EPR+: Mandatory and voluntary mechanisms for financing the circular economy for plastics and packaging

Online • 21. September 2021

EPR+: Mandatory and voluntary mechanisms for financing the circular economy for plastics and packaging

The Ellen MacArthur Foundation and PREVENT Waste Alliance hosted a WCEF 2021 side event on Tuesday the 21st of September – moderated by Anni Schleicher, Deputy Editor at PackagingInsights, and with opening remarks by Christina Laun from the German Federal Ministry for Economic Cooperation and Development. More than 160 people followed the online debate.

Collecting, sorting, recycling and disposing of waste is a costly endeavour. For many municipalities, the costs are higher than the money that can be made from selling recycled materials. This is a “challenge for many cities in low- and middle-income countries” in particular, Christina Laun described at the start of the event. Extended Producer Responsibility (EPR) is an environmental policy approach, based on the ‘polluter-pays’ principle, in which whoever introduces packaging to the market is responsible for the financial cost of their products after they become waste.

In June the Ellen MacArthur Foundation published a position paper on EPR as “a necessary part of the solution to packing waste and pollution”. The paper maintains that “mandatory EPR is the only proven and likely way to provide funding that is dedicated, ongoing, and sufficient”.

Panelist Roan Snyman, sustainability manager for South Africa-based retailer Pick n Pay, stated: “Many companies have made big commitments to reduce packaging, use recycled content, and to be accountable, but coordinated and scaled impact will be difficult to achieve without some form of EPR.” Indeed, more than 100 businesses have endorsed the call for the implementation of EPR for packaging worldwide. Fausto Tazzi, CEO of La Vie – Nestlé Waters Vietnam, acknowledged: “A real paradigm shift took place in the industry. Environmental responsibility is now vital to stay on the market”.

In Vietnam a draft decree on EPR is currently under discussion. Dr Fanny Quertamp, senior advisor for Expertise France in Vietnam, shared: “The project Rethinking Plastics supports the elaboration of the EPR decree and the dialogue with the private sector through a national multi-stakeholder platform.” Details still under discussion are among others the financial contribution formula or the list of product and recycling specifications. Fausto Tazzi who is also the Vice-Chairman of the Packaging Recycling Organisation Vietnam (PRO Vietnam) -a voluntary EPR initiative counting of 19 both multinational and local companies- added: “At this point, the private sector can make a difference: It has the relevant know-how on packaging, not only plastics, also glass, metal, etc.”

However, “producers cannot solve the issue alone”, he underlined. Fanny Quertamp elaborated “the governance and capacities at the municipal level have to be improved”. For this, the EPR Toolbox developed by PREVENT is a “wonderful tool” containing factsheets, country examples, and frequently asked questions, has been translated into Vietnamese. The state of EPR in South Africa is different, Roan Snyman explained, “the country is moving into mandatory EPR at the moment after a long time of voluntary EPR”.

EPR is a complex mechanism that is not without its difficulties to introduce. The process can take years if not decades. As a quicker remedy for the underfinanced waste management in many parts of the world, plastic credits are emerging as another mechanism to finance the management of plastic waste.

Dr. Henning Wilts, director for circular economy at the Wuppertal Institute for Climate, Environment and Energy in Germany, explained: “Plastic credits are no alternative to EPR, but could be a good complementary approach in areas where no full EPR system is established.” Henning Wilts is part of the PREVENT’s working group on plastics in which PREVENT members discuss lots of open questions such as “what are the main requirements for plastic credits to be successful?”.

All panelists agreed, with increasing amounts of waste, just improving the management and recycling of waste is not enough. ”Eco-modulated fees for EPR could make it more economically attractive for companies to design recyclable packaging”, Henning Wilts resonated. He called for “specific targets for waste prevention” to complete the picture towards a full circular economy. Only then we can tackle the “triple planetary crisis of climate change, biodiversity loss and pollution” as pointed out by Christina Laun in her opening remarks.