European Commission

Our Client

SUMMARY

We’ve been talking about the circular economy for a long time – but there’s still a way to go before it becomes a reality. Principally, one main barrier to creating a circular economy is the cost of more environmentally friendly products – especially as countries around the world face ongoing financial challenges.

Enter Extended Producer Responsibility (EPR): 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 [OECD]. Essentially, it shifts financial responsibility for a product’s waste management away from taxpayers, and towards producers – which also incentivises the design of more circular products.

As this concept has become more we established what best practice looks like for EPR in the EU popular in recent years, Eunomia has been at the forefront of recommending how EU member states, industry bodies, and organisations create and implement EPR schemes. Our expertise has been vital to overcome some major challenges along the way.

Until recently, the design and the effectiveness of EPR schemes varied hugely across countries and sectors – and bodies like the European Commission recognised that this needed to change. By bringing together a team of Eunomia’s policy experts, , on behalf of our client the European Commission, and developed the principles for a truly effective EPR scheme – recommendations which have since been widely cited.

We have since carried out similar work with a focus on the textiles industry for Changing Markets Foundation and the European Environmental Bureau, Policy Hub, and DEFRA. With EPR firmly on the agenda as we strive for a truly circular economy, we will continue to build and share our EPR expertise

While EPR had for years been widely applied for packaging and a range of product types across EU Member States – from electricals and electronics to batteries – the design, and thus the effectiveness of the EPR schemes varied hugely.

That’s why in 2018, Article 8a was introduced to the EU Waste Framework Directive. It set out a number of minimum requirements for EPR schemes, to ensure that:

Producers pay no more than is necessary for a cost-effective service
All producers are treated fairly, with a particular emphasis on ensuring that smaller producers receive equal treatment
The potential of ‘modulating’ (varying fees to incentivise improved product design) is applied effectively

As Member States have flexibility in how they meet the requirements of a Directive, our clients the European Commission identified a need to publish guidance to ensure Article 8a and its commitment to a more circular economy was followed through in practice. Through a competitive process, Eunomia was selected to develop recommendations for guidance.

Our first step was to bring together a team of policy experts who could look at existing approaches applied in EPR schemes, and understand their relative strengths and weaknesses, and identify elements that might be considered to represent best practice. As part of this we engaged with a wide range of stakeholders including producers, EPR schemes, recyclers, Member State representatives and NGOs to gather their views on existing practices.

We then worked to develop a set of core underpinning principles for effective EPR. In this, we put considerable focus on two things: firstly, the importance of harmonisation across Member States – to minimise the administrative burden for producers operating in multiple countries, especially smaller producers with fewer administrative resources.

Secondly, we focused on maximising the potential effectiveness of fee modulation. We argued that aligning producer reporting requirements and frequencies would make for a solid foundation for change, while also tackling the problem of ‘free-riding’ – where producers avoid the required fees. This is a particular issue with online and distance sales, often from outside the EU.

Next, we conducted a wide-ranging review of existing and potential criteria for fee modulation, and developed reasoned explanations as to which should be applied, and how.

Sharing these principles and our draft recommendations with stakeholders at the EU Commission, we developed a final report and recommendations for guidance. These recommendations were published in 2020, and have since been widely cited.

Since the recommendations were published, there has been significant interest in enhancing EPR schemes from industry and policymakers across Europe – which we were well placed to advise on.

In 2022, we were tasked by Changing Markets Foundation and the European Environmental Bureau to conduct a study on the role of EPR in driving a circular economy for textiles. We used the extensive knowledge we had already gained to make targeted recommendations for the application of EPR (and other policy instruments) to the textiles sector.

This work then led to a report for Policy Hub, in 2023 – in light of the requirement in the Waste Framework Directive for all EU member states to collect textile waste by 2025. In this, we addressed specific questions on how an EPR scheme for textiles could be designed and implemented most effectively, to drive system change towards a circular economy. Again, this report drew on our previous thinking, diving even deeper into textiles, and accounting for the nuances of the industry across the EU.

Most recently, UK policymakers at the Department for the Environment, Food, and Rural Affairs (DEFRA) called upon Eunomia’s expertise to consider the design of a possible EPR scheme for textiles – and to model the costs and benefits in the UK market.

We’ll continue to support governments and producers across sectors to ensure this powerful policy instrument is well-designed, well-targeted, effective, and cost-effective. Ultimately our role is to help organisations deliver more circular products, so we can all achieve a truly circular economy as quickly as possible – without taxpayers paying a hefty price.