic equipment to sign a contract with an approved compliance scheme, which could enable to better monitor and control the collection and treatment of waste. In Japan, estimates have been made of leakage and an order issued to local governments to regulate informal collectors.

“Orphans” are products subject to EPR requirements but whose producers are no longer in operation (e.g. due to bankruptcy). The challenge is how to equitably cover the post-consumer costs. The costs could be significant in the case of widely-used, environmentally hazardous products (e.g. some oils or chemicals) or virtually zero (e.g. if the main objective of the EPR is to influence how products are designed). Thus the choice of mechanism depends on the nature of the challenge. The 2001 Manual identifies various possible approaches that should be adapted to the specific nature of the challenge involved, including: current producers covering their own costs as well as those of former producers; ADF; fees paid at purchase; last owner pays; and insurance.

Updated recommendations on financing, free-riding and orphan products
  • In mandatory systems, governments should establish consistent and credible means for enforcing EPR obligations, including registers of producers, accreditation of PROs and appropriate sanctions.

  • Governments and industry should co-operate to establish effective, adequately-resourced monitoring systems; in some circumstances, they may consider establishing an independent monitoring body financed by a tax on PROs.

  • The cost of end-of-life treatment ideally should be internalised into the price of the product and paid for by consumers; Producers should be responsible for financing the end-of-life costs of their products

  • Free-riding should be addressed through peer pressure and strict enforcement with suitable sanctions.

  • Orphan products should be addressed by opting for an approach that is adapted to the specific nature of the challenge involved, including: current producers covering their own costs as well as those of former producers; ADF; fees paid at purchase; last owner pays; and insurance;

  • Governments should exchange experience on, and identify ways in which EPR systems can be financed in a sustainable manner; this should include analysis of how risks such as price volatility, leakage, etc. could be managed.

2.4. Trade, competition and EPRs

Since EPR policies impose requirements on products they necessarily have implications for related product and secondary markets. In particular, they may affect competition and trade, either intentionally or unintentionally. EPR policies may affect trade simply as a result of the higher administrative and transport costs faced by importers. The 2001 Manual argued that EPR systems that are compatible with competition and trade policies can be environmentally effective, more economically efficient, and subject to less opposition from the business community.

In order to avoid conflicts with trade policies, the 2001 Manual recommended that EPR systems should involve importers in the design of the system and ensure that proposed provisions are compliant with World Trade Organization (WTO) requirements. Specifically, when EPRs that may be trade-sensitive are being established, importers should be invited to participate and given an adequate comment period, foreign trade associations and the WTO should be informed, and consideration given to providing developing countries with technical assistance to comply with requirements. To ensure compatibility with WTO agreements, the requirements of a proposed EPR should be checked to ensure that they do not discriminate against importers, restrict trade more than necessary to achieve its purpose, prescribe process or production methods, or risk generating surplus recycled materials that may be dumped on international markets.

In order to promote competition in the markets served by EPRs, the 2001 Manual recommends that, where possible, competition authorities should be invited to provide advice on the likely impact on competition of alternative EPR approaches – as well as alternatives to EPR. The potentially anti-competitive behaviour of PROs was highlighted in this regard. By establishing PROs, producers can achieve significant economies of scale and even help smaller companies to stay in business. However, PROs may also provide opportunities for producers to collude illegally in order to eliminate competition among themselves, or to disadvantage their competitors. Thus competition authorities could help:

  • to ensure that PROs do not abuse market power through excessive or opaque pricing or other anti-competitive practices;

  • to avoid regulatory barriers to entry in post-consumer materials markets, including barriers to other PROs entering an EPR market;

  • to require the PRO to contract out collection and recycling services on a competitive basis; to establish contracts that are not unduly long; and to use bidding procedures that are open, competitive and fair.

Since 2001 the size and complexity of EPRs and the related markets have increased. As a result, the potential financial gains for producers, as well as the welfare losses for society, that result from anti-competitive behaviour have become even more significant.

In addition, there have also been a number of decisions taken by courts and competition authorities that have addressed competition policy and EPRs. The number of cases is limited and they do not cover all competition-related issues. In some cases, the criteria used to determine if behaviour is anti-competitive vary among countries. As a result, decisions about competition and EPRs are not fully comparable or consistent across jurisdictions. Nevertheless, the experience gained enables some conclusions to be drawn about better managing trade-offs between competition and environmental policies when designing and implementing EPRs.

