Extended

Producer
Responsibility
Policy Highlights

Guidance for efficient

waste management
1 . OECD POLICY HIGHLIGHTS - Extended Producer Responsibility

Extended producer responsibility

Updated guidance for efficient waste management

Since the late 1980s, the concept of “Extended Producer outlined possible options, and analysed some of their
Responsibility” (EPR) has become an established pros and cons.
principle of environmental policy in an increasing range
of countries. It aims to make producers responsible for Since 2001, the number and variety of EPR systems
the environmental impacts of their products throughout have increased significantly. Thus, a review of recent
the product chain, from design to the post-consumer experience is timely, particularly in view of the
phase. It was hoped that this would alleviate the burden support that EPR could provide to enhancing resource
on municipalities and taxpayers for managing end-of- productivity and the circular economy, issues that are
life products, reduce the amount of waste destined for now high on the environmental policy agendas of many
final disposal, and increase rates of recycling. countries. In its first part, this report provides updated
Guidance on EPRs, building on the 2001 Manual and
OECD provided a platform for countries to exchange in view of the developments and lessons learnt since
experience, and, in 2001, produced a Guidance Manual then. In the second part, the report focuses on four
to support the development of EPR systems. Given the selected challenges within EPR systems: the design
diversity of approaches, the Guidance Manual did not and governance of EPR, competition issues, design for
aim to prescribe how EPR systems should be set up. environment incentives and the role of the
Rather it provided some general guiding principles, informal sector.

Figure 1. Cumulative EPR policy adoption globally, 1970-2015

350
Number of policies adopted

300

250

200

150

100

50

0
1970 1980 1990 2000 2010

Year
Source: OECD (2013), What have we learned about extended producer responsibility in the past decade? –
A survey of the recent EPR economic literature, Paris.
 POLICY HIGHLIGHTS
OECD POLICY HIGHLIGHTS - Extended Producer Responsibility . 2

Evolution and impacts of EPRs

A recent survey identified about 400 EPR systems

currently in operation. Nearly three-quarters were
established since 2001. Legislation has been a major
driver, and most EPRs appear to be mandatory rather
than voluntary. Small consumer electronic equipment
accounts for more than one-third of EPR systems,
followed by packaging and tyres (each 17%), end-of-
life vehicles, lead-acid batteries and a range of other
products. Various forms of take-back requirements
are the most commonly used instrument, accounting
for nearly three-quarters of those surveyed. Advance
disposal fees (ADF) and deposit/refund account for most
of the rest. While in some cases individual firms have
established their own systems, in most cases, producers
have established collective EPR systems managed by
Producer Responsibility Organisations (PROs).

Figure 2. EPR by product type, worldwide

Other Packaging
18% 17%

Tyres
18%
Electronics
35%

Vehicles/auto
batteries
12%

Source: OECD (2013), What have we learned about extended

producer responsibility in the past decade? –
A survey of the recent EPR economic literature, Paris.
 3 . OECD POLICY HIGHLIGHTS - Extended Producer Responsibility

Assessing the impacts of EPR systems is difficult for

several reasons: a considerable lack of data; analytical
difficulties in distinguishing the impact of EPR systems
from other factors; and the wide variety of EPR systems
which limits comparison among them. Bearing in
mind these caveats, there is evidence that in some
countries (e.g. France), EPRs have helped to shift some
of the financial burden for waste management from
municipalities and taxpayers to producers, and to reduce
the public costs of waste management. In addition, it
D I D Y O U K N O W? seems likely that EPR systems have contributed to the
decreased share of waste destined for final disposal and
EPRs are now widely used with to the increased rates of recycling recorded in many
around 400 such systems in OECD countries. However, progress in these areas varies
operation worldwide very widely among countries, suggesting that there is
scope in many countries to improve their performance
by emulating the best performers. EPR systems are
also likely to have contributed to the emergence of the
multi-billion dollar waste and recycling industry, and the
related investment and employment opportunities. On
the other hand, the consensus appears to be that while
EPR systems have contributed to waste prevention (e.g.
eco-design) in some countries and some sectors, they
are seldom sufficient to serve as the triggering factor.

