Producer responsibility at risk of becoming increasingly ‘dysfunctional’
The concept of extended producer responsibility (EPR) is no longer fit-for-purpose and must be re-examined as businesses increasingly look to utilise their waste streams as a resource.
This is the main message to come out of a recent White Paper issued by INSEAD Social Innovation Centre’s sustainability research group, which calls for a new regulatory framework to take account of shifting market dynamics, particularly around the recycling of e-waste.
EPR, it points out, was developed at a time when waste was primarily viewed as a cost burden that producers should pay for. However increasing commodity prices over the past decade means that EPR does not fit the reality of what has now become a profit-based recycling market.
INSEAD researchers argue that the effectiveness of EPR systems is being disrupted by several factors including volatile commodity prices, uncertain waste volumes, and dynamics relating to competition, regulation and design.
For instance, volatile commodity prices influence leakages of waste outside the EPR system and the value that producers recover from waste. Meanwhile uncertainty persists over the volumes of waste that can be collected by producer responsibility organisations, which in turn limits investment and the planning of future treatment infrastructure for waste operators.
The possibility of unexpected changes in future legislation may also have a negative impact on the level of stability needed by producers and waste operators, while the circular economy agenda is throwing up potential product design changes – this is also leading to uncertainty in terms how much future waste will be available for recycling.
Speaking to edie, Nathan Kunz, a research fellow at INSEAD, said that waste producers had an important role to play in helping to increase the effectiveness and stability of EPR as they were key stakeholders of the system.
“They often see problems in the implementation of EPR before other stakeholders … producers should therefore increasingly work together for promoting their views on EPR towards national authorities and the EU,” he maintained.
Kunz added that businesses should also promote the application and enforcement of recycling standards in national EPR legislation to ensure a level playing field.
“Producers have a strong impact on recycling through the design of their products. They should discuss the design changes that will impact recycling operations with producer responsibility organisations and waste operators in advance.”
Asked what tools could be employed to help drive competition among producer responsibility organisations as well as waste operators, Kunz pointed to more government intervention.
“In member states where it is not yet allowed, legislation should allow competition … moreover, all member states should enforce anti-cartel law to the EPR market, in the same way as they do for normal businesses.
“They should for example oppose a merger that would create a dominant market position for a single producer responsibility organisation or waste operator. Finally, all waste operators should be obliged to work under the same recycling standards.”
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