This section highlights several types of restrictions to competition in the context of EPR-related markets, based on a more detailed discussion in Chapter 3:

  • Horizontal agreements among competing producers to establish one or more PROs; this includes the potential anti-competitive behaviour of PROs; barriers to entering markets served by PROs; the impact of higher costs when switching providers; and agreements among PROs operating in the same market that may limit competition.

  • Vertical agreements between PROs and suppliers of collection, sorting or treatment services that limit competition.

  • Anti-competitive behaviour in markets for waste treatment and secondary materials, and for products.

2.4.1. Horizontal agreements among competing producers

Horizontal agreements among competing producers to establish one or more PROs is another issue. This section focuses particularly on the advantages of individual versus multiple PROs and the potential barriers to entering markets that are served by PROs.

Individual and multiple PROs

Many EPR systems were initially established with a single PRO operating as a monopoly. Over time, some of these systems were broken up, in some instances following scrutiny of their anti-competitive conduct; in others, in response to competition authorities’ critique of the regulations establishing the monopoly. As a result, an increasing number of EPRs involve multiple rather than single PROs.

The classic arguments against monopolies are that they can extract higher prices and are subject to lower incentives to seek and pass-on cost-savings. Both effects raise the cost of products. There is some empirical evidence that this has been the case with some monopoly PROs. The cost of handling waste packaging in Germany fell significantly with the introduction of competitive tendering of services at the level of PROs and the introduction of competition between PROs. The Norwegian competition authority identified several examples where producer-owned collecting/recycling monopolies incurred excess costs because they could be passed on to consumers, and that this formed part of a pattern of inefficiency.

On the other hand, it has been argued that monopoly PROs may have some advantages in terms of exploiting economies of scale, addressing free-riders and reducing the costs of regulatory oversight. While these arguments have been challenged, establishing a PRO as a monopoly in a start-up phase is a special case. It might be more efficient initially to set up a PRO as a monopoly if its establishment involves high sunk costs, and where there is also uncertainty about future costs and revenues. The European Court of Justice considered that the grant of exclusive rights to a PRO in Copenhagen to process non-hazardous building waste was justified because the establishment of capacity to manage this waste would not otherwise be built. This was considered to outweigh the cost in terms of restricted competition.

There is insufficient empirical evidence to determine the conditions in which a monopoly PRO is more efficient than competing PROs. The arguments for and against monopoly have been considered in different national jurisdictions on the basis of their cost and benefits. However, jurisdictions differ in terms of which costs and benefits should be considered and, hence, on when, or if, a monopoly PRO would be considered acceptable.

Barriers to entry

Barriers to entering a market will tend to reduce competition in that market. Such barriers may be structural or strategic. Structural entry barriers often take the form of high and irreversible costs of entering a market. The high costs may result from the nature of the market itself or a legal requirement. In contrast, strategic barriers are deliberately created or enhanced by the market incumbent. In some cases, it may be difficult to distinguish the two.

An obligation to enter a market nationwide is an example of a structural entry barrier; it increases sunk costs if the best entry strategy, absent the obligation, would be to enter at a small scale, in a limited area. Some jurisdictions have imposed a universal service obligation on PROs, often to prevent new entrants from “cherry picking” the most profitable areas. As the Swedish case illustrates (see Box 2.5), one way around this is to require incumbents to share infrastructure with the new entrants. However, this may not always be possible. In such cases, the benefits of a universal service obligation should be reviewed.

Denying entrants access to “essential facilities” is a strategic entry barrier that has featured in competition cases in PRO markets. Although the definition of “essential facilities” differs somewhat between jurisdictions, the basic idea is that there is something to which access is necessary in order to compete in a market, it cannot be feasibly duplicated, it can be feasibly shared, and it is controlled by a monopolist or a dominant firm.

Box 2.5. Shared collection infrastructure in Sweden

In Sweden, waste packaging PROs were required to serve the entire country. A company trying to enter the market faced significant barriers to establishing collection infrastructure. In rural areas, it was very costly, and in urban areas the incumbent used municipal sites that could not be duplicated. The entrant complained to the competition authority, accusing the incumbent of denying access to infrastructure and abuse of dominance. After consultations with the competition authority, the parties entered into commercial negotiations that led to a solution whereby the two firms shared the collection infrastructure at issue, and shared the costs. This enabled both PROs to offer nationwide service.

Source: See Chapter 4.

A long-term exclusive contract is another example of a strategic entry barrier. This involves one or both parties agreeing to deal in a certain product only with the other party for an extended period of time. The European Commission has ruled against such contracts and required that the duration of contracts be restricted.