Figure 3. Trends in municipal solid waste management in the OECD

Decoupling trend, municipal waste generation versus GDP, Municipal waste management, recovery and disposal rates,
1990-2014 1990-2014

Municipal waste Landfill GDP Material recovery Energy recovery Disposal

Index 1990=100 Amounts in kg per capita
180 700
634 632
160 593 604 588
600 586
140
500
120

100 400

80
300
60

40 200

20 100
0
0
1990 1995 2000 2005 2010 2014

Note: Municipal solid waste only covers packaging and e-waste, but other types of waste covered by EPR, such as ELVs and
tyres are not reflected in these numbers.
Source: OECD (2016), "Municipal waste generation and treatment", OECD Environment Statistics (database).
 POLICY HIGHLIGHTS
OECD POLICY HIGHLIGHTS - Extended Producer Responsibility . 4

Guidance and
recommendations

The OECD defines EPR as an environmental policy

approach in which a producer’s responsibility for a
product is extended to the post-consumer stage of a
product’s life cycle. In practice, EPR involves producers
taking responsibility for collecting end-of-life products,
and for sorting them before their final treatment,
ideally, recycling. EPR schemes can allow producers
to exercise their responsibility either by providing the
financial resources required and/or by assuming the
operational and organisational aspects of the process
from municipalities, e.g. in the case of packaging.
They can do so individually or collectively through so-
called producer responsibility organisations (PROs).
Furthermore, EPR can be voluntary or mandated by
law, and they can be implemented through a variety of
instruments, such as product take-back requirements
or economic and market-based instruments (e.g.
deposit-refund systems or advance disposal fees), or a
combination of these.

While generally successful, the performance

of EPR can be further improved, including by
increasing costs effectiveness and
their impact on product design

Many of the recommendations regarding the good

governance of EPR systems identified in the 2001
OECD Guidance Manual are still relevant and should
be applied more systematically. For instance, the 2001
guiding principles for EPRs state that these systems
should provide producers with incentives to change
product designs; stimulate innovation; take a life-cycle
approach; clearly define responsibilities; chose flexible
policy instruments adapted to the particular product
and waste stream; improve communication across the
product chain; comprise a communication strategy; use
stakeholder consultation (including local governments);
consider both voluntary and mandatory approaches; be
based on comprehensive analysis of the products and
waste streams under consideration; undergo periodic
evaluations; and avoid economic dislocations.

The 2001 Guidance Manual also provided more specific

recommendations on a range of issues, the key elements
of which have been integrated with the more recent
experience.
 5 . OECD POLICY HIGHLIGHTS - Extended Producer Responsibility

Design and governance of EPR

The design and governance of EPR are crucial to their The updated OECD guidance focuses
performance. The issues range from target setting and on the design and governance of
monitoring & enforcement, to free-riding and financing. EPRs, competition issues, design for
environment incentives and the
role of the informal sector
• The targets of EPR policies should be periodically
reviewed and adjusted, taking account of changes in
market conditions and technology. Promote the integration of
• In mandatory systems, governments should competition policy and EPR
establish consistent and credible means for
enforcing EPR obligations, including registers As the recycling and waste management industries
of producers, official accreditation of producer have grown and become more concentrated, the
responsibility organisations (PROs) and appropriate potential financial gains for producers, as well as the
sanctions. additional costs to society that result from collusion
among producers and other forms of anti-competitive
• Adequately resourced monitoring systems behaviour, have become more significant. Since 2001,
need to be established; the performance of EPR some competition authorities and courts have reviewed
operations should be regularly audited, preferably alleged anti-competitive behaviour within EPR systems.
independently. In the same jurisdiction, EPR systems
should be harmonised to the extent possible, and a • Most attention should be placed on competition
means for checking the quality and comparability of issues in product markets, where the welfare effects
data established. are potentially largest, followed by collection and
sorting markets, recovery and disposal markets, and
• Free-riding, which still is a challenge to many EPR the market of producer responsibility services.
systems, should be addressed through peer pressure
and strict enforcement. • Concerns persist about collusion among producers
and about the potential abuse of vertical
• Governments should identify ways in which EPR agreements between PROs and companies involved
systems can be financed in a sustainable manner. in downstream operations. An important means for
This should include analysis of how risks such as minimising anti-competitive behaviour is to consult
price volatility and leakage could be managed. competition authorities when EPR systems are
being established.

