The producer compliance scheme European Recycling Platform (ERP) has supported global business school INSEAD in conducting a study on the future of extended producer responsibility (EPR).

The report’s ‘Extended Producer Responsibility: Stakeholder Concerns and Future Developments’ white paper, released last Friday (publication on 14 February), coincided with the deadline for EU member states to transpose the Waste Electrical and Electronic Equipment (WEEE) Directive recast into national legislation. This directive outlines that from 2016, member states must collect 45 per cent of the weight of EEE placed on their markets, rising to 65 per cent of EEE placed on the market (or 85 per cent of WEEE generated in their market) in 2019.

Undertaken to ‘explore recent advances’ and the ‘future of EPR’, it is hoped the report will provide a ‘timely and interesting view on the future of extended producer responsibility’.

EPR not achieving what it could

By analysing responses to ‘a series of interviews with stakeholders – local and national government, producer compliance schemes, producers and trade associations’, INSEAD found that while EPR has achieved its main objectives of ‘making producers financially responsible for the collection and recycling of their products, and diverting waste products from landfills’, it has missed other goals, such as ‘Incentivising producers to design their products for easier recycling at end of life’.

Further, it found that EPR has created a ‘high administrative burden’ on producers, partly due to the lack of ‘harmonisation’ across national EPR laws.

INSEAD added that EPR is outdated, as it has not adapted to the fact that ‘WEEE has shifted from being considered as a cost burden to becoming a potential source of revenue’, thus developing a new market of private operators who collect and process waste for profit.

It reported that there were five factors that currently ‘limit or disrupt the stability and effectiveness of EPR systems’. These are:

• commodity dynamics: Volatile commodity prices influence leakages of waste outside the EPR system and the value producers recover from waste;
• volume dynamics: Uncertain volumes of waste collected by producer responsibility organisations (PROs) limit planning of future investment for waste operators;
• competition dynamics: Variations in the level of competition between PROs may change the efficiency of EPR markets;
• regulatory dynamics: The possibility of unexpected changes in future legislation may negatively impact the stability needed by producers and waste operators; and
• design dynamics: Potential product design changes lead to uncertainty in terms of waste to be recycled in the future

The report reads: ‘The legislative misfit, dynamic commodity prices, uncertain volumes of waste, market distortions and uncertainty about future product designs are some of the sources of instability that have led to the situation we observe today.

‘Indeed, producers and waste operators do not yet face the stable environment they need to operate efficiently in the long term, which significantly reduces the effectiveness of EPR. From a market formation perspective, this market clearly needs more maturity.’

INSEAD concluded that in order to ‘drive the efficiency of EPR up and costs down’, the following actions could be taken:

• national authorities should for ‘ensure that markets remain open to allow and improve competition between (PROs) as well as waste operators’;
• PROs operating in a competing environment should ‘carefully consider their competitive positioning and make sure they select a viable strategy’ – i.e smaller PROs could differentiate themselves from ‘pure cost competition’ by contributing to increasing long-term stability for producers;
• the EC should introduce a set of simple, harmonized report requirements and ensure such legislation is ‘flexible enough to adapt to future market moves’;
• stakeholders should fix details in a flexible regulatory framework. For example, some member states ‘may mandate use of the WEEELABEX or CENELEC treatment standards (which are flexible enough to be updated to reflect waste management requirements and targets over time)’.

Recycling milestone

ERP supported INSEAD in developing this report in celebration of it recycling two million tonnes of WEEE in its eight years of operation.

According to ERP, this has:

• saved nine billion kilowatt hours (kWh) of primary energy, ‘enough to power the whole of Luxemburg for a year’;
• prevented the emission of 21.7 million tonnes of carbon dioxide through the recovery of raw materials;
• prevented the release of 3,000 tonnes of ‘ozone depleting substance’; and
• recovered 16 tonnes of gold and 130 tonnes of silver.

Chief Executive of ERP Europe, Umberto Raiteri, said: “We are delighted with our two million tonne collection achievement to date, we therefore took this opportunity to support INSEAD with their research into the future of extended producer responsibility.

“ERP has worked hard to ensure that the regulatory environment provides the best possible conditions for all stakeholders to reuse and recycle electronic waste. We are now looking to the future and to building the right conditions that will ensure many more million tonnes of WEEE are treated safely and effectively.”

The company’s first major milestone of one million tonnes was reached three years beforehand in July 2010, five years after its inception.

Founded in 2002, ERP was the ‘first pan-European organisation to implement the EU’s regulation on the recycling of WEEE’ and now manages a consolidated network It recently partnered with Israeli company Ecology to launch a new scheme to help producers and importers in Israel manage waste batteries and WEEE.

Read the ‘Extended Producer Responsibility: Stakeholder Concerns and Future Developments’ report.