2.4.2. Vertical agreements between PROs and suppliers: markets for collecting and sorting waste

Markets for the collection of waste may differ for households and businesses. Economies of population density and economies of scale may result in collection markets for households being local natural monopolies, most efficiently served by a single entity. This is often the case for kerbside collection of waste from households. In contrast, markets for the collection of waste from businesses are generally oligopolies, markets subject to competition from a small group of rivals.

The geographic extent of collection and sorting markets depends inter alia on transport costs and on legal restrictions on trade in waste. Sorting is generally more efficient when it is organised on a larger scale than collection. As a result, bundling these services together may result in less efficiency than managing them separately.

Many PROs procure waste collection and sorting services. Even where it is a monopoly, there can be benefits when waste collection is subject to competition “for” the market. There is evidence that the use of competitive tenders significantly reduces collection costs (see Box 2.6). However, the tender rules and procedures used by PROs can have an important impact on the cost of services they procure. Efficiency is enhanced when procurement is fair and competitive. This means inter alia that incumbents are not given advantages; when potential bidders receive the same information, at the same time, and with sufficient time to prepare their bids; and when a sufficient number of potential bidders submit bids for competition to occur. Contracts should not be too short (costs may not be recovered) or too long (some of the benefits of competition, such as the adoption of more efficient technology, may be lost). In two decisions, the European Commission decided that a duration of three years for contracts between waste packaging collectors and PROs was indispensable.

Box 2.6. Promoting more competitive tendering in Germany

In 2003, a first call for tender by the German packaging PRO, DSD, did not result in effective competition in many contracting areas. In about half the contracting areas, only one bid was received. In these contracting areas, prices were on average 70% higher than the lowest price offered in contract areas where two or more bids were submitted. DSD modified the tender conditions to attract bids from more small- and medium-sized companies. By 2005, the costs of collecting and sorting had been reduced by 20-30% compared with 2003. More recently, the German competition authority has expressed the view that “ensuring the separate tendering of collection [and sorting] services is particularly important. This safeguards that competition in sorting is not distorted”.

Source: See Chapter 4.

2.4.3. Markets for products

Promoting competition in product markets has been an important issue at the interface of competition policy and EPR schemes. Markets for products such as cars or tyres are large, so uncompetitive practices in these markets can have a particularly big impact on economic welfare.

One issue that has arisen in several jurisdictions is the agreement to pass onto consumers the fee charged by a PRO. Even if the fee is “visible”, and legislation specifically requires the fee to be passed on, it may still be viewed as illegal price-fixing. In some instances, small “visible” fees were found to be necessary and not to cause a discernible harm to competition. In others, they were viewed as not necessary to the broader co‐operation agreement and, hence, as anti-competitive.

There are several other concerns regarding the effect of PROs on competition in product markets. First, the PRO may create opportunities for the exchange of information and thereby facilitate price-fixing or other distortions to the product market. Second, if a PRO is a monopoly or dominant, and if it significantly increases producers’ costs, and if the fees constitute a substantial part of producers’ variable costs, then the intensity of competition in the product market could be reduced. Third, recycling fees may be increased to raise consumer prices and the profits of suppliers, or discriminate against some groups, for example foreign suppliers or small suppliers. Finally, concerns about competition may arise when the state provides subsidies or grants exclusive rights.

2.4.4. Towards a better integration of competition policy and EPRs

The OECD Council adopted a Recommendation on Competition Assessment in 2009. Amongst other things it states, in the section on revision of public policies that unduly restrict competition, that “Governments should adopt the more pro-competitive alternative consistent with the public interest objectives pursued and taking into account the benefits and costs of implementation”. This recommendation is relevant when considering possible trade-offs between competition policy and EPRs.

Several issues concerning potential anti-competitive behaviour by EPRs have been discussed by competition authorities but no consensus has been achieved. They merit further consideration:

  • The benefits of requiring the vertical separation of producers, waste collectors and waste treatment firms.

  • Whether requiring collection services to be provided nationwide represents a barrier to entry for new PROs, particularly when sharing of infrastructure is not feasible.

  • Whether the non-portability of financial reserves affects competition.

Updated recommendations to further promote the integration of competition policy and EPRs
  • Competition impact assessments should be integrated into the design of EPR policies, taking account of the 2009 OECD Council Recommendation on Competition Assessment (2009), and the 2005 Council Recommendation on Regulatory Policy and Governance.