Figure 4. Relationship among markets and actors • Services such as waste collection, sorting, as well as
PROs with operational responsibility material recovery and disposal should be procured
by transparent, non-discriminatory and competitive
tenders.
Product Markets Largest market

• EPR schemes should allow single PROs only when

it can be demonstrated that the benefits (e.g. the
capacity to manage the waste would otherwise not
PRO 5-10% of EPR costs be built) outweigh the costs of less competition.
Markets

50-80% of EPR costs 10-40% of EPR costs

Collection Markets Treatment Markets

Sorting Markets
1

Note: In some countries collection, sorting and sometimes recycling is the

responsibility of municipalities. As a consequence they decide with whom
to contract for these services not the PROs.
 POLICY HIGHLIGHTS
OECD POLICY HIGHLIGHTS - Extended Producer Responsibility . 6

Incentives for design Integrating informal workers in

for environment EPRs in emerging and developing
Better internalisation of end-of-life costs and stricter countries
enforcement would also strengthen incentives for
improving the eco-design of products and packaging. Since 2001, EPR systems have been established in many
Setting fees at a level where they recover the full cost of developing and emerging economies. In contrast to the
the end-of-life management of the products covered by most developed OECD countries, there are large numbers of
the EPR is therefore a key measure. informal waste workers engaged in recycling; an estimated
20 million globally. Waste picking is often hard, dangerous
• Ideally, producer responsibility would be and socially precarious. While there are serious concerns
implemented at the level of individual producers, about downstream informal dismantling and recycling
but due to the significant economies of scale and which can generate negative economic and environmental
scope that are often available, most EPR systems impacts, the potentially positive contribution of informal
apply collective producer responsibility, which waste collection and sorting activities is increasingly
dilutes incentives for eco-design. recognised.

• Where possible, producers’ fees should therefore • EPR systems need to find ways for informal operators
be more closely linked to the actual end-of life to work with rather than against formal waste
treatment costs of their products, for instance management systems, unless there is a risk that they will
through the use of variable (e.g. weight-based) be undermined by them.
rather than fixed (e.g., unit-based) fees, and/or
modulated fees that differ according to specific • However, this is not always easy or possible, and it will
design features that make products more easily be important to draw lessons from current initiatives to
recyclable. guide further policy development in this area.

• In the case of globally-traded products, better The global context has evolved significantly since the
eco-design incentives could also be achieved by development of the first EPR policies. New economic powers
harmonising environmentally-sensitive design. have emerged in the global economy, product value chains
have become more complex and extended across national
boundaries, technological changes are altering patterns
of communication and consumption, not least due to the
internet, and markets for some materials and waste streams
have been highly volatile. In such a context, EPR systems
will have to continue to evolve if they are to become more
effective waste management policy tools and to support the
transition to more resource-efficient economies.
For further reading see the following OECD report on which these
Policy Highlights are based:

OECD (2016), Extended Producer Responsibility: Updated Guidance for

Efficient Waste Management, OECD Publishing, Paris.

DOI: [Link]

For more information:

[Link]/environment/waste/

Contact:
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This project is co-funded by

the European Union

September 2016