What should producer responsibility reform look like?

The government consultation on extended producer responsibility (EPR) for packaging is ongoing, with the potential to revolutionise how the management of our waste packaging is organised and funded.

Businesses have until 13 May to respond to the consultation, and conclusions so far seem to suggest that the government’s proposals for new EPR models are “commendable” but not quite up to scratch.

Reforms to producer responsibility in the UK were a highly anticipated element of the Resources and Waste Strategy, published in December 2018. The government has proposed moving to a ‘full net cost’ system whereby packaging producers pay the entire cost of managing their packaging at end of life.

This would cover the collection, transporting and sorting of waste packaging for recycling, the disposal of non-recyclable packaging in residual waste, the clean-up of littered items and the education of consumers on what to do with their used packaging. Currently, UK packaging producers only pay around 10 per cent of these costs, with the rest of the financial burden falling on cash-strapped local authorities.

EPR is one of four key consultations that came out of the Resources and Waste Strategy; the government is also consulting on the consistency of kerbside collections, a deposit return scheme for beverage containers and a tax on plastic packaging with less than 30 per cent recycled content.

The government proposals for EPR governance

The government consultation document sets our four models for EPR governance (how a new EPR regime for packaging should be organised). These are:

Model 1: Enhanced near-to-business as usual – this is based on the current system of compliance schemes and would require all obligated producers to register with a compliance scheme, paying modulated fees for different types and quantities of packaging. Compliance schemes would enter into arrangements with local authorities and make payments to them for the management of household packaging waste.
Model 2: Single not-for-profit producer scheme – a single organisation would bid for management of the overall EPR scheme and all obligated producers would need to register with this organisation. This would support a ‘more coherent collection infrastructure for packaging waste’, according to the consultation document.
Model 3: Separate scheme for household/household-like packaging and commercial/industrial packaging – two organisations would operate in tandem, one for household packaging waste and one for commercial and industrial waste. Producers could either register with these organisations or pay their fees to a compliance scheme acting as a middle man.
Model 4: Deposit-based government managed scheme – this would see obligated packaging producers pay deposits/fees to a scheme administrator for their packaging, varying by material. They would be able to reclaim deposits based on how much packaging they recycled, incentivising the use of recyclable materials.

Ecosurety’s proposed alternative model

Compliance scheme Ecosurety, which helps producers of packaging and other waste meet their producer responsibility obligations, has launched its own ‘Centralised Competition’ model for EPR. Robbie Staniforth, the company’s Head of Policy, explained: “Two months of cross-industry discussions have revealed though commendable in ambition, none of Defra’s four models for future EPR governance offer the right blend of characteristics.

“The objective to our Centralised Competition model is to provide a realistic and equitable framework under which future EPR governance can operate. It delivers on government ambitions, minimises risks for cross-industry stakeholders, and – critically – balances the needs of the industry with producers and consumers.”

Ecosurety claims that its Centralised Competition model combines the best aspects of the four government proposals but mitigates their individual risks. The Ecosurety model would preserve the element of competition between compliance schemes, as in Model 1, to encourage lower costs for producers. However, it would introduce a Packaging Management Organisation (as in Model 2) to oversee the entire system and to hold compliance schemes to account.

Fee modulation and funding for local authorities would both be centralised under the Packaging Management Organisation so that packaging is treated consistently and all councils receive adequate funding. In addition, the organisation would provide strategic direction for communications on recycling, while compliance scheme would be responsible for investments to develop end markets for recyclate.

This model would therefore split responsibilities between the Packaging Management Organisation and compliance schemes, rather than (as in Model 2) having a single management organisation acting without compliance schemes, which Ecosurety claims would risk inefficiencies ‘due to lack of experience and huge size’.

For more information about Ecosurety’s proposal, visit the company’s website.

SUEZ: Government’s four models are “not the only option”

Waste management company SUEZ recycling and recovery UK previously put forward its own ideas on EPR for packaging, publishing ‘Un-packaging Extended Producer Responsibility’ in September 2018, which details 10 fundamental principles for an EPR regime. The company has now released a follow-up report, which sets out its response to Defra’s proposals.

Technical Development Director Stuart Hayward-Higham told Resource: “We agree with Ecosurety that people should not be constrained into thinking that the four governance models are the only options.

“We don't think any of the four governance models are ideal and favour ourselves a hybrid model. Some elements of the models are difficult to achieve or potentially conflict (picking the best from each governance system is what we think works).”

SUEZ states that none of the government models proposed support all of the 10 EPR principles that were set out in the company’s original report – although Model 4 (the deposit-based scheme) appears to tick the most boxes. ‘We think the deposit-based mechanism in Model 4 is the best to drive performance and common objectives across the system,’ the report states.

The hybrid scheme proposed by SUEZ would see the benefits of Model 4 combined with the elements of registration, payment and control from the other three models.

Hayward-Higham added that EPR could not be assessed without thinking about Defra’s other waste and recycling consultations: “We also think people need to understand the interactions between the policies being delivered and not just look at each one in isolation. Thus EPR needs to be designed in conjunction with the other policies like DRS, tax and collections. This area was not clear to me from the Ecosurety review.”

You can download and read the assessment in full on SUEZ’s website.

Deposit-based scheme ‘likely to create another PRN system’

Commenting on SUEZ’s publication, Ecosurety stated: “There are many similarities between their thinking and ours, which may make Defra’s job a little easier once the consultation closes. Making sense of the responses they receive to these consultations is never an easy job so if industry can align, all the better.

“Our only minor concern is how highly the deposit-based government managed scheme (Model 4) rated against SUEZ’s own criteria. We do not believe a redeemable deposit, managed by HM Treasury, is the right road to go down. The mechanism for redeeming this deposit is likely to create another version of the current PRN system with similar failings to those which Ecosurety have tried to change in recent years.

“We’d like a truly revolutionary system that moves away from evidence note trading, forcing producers and compliance schemes to have a truly strategic partnership with the reprocessors they fund to increase recycling innovation and infrastructure in the UK.”

Michelle Carvell, COO of Lorax Compliance, also commented: “In terms of an alternative EPR, competition between these systems can have both advantages and disadvantages. While it can help keep costs slightly lower, it can also have a less than positive effect on collection rates. Indeed, countries such as Belgium have a monopoly system and some of the highest collection rates in Europe.

“Ultimately, for EPR to be successful in the UK, it’s vital that government provides enough funding to increase consumer engagement, re-educate the public and create harmonised recycling processes across the country.”