  • Competition authorities periodically should issue easily-accessible guidance or information regarding their consideration of EPRs.

  • Agreements to establish a PRO should be assessed by competition authorities within the jurisdiction’s general framework for assessing horizontal agreements. Contracts between service providers and PROs should be assessed on a case-by-case basis within the jurisdictions general framework for assessing vertical agreements.

  • Competition authorities should not distinguish between voluntary and government-sponsored agreements.

  • EPR schemes should allow single PROs only when it can be demonstrated that the benefits (for example the capacity to manage the waste would not otherwise be built) outweigh the costs of less competition; the operations of monopoly PROs should be kept under review and competition encouraged when the benefits of single PROs no longer outweigh their costs.

  • Any restrictions on competition intended to support the introduction of the EPR (such as allowing a PRO exclusive rights to a market) should be phased out as soon as possible.

  • Services such as waste collection, sorting, and treatment, should be procured by transparent, non-discriminatory and competitive tenders. Factors that should be taken into account in this regard include providing for sufficient but not excessive contract duration, sufficient scale to provide incentives for investment, and sufficient scale and level of aggregation to facilitate bidding by all qualified firms.

  • Tenders should not oblige collectors and recyclers to contract exclusively with one PRO. Other possible distortions, such as those that may result from bundling collection together with sorting and processing, should also be assessed.

  • Post-consumer materials should not be allocated in a way that raises barriers to entry or expansion in the product market; for example when material is allocated at below market prices according to historical product market share.

  • PROs, national registers or other clearinghouses should be designed so as to prevent the sharing of confidential market information that could result in anti-competitive behaviour.

2.5. Eco-design

In Chapter 1 there is a section that examines the impact of EPR systems on eco-design. It concludes that while EPR systems have helped to stimulate eco-design in some countries and sectors, their overall impact has been less than originally hoped for. Various proposals have been made and initiatives taken to address this issue.

First, higher fees, as well as ambitious objectives and robust enforcement, will generally strengthen incentives for eco-design. Setting fees at a level where they recover the full cost of the end-of-life management of the products covered by the EPR would better internalise the environmental costs associated with those products and thereby stimulate eco-design. Fees generally leave producers with more flexibility to find cost-effective solutions than regulations. The incentive effect increases as the PRO fee becomes a significant fraction of the production cost, which is the case in some sectors. For instance, in France, the EPR packaging fee is equivalent to about 4% of the sales revenue of packaging producers.

Second, the way in which the PROs of collective systems establish fees can have an important bearing on incentives for eco-design. PROs are financed either on a variable- or fixed-fee basis. Fixed-fees are typically used in PROs for complex goods such as electronic equipment, cars or furniture where it would be difficult to link the fee to the product’s environmental impact. In such cases, it is easier to apply a unit-based fee, but the lack of a link between the fee and waste management costs associated with specific products provides only weak and indirect incentives for eco-design. To address this, some EPRs have introduced modulated fees linked to specific product design features other than weight. For example, the French Eco-Systèmes applies higher fees for mobile phones that do not have a standardised charger in order to discourage excessive production of peripheral devices.1 Emerging technologies such as Radio Frequency Identification (RFID) may provide new opportunities to link fees with environmental impacts and improve cost allocation among producers. However, establishing modulated fees involves additional administrative costs so they should be proportional to the environmental and/or financial benefits. Moreover, modulated fees create winners and losers so it may be difficult for producers to agree on a modulated fee structure. There is also a risk of collusion among producers and the abuse of market power. Thus, it would be prudent for competition authorities to assess the establishment of modulated fees.

Third, the scope of EPRs could be enhanced. Some systems are weakened by exemptions. For example, in France, the printed press is exempt from the EPR for graphic paper even though it accounts for about one-third of this market. Another challenge is the potentially perverse incentives for products that are difficult to recycle: as long as products are “non-recyclable” they are not subject to an EPR and producers may have a perverse incentive not to develop their products so that they become potential subjects of EPR with take-back requirements. Korea has addressed this issue by applying an ADF to products such as chewing gum, disposable diapers, cigarettes, non-packaging plastics and kitchenware.

Fourth, there is scope to promote greater international harmonization of eco-design incentives for some global consumer products such as mobile phones. The challenge here is that whereas EPR systems are organised within (supra-) national or sub-national contexts, some consumer products (and packaging) are designed for the global market. Thus, in the absence of harmonization, individual schemes will provide weak and diverging signals about product preferences to producers. Harmonization can provide more consistent and effective incentives for eco-design. One example is the EC Directive on Restrictions on Hazardous Substances which has induced design changes worldwide thanks to its transparent focus on six hazardous materials. However, the obstacles and costs of achieving harmonization should not be underestimated.

