EPR systems have multiple aims; to change public behavior, increase recyclability and recycling rate and to finance both take back, information and recycling. When EPR is implemented, as in the Nordic countries, it is often a trade-off between effectively assigning responsibilities of producers and to handle the complexity by pragmatic policy design. This report has aimed to gather experiences from the Nordics’ history of EPR as a policy instrument and reflect on learnings for the future of EPR schemes.
Description of current landscape and products covered
When mapping the current landscape for EPR schemes for plastic products, it is interesting to observe how the EPR for packaging can be implemented so differently even in neighboring countries like the Nordics. Mandatory EPR systems in the Nordic countries cover a diverse range of product categories such as packaging, electrical and electronic equipment, batteries, tires, end-of-life vehicles, pharmaceuticals, and single-use plastics. Denmark is the exception as the country has not introduced EPR for packaging until now. It remains to be seen if producer responsibility systems for packaging waste and single use plastic products can improve the collection and low recycling rates.
The countries struggle with different issues related to EPR systems. Iceland for example, has focused on a system with minimum administration, but cannot influence the design of products as it is not possible to differentiate fees in the current fee system. In Finland, increasing the scope to cover all producers could become difficult, with the current level of administration already being higher than some smaller producers can handle. Clarity is key, as seen in the Norwegian example where vague producer definition has caused uncertainties. The roles and responsibilities of all actors must be very clear and well communicated, i.e., through guidelines from the responsible authorities and well-designed reporting systems.
Theory and obstacles
In theory, the main objective of extending producers responsibility is to lower societies’ cost of managing waste. Since the traditional way of managing household waste lack incentive to alleviate waste in the long run, it tends to increase the volume of waste and their costs. The environmental problems with household waste may be described as a collection of all environmental problems that are not solved upstream in the economy. Furthermore, full circularity is impossible, and some waste is inevitable. In most cases, the responsibilities producers take for waste is financial and often, there are also informative requirements. Thus, how EPRs are implemented, as in the Nordic countries, can be summarized by a combination of Take-back-policies (TBP), Advanced Recycling Fees (ARF) and information obligations. TBPs, as part of EPR schemes, can potentially be efficient to prevent waste by increasing recycling but it depends on how it is financed.
In many countries, including in the Nordic countries, the level of these fees is determined to cover costs for recycling or other waste management. The costs for recycling are not necessarily equal to the cost of reaching the set targets. Oftentimes, the latter may include investments in new technologies or infrastructure. This may introduce counterproductive incentives as producers’ costs for recycling depend on the volume of material recycled, and accordingly, the economic incentive in the market is to keep the recycling volume as low as possible.
Learnings from the Nordics
In any case, a number of learnings can be drawn from the Nordics’ experience of implementing EPR systems that have partly led the way for their own forthcoming changes in regulation but could also serve as useful recommendations for countries about to introduce EPR.
It is evident that systems focusing on a single product type, like PET bottles or silage plastic, has higher recycling rates than EPR for packaging. This seems to be true regardless of the systems being mandatory or voluntary, connected to less material complexity or their reliance on material quality standards such as rPET. Although it is not feasible to introduce separate systems for each packaging type, more stringent design requirements could be helpful, in combination with development of material quality standards for more types of recycled plastics. If design requirements, reporting requirements and fee models could also be harmonized in the EU, this would ease the administrative burden on producers and possibly prevent free riding to some extent. Differentiated fees also drives higher recyclability, as seen in Sweden.
To reach recycling targets it is important to support sorting and recycling capacity, both on national and EU level. Transforming from a history when most packaging waste was exported outside the EU, the capacities are slowly building up to be able to handle the volumes generated. Higher sorting and recycling capacity is also important for assuring that future quota obligations for recycled content in new packaging can be met. Both mechanical and chemical recycling technologies are needed, and measures should be taken to ensure that they complement each other in a good way, achieving the best overall recycling rate on system level.
Better enforcement of the regulation and sanctions for non-compliance is also desirable, but often difficult for authorities to manage due to limited resources. A mandatory producer register is a first positive step in the right direction. This can hopefully help to quantify the free rider problem and provide means to deal with it. Monitoring statistics of volumes that are put on the market versus collected and recycled is also important to ensure that producers take their responsibility and that targets can be fulfilled over time.
Finally, to truly be a powerful, multifunctional tool and promote plastic circularity, EPR systems should be combined with other policies and considered a complement to them. Such policies could be weight differentiated waste fees for households that could incentivize waste reduction among consumers. Landfill bans and high landfill taxes are useful to make sure that plastic waste does not end up in the wrong place. EPR is a complement to these policies.
Moreover, in order for these policies to work as a policy package, it is crucial that all flows of waste product are targeted. The force of each of the policies should be balanced so that the sources of waste creation will bear the same responsibility regardless of which flow their waste is generated within. If not, material could avoid the regulation through the product flows that are less or not regulated. This is an important prerequisite for the efficiency of EPR systems. As such, and because of the complexity of waste streams, EPR should perhaps not be viewed as the main instrument to reduce waste, but rather as a complement to policy instruments that are more directly targeted toward the sources of waste generation.