Thought Leadership

Understanding Extended Producer Responsibility: The Basics

Extended producer responsibility (EPR), commonly referred to as environmental stewardship or green accounting, is a policy strategy where producers must take responsibility for the end-of-life management of their products (recycling and disposal fees) once they have served their usefulness to consumers. EPR is often delivered through government legislation, though it can also be implemented on a voluntary basis.

So who exactly does this apply to?

Under EPR, the term ‘producer’ refers to the brand owner, first importer, or retailers of products that are resident in the province, state, or country they are being sold in. The packaging they come in, or the product itself, may be subject EPR fees (sometimes called eco-fees). Common types of companies that are considered producers include consumer product manufacturers, distributors of consumer goods, and retailers. Products (or goods) can be targeted items (e.g., solvents, electronics, batteries, tires, and paints) or the packaging that ends up in the residential waste collection system.

Producers And The Cost Of EPR

Embracing EPR, whether it is through mandatory compliance to legislation or the voluntary implementation of an appropriate program, comes with cost. EPR requires producers pay regulatory fees to account for the cost of recycling and otherwise handling the post-consumer materials. In many jurisdictions, producers generating a minimum revenue of $2 million annually are responsible for paying fees to the regulatory EPR program in their area. Of course, EPR programs are constantly evolving and new programs are appearing all the time. Thus, simply because a producer may not be obligated to report now, they could very well be required to do so in the future. 

In many cases, producers add the environmental costs of a product throughout its life cycle to its market price to help offset these fees. This often happens in the form of recycling fees or environmental handling fees, or eco-fees, such as those found on receipts for electronics or batteries. 

Although there is a cost to EPR, it offers several benefits, particularly as part of the circular economy.

The Circular Economy and Benefits Of EPR

At its core, the circular economy is a system that looks to reduce and even eliminate pollution and waste throughout the lifecycle of products and materials. This is often done by keeping products in use as long as possible by using sustainable materials that can be recycled at their end-of life and either reused in other industrial processes or, where possible, returned safely back to the environment – which is what creates a natural regenerating system. 

There are other stages to this type of economy as well, such as businesses working to reduce their greenhouse gas production and use of other fossil fuels during the product production phase, offering take-back and repair programs during distribution, and recovering materials throughout a product’s lifecycle. 

So how does this relate to EPR?

EPR provides significant benefits that fit extremely well within the circular economy. Two intertwined benefits are the support that EPR provides regarding waste reduction and an increased focus onto reuse and recycling activities. For instance, producers have changed their product packaging to not only reduce their environmental impact, but also increase their cost-efficiency as it relates to EPR. 

Such changes can include choosing more sustainable materials, including compressed cardboard with a special plastic laminate rather than complete plastic for packaging. Not only is this a change to lighter material, which as a result reduces the cost the producer must pay to the EPR program authority, but it is also easier to recycle and reuse when it reaches end-of-life. 

How RWDI Is Helping Clients Contain Costs

RWDI offers significant cost savings to producers subject to EPR regulations. This comes through an analysis to develop site-specific databases during the process of ensuring EPR compliance. During the development of this database, we measure the specific packaging materials and identify products that may be targeted for a specific producer, ensuring their database is unique to them and not made of general estimates, which can often result in higher fees and more reporting being done than what is necessary. These databases inform the preparation of the necessary reports and manages fees to the agency delivering the EPR program.

A long-term benefit of RWDI’s expert analyses include an annual review of the materials and therefore, the cost of EPR compliance, allowing us to identify where the costs are coming from, but also the options for reducing them. Even further down the road, RWDI can assess the impact of potential changes to packaging, even before any changes are made.

Understanding extended producer responsibility is becoming increasingly more important, as legislated EPR programs are being implemented in more jurisdictions every day, including the Blue Box Regulation in Ontario. For more information on extended producer responsibility and how RWDI can help with compliance, check out our Environmental Stewardship service.