In addition to the stimulus to redesign products that EPR systems are intended to provide, some producers have used EPRs to enhance co-operation to promote innovation (OECD, 2014). In Japan, for example, automobile manufactures have reportedly developed their own “3R evaluation” technological systems as an answer to the End-of-Life Vehicles (ELV) Recycling Law. The aim is to simulate recycling rates and costs, and to assess design improvements that can facilitate recovery. These systems are based on life-cycle-assessments (LCA) that help vehicle designers to improve the recyclability and environmental performance of their products.

The Nordic Waste Group2 is developing new business models for plastic and textiles waste collection and waste treatment with a view to promoting more sustainable supply chains. The Resource Efficient Recycling of Plastic and Textile Waste initiative encompasses six projects including one aimed at developing a region-wide EPR model. The project will suggest innovative business models for the Nordic textile industry that enable more sustainable life-cycles of textiles. The projects were open for procurement last year, and will contribute to further efforts in the Nordic region to develop the recycling of plastic waste as a profitable Nordic industry along the entire value chain.

There is evidence that PROs are increasingly present in research consortiums, for example for improved eco-design of paper. Extending their role beyond information sharing to providing research funds could help to induce more effective eco-design (see Chapter 5).

Updated recommendations on incentives for design for environment
  • Ensure the full costs of end-of-life management are covered by producer fees in order to maximise design-for-environment incentives.

  • Variable rather than fixed producer fees should be applied in collective schemes where this is feasible;

  • Consider the use of innovative approaches such as modulated fees (e.g. according to content of hazardous substances) or the use of new technology that may allow to link fees with end-of-life costs for specific products and improve cost allocation among producers;

  • Enhance information flows from downstream sectors and users to manufacturers with a view to enhancing design for environment.

  • PROs should support R&D efforts intended to improve the eco-design of their products by sharing their experience and, when cost-effective, by providing financial support.

  • International harmonization of the design of globally-traded products should be encouraged with a view to improving their eco-design.

2.6. EPR systems in emerging and developing economies: The role of the informal sector

EPR systems in emerging economies is a relatively new phenomenon that was not covered in the 2001 Guidance. A common challenge faced by emerging and developing countries in applying EPR policies is the absence of well-established waste management systems. These systems as well as important stakeholders such as manufacturers, PROs, municipalities and recyclers that are usually available in developed countries and have potentially significant roles in EPRs are not always available in developing countries. As a result, EPR approaches in these countries generally place a heavier reliance on financial incentives than those in OECD countries. Accordingly, EPR systems in emerging economies make more extensive use of economic instruments such as price support and diversion credits than OECD countries. A further consequence is that regulatory requirements are generally less important. In marked contrast to OECD countries, the role of take-back requirements appears to be so far negligible in many emerging economies, except as a means to reinforce buy-back channels for low-value or non-recyclable materials. Waste in emerging economies has also attracted a large number of actors to recycle end-of-life products with a positive economic value. These informal waste workers are now estimated to be about 20 million (see Chapter 5). While the informal sector is usually relatively small in OECD countries and is frequently associated with interfering negatively with well-functioning formal waste management systems (e.g. by illegally removing high-value products and materials from the waste stream), it often performs useful functions that are not provided by the formal sector in middle-income countries with limited waste management systems (such as collecting valuables and recovering the material from them). When an EPR system is introduced in these countries, it interferes with the livelihoods of informal waste pickerswho will compete for valuable materials.

The informal recycling sector is diverse, heterogeneous and context-specific which makes it difficult to characterise. In some cases, it may operate in the absence of a formal waste management sector; in others, informal workers may compete with it. Figure 2.1 illustrates the complexity of activities that can be involved. About one quarter of informal workers are estimated to be women, and there is a significant amount of child labour. While waste picking can be financially rewarding, it is hard and dirty work, and operators are often willing to accept risks to their health and safety for the rewards. It can also be socially precarious, with workers not covered by social or health protection. Informal sector operations typically involve high levels of working capital and high transaction costs. Unaccountable inventories leave operators vulnerable to theft.

Figure 2.1. Schematic representation of the informal waste sector in emerging economies

Note: MRF is a material recovery facility.

Source: Based on WASTE (2010), Training materials in integrated sustainable waste management, WASTE, Gouda, The Netherlands.

While informal waste pickers can perform useful functions by collecting and sorting waste with positive economic value, there are serious concerns about downstream informal dismantling and recycling which can generate negative economic and environmental impacts. Poor recycling processes usually fail to prevent emissions of hazardous substances resulting in occupational and environmental risks, and are relatively inefficient in recovering valuable material (Akenji et al., 2011; Williams et al., 2013; Romero, 2014). Furthermore, residuals that have no economic value are improperly managed in general and can be discarded or dumped leading to negative environmental impacts (Akenji et al., 2011). The challenge for middle-income countries is to find ways to integrate informal waste pickers and secure the positive contribution they can make, while mitigating environmental impacts from downstream informal waste processing.

Until about 10 years ago, the typical attitude of policy makers to informal waste pickers was that they were social victims who needed “rescuing” from dangerous and socially precarious activities. Accordingly, they were invited – in many cases pushed – to exit waste picking. However, this approach failed to recognise that waste picking provided an important means of livelihood. The employment opportunities available when exiting the sector generally did not come close to replacing the income of a waste picker. As a result, projects to “rescue” waste pickers generally failed and most returned to picking waste when the projects ended.

There is also now recognition that informal waste pickers can have positive economic and environmental impacts including by: reducing the amount of waste going to landfill, providing an alternative, “free” collection service, and helping to reduce collection and disposal costs for municipalities. When taken together with other actors in the informal value chain, there is some evidence that informal systems in emerging economies recover more materials than formal recycling systems when they work in parallel. There are also cases that show how failure to effectively include the informal sector in EPR systems can undermine the efficiency and effectiveness of EPR systems (see Box 2.7).

Box 2.7. Exclusive and inclusive approaches to informal workers: the cases of Bulgaria and Colombia

Bulgaria established an EPR system in 2004. It involved 100% producer responsibility for end-of-life management of packaging waste. The estimated 10 000 pre-existing Informal workers were not consulted in the establishment of the system which effectively aimed to take over their activities, thereby threatening their livelihoods. This resulted in overt and covert conflict between the formal and informal systems. The informal workers undermined the operations of formal system, including by removing materials from drop-off containers that had been set up to collect packaging waste. The operators of the formal system called for the arrest of informal workers and the closure of the centres to which they sold recyclable material (Ministry of Environment and Water, Republic of Bulgaria, 2003; Doychinov and Whiteman, 2013).

Failure to engage the informal sector resulted in the establishment of a highly dysfunctional EPR system. The recycling targets that were set were lower than the amounts that were actually being collected by informal recyclers. Households and businesses preferred to continue working with the established recycling channels. As a result, about 90% of materials continued to flow through informal channels. Since the formal system captured such a small share of recyclable material, unit cost were high and revenues were insufficient to cover even operational costs (ISWA/EXPRA/RDN, 2014).

Colombia provides an example of more inclusive approach. About 20 private sector organisations established CEMPRE as an NGO to promote inclusive recycling. Using member fees, CEMPRE conducts a wide range of activities including: promoting policy and legal reform to protect the rights of informal workers; supporting the establishment and operations of waste picker associations; capacity building and training; facilitating dialogue and co-operation between waste pickers and public authorities; and helping to mobilise finance. Within the framework of a product stewardship system for packaging materials, the city of Bogota pays a diversion credit of USD 50 per tonne to waste pickers selling to authorised junk shops. Authorised junk shops register the quantities of all materials purchased from individual recyclers, and forward this information to the city administration. Junk shops only trade with waste pickers that are members of recognised associations, providing waste pickers with an incentive to join accredited associations. The city administration deposits the diversion credit directly in the waste picker’s bank account. Thus waste pickers must be part of the formal economy in order to receive their credit.

The Colombian system is inclusive but incomplete. Not all producers are members, not all packaging materials are covered, not all waste pickers are members of co-operatives, and many co-operatives and junk shops remain independent and unauthorised. Further analysis is needed to assess how well the system works in terms of diverting packaging waste from disposal to recycling, and on the impacts of inclusive recycling. A national observatory has been established to examine some of these questions.

Source: See Chapter 5 for more detail.

The failure of traditional policies for informal waste workers, and the recognition of the positive role they can play, has helped foster a variety of new approaches to integrate informal workers into formal waste management systems. They include:

  • Rights-based interventions, typically to support groups of waste pickers and their families to claim labour or citizenship rights and to build associations that strengthen this claim.

  • Informal sector integration, sometimes also referred to as inclusive recycling. This involves recognising the role of informal waste pickers, for example through formal contracts or agreements, identity cards, or licensing. This approach may also stimulate the formation of co-operatives and business associations in which informal recyclers are considered as entrepreneurs or enterprises.

  • Formalisation involves providing support to waste pickers to comply with tax laws and business norms, to register as enterprises, and to agree to follow laws and rules. It does not imply any reciprocal measures by the public authorities.

  • Professionalisation and access to financing. This approach aims to support informal recyclers as autonomous micro- or family enterprises which, because of their ethnic, social, or immigration status, have limited or no access to financial and business services. It is primarily demand-driven and focuses on increasing knowledge, capacity, business skills, and access to materials and financing.

  • B2B (business to business) value chain activities. This approach involves value chain support in the form of pre-financing of inventory and/or providing infrastructure and equipment.

Ideally the goal should be to establish arrangements whereby the informal sector is not working against the formal sector, and where safe and viable employment opportunities exist. However, the obstacles should not be underestimated; for example, “cherry-picking” and material theft by waste pickers can undermine the financial viability of the formal waste management sector, and informal recyclers may circumvent regulations regarding the dismantling of products containing toxic substances. Learning lessons from current efforts to integrate waste pickers into formal waste management systems would provide useful guidance for the further development of policy in this area.

Recommendations for integrating informal workers in EPRs in emerging and developing economies
  • The role that informal recyclers play should be recognised: in many emerging economies, they are responsible for most of the materials that are captured, processed and sold in the recycling value chain.

  • Cities in emerging economies should consider how they could best draw on the knowledge of waste pickers and junk shops; they are often the only stakeholders with practical experience, knowledge to maximise recycling under local market conditions, and incentive to adapt quickly to new value chains and market opportunities.

  • Informal recyclers should be invited to contribute their experience and expertise in all relevant public decision making processes. They should be engaged in the design, monitoring and evaluation of recycling and valorisation systems, as well as the definition of quality standards.

  • Producers, city authorities and informal recyclers should work together (experiment) to strengthen, or introduce, upstream separation of recyclables, organics and residuals at the level of businesses and households. Upstream separation provides important support for EPR systems. Downstream activities such as dismantling and recycling are potentially more problematic and authorities need to enforce environmental standards in such operations.

  • Public authorities should work with informal recyclers to collect data on waste generation and recycling rates. It should not be assumed that no recycling is taking place.

  • The insights and ambitions of informal recyclers should be combined with international good practice approaches for integrating informal workers into formal waste management systems, and take full account of relevant health and safety, social protection and financial considerations.

  • EPR systems in emerging economies should avoid becoming involved in the recycling of materials where private value chains are likely to work well. EPR systems provide more opportunities for stakeholders, including informal recyclers, when they address market failures, including: environmentally sensitive waste streams, low-value materials, recyclables difficult to dismantle, or recycling in areas where there are few value chain buyers within reasonable transport distance.

  • Priority should be given to developing business partnerships with informal, and micro and small, recycling enterprises over Public Private Partnership approaches government more than the host community.

  • In developing EPRs, engage local authorities, municipal associations, national governments, regional economic communities, and bilateral and multi-lateral institutions; evaluate, disseminate, and use good practices of partnerships involving informal recyclers to inform public policy and legislation; and use these partnerships and activities to promote recognition of the informal recycling sector.

2.7. Concluding remarks

EPR has become a well-established policy instrument since 2001. If anything, its potential importance has increased with the greater emphasis now placed on policies for resource productivity and the circular economy in recent years.

There is some evidence that EPR systems have achieved their main goal of shifting the burden of treating end-of-life products from municipalities and taxpayers to producers. It is also likely that they have contributed to the decreased share of waste that is destined for final disposal and to increased rates of recycling. On the other hand, they appear to have been less effective in promoting more environmentally-friendly design of products.

However, lack of data, methodological challenges and lack of comparability make it difficult to assess the impact of EPRs with any precision. Equally, it is not possible to identify good practices or the most cost-effective models for EPRs. Nor is enough known about the contribution that EPR has made, and could make, to promoting green growth. Arguably, the single most important recommendation arising from this review is that EPR systems should be more transparent and make available the information that is needed to assess their performance and, thereby, help to identify ways in which they can be more efficient and effective.

Many of the recommendations from the 2001 Manual are still relevant and should be applied more systematically. There are many opportunities to make EPRs more effective including by: increasing their level of ambition; broadening the scope of products covered; better internalising environmental costs; and strengthening enforcement, particularly to reduce free-riding and leakage. Further efforts are particularly needed to strengthen the incentives for eco-design of products. Better eco-design may also be achieved by linking EPRs with broader innovation initiatives and, in the case of globally-traded products, by harmonising environmentally-sensitive design features.

Continued vigilance is needed to ensure that the product markets that EPR systems serve remain competitive. The potential financial gains for producers, and the welfare losses for society that result from anti-competitive behaviour, have increased along with the growth and concentration of the recycling and waste management industries. Lack of transparency increases concerns about anti-competitive behaviour.

The EPR systems being established in emerging economies do not necessarily follow the same models as those in OECD countries. Many focus on products with an economic value. These EPR systems are more dependent on financial transactions, and have fostered the emergence of an informal waste work force that now numbers about 20 million. While new approaches are being applied to integrate these workers into formal waste management systems, the livelihoods of many remain hazardous and precarious.

The global context has evolved significantly since the development of the first EPR policies. New economic powers have emerged in the global economy, product value chains have become more complex and extended across national boundaries, technological changes are altering patterns of communication and consumption, not least due to the internet, and markets for some materials and waste streams have been highly volatile. In such a context, EPR systems will have to continue to evolve if they are to become more effective waste management policy tools and to support the transition to more resource-efficient economies.

The following four chapters present the analysis that was developed to support the development of more up-to-date and policy-relevant guidance. Four issues were examined in more depth. These are: design and governance of EPR systems (Chapter 3); the anti‐competitive behaviour that has been observed in EPR systems, a concern that has increased with the growth and increased concentration of the waste and recycling sectors (Chapter 4); the role of EPRs in promoting more environmentally friendly design of products (Chapter 5); and the operation of EPR systems in emerging economies, particularly the important role played by the informal waste sector (Chapter 6).


Akenji et al. (2011), EPR Policies for electronics in Asia – A phase in approach, Slide presentation IGES,

Chalmin, P. and C. Gaillochet (2009), “From waste to resource: An abstract of world waste survey 2009”,,753,Abstract_2009_GB-1.pdf.

Dempsey M. et al. (2010), “Individual producer responsibility: a review of practical approaches for implementing individual producer responsibility for the WEEE Directive”, INSEAD Faculty & Research Working Paper,

European Commission (2014), Development of Guidance on Extended Producer Responsibility (EPR), final report, %20Report.pdf.

European Environment Agency (2011), Earnings, Jobs and Innovation: The Role of Recycling in a Green Economy, EEA Report No. 8/2011,

Menikpura, S.N.M., A. Santo and Y. Hotta (2014), “Assessing the climate co-benefits from Waste Electrical and Electronic Equipment (WEEE) recycling in Japan”, Journal of Cleaner Production, Vol. 74, No. 2014, pp. 183-190,

OECD (2014), “The state of play on extended producer responsibility: Opportunities and challenges”, Issues Paper, Global Forum on Environment, Tokyo, 17-19 June 2014,

Plastics Europe (2015), Plastics – The facts 2014/15, An Analysis of European Plastics Production, Demand and Waste Data,

Romero Victoria (2014), Steps Towards EPR Implementation in Developing Countries, MSc thesis, Imperial College London.

Tasaki, T (2016), “Negative effects caused by shared responsibility and the significance of goal setting in recycling systems”, NIES-CMW Policy Brief N°1, Published 6 April 2016,

Tasaki, T., N. Tojo and T. Lindhqvist (2015), International Survey on Stakeholders’ Perception of the Concept of Extended Producer Responsibility and Product Stewardship, IIIEE and NIES Joint Research Report,

Tojo, N. (2004), Extended Producer Responsibility as a Driver for Design Change – Utopia or Reality?, IIIEE dissertations 2004:2, Lund, IIIEE, Lund University,

Waste (2010), Training materials in integrated sustainable waste management, WASTE, Gouda, The Netherlands.

Williams et al. (2013), “Linking Informal and Formal Electronics Recycling via an Interface Organization”, Challenges, Vol. 4, No. 2, pp. 136-153.



← 1. However, since the increase was only from EUR 0.01 to 0.02 per unit, the effect of this differentiation is probably negligible.

← 2. The Nordic Waste Group works under the Nordic Council of Ministers (including Prime Ministers from Norway, Sweden, Denmark, Finland and Iceland) to support sustainable processing of waste in the Nordic countries and